NEW YORK: After a year-long investigation, the EU has extended duties on U.S. biodiesel, a decision that the U.S. biodiesel trade association says is unfair and protectionist.
EU Regulations 2015/1518 and 2015/1519 were published in the EU Official Journal. The regulations extend both the antidumping and antisubsidy duties on U.S. biodiesel for an additional five years.
The duties originally went into effect in July 2009 after complaints that subsidized B99 from the U.S. was flooding the European market, causing injury to EU producers. Afterwards, complaints that U.S. producers were circumventing the duties by shipping biodiesel to the EU by way of Canada led to another investigation and imposition of anticircumvention measures in 2011.
The antidumping and antisubsidy duties were slated to expire last year, but in April 2014 the European Biodiesel Board lodged an expiry review request with the European Commission to extend them for another five years.
“The European Commission has decided to continue a policy that is clearly aimed at giving European biodiesel producers an edge over their competition and a lock on the European market,” said Anne Steckel, vice president of federal affairs for the National Biodiesel Board, the U.S. biodiesel trade association. “It is disappointing, and we will continue evaluating our options for fighting these protectionist duties.”
EBB Secretary General Raffaello Garofalo said the U.S. industry has benefitted from favorable taxation policy at both the federal and state levels for many years. “Ever since the $1-per-gallon biodiesel tax credit was first implemented in U.S. legislation a decade ago, it never ceased to play a key role in the scaling up of U.S. biodiesel production and securing it a significant advantage,” Garofalo said. “Even though the tax credit kept expiring several times, the U.S. authorities have established a tradition of reinstating the tax credit in a retroactive manner as part of the so-called tax extenders package policy.”
The NBB says the EU is ignoring the fact that the biodiesel tax incentive is currently expired and that European biodiesel was eligible to receive the tax credit provided it was blended in the U.S.
“This decision highlights why the U.S. biodiesel tax incentive should be reformed and converted into a domestic production credit so that we have a level playing field,” Steckel said. “When the U.S. biodiesel tax incentive is in effect under the current structure, European biodiesel can be shipped to the United States only to be rewarded with a $1-per-gallon incentive, while at the same time U.S. biodiesel shipped to the EU is slapped with punitive duties. This is obviously unfair to American companies and workers.”
In challenging the duties throughout the expiry review, NBB emphasized that European biodiesel producers are able to sell biodiesel in both Europe and the U.S. without duties or limitation and can freely participate in U.S. policies such as the renewable fuel standard (RFS) and, before it had expired, the U.S. biodiesel tax incentive. The NBB notes that U.S. imports of biodiesel from the EU have grown in recent years while EU imports of U.S. biodiesel have been virtually eliminated since the EU duties were imposed.
The EU decision to extend duties on U.S. biodiesel comes as U.S. imports of biodiesel surge, and NBB continues to challenge EPA on its decision to reconsider the alternative feedstock tracking plan for Argentine producers that facilitates participation in the RFS program.
Figures recently released from the U.S. Energy Information Administration show that imports in June more than doubled volumes for May.
In May, the U.S. imported almost 12.9 million gallons of biodiesel, while in June that number jumped to more than 28 million gallons. June’s imports were nearly evenly distributed, with Argentina, Canada and Indonesia each delivering around 9 million gallons and about 1.5 million gallons coming from South Korea.
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