EU Probes Imports of U.S. Biofuels

BRUSSELS - Jun 16/08 - SNS -- The European Union has opened anti-subsidy and anti-dumping investigations into imports of biodiesel from the United States, saying sufficient evidence was provided of subsidies to the US biodiesel sector, as well as dumping of biodiesel in the European market.

Imports of biodiesel into the EU market come mainly from the United States, with other imports accounting for a minor share of the market. Imports of biodiesel from the US have increased from about 7,000 metric tons (MT) in 2005 to about 1 million MT in 2007.

The complainant has argued imports of subsidized biofuel has had an adverse effect on the European biodiesel industry. A detailed investigation by the Commission will now determine whether measures are justified under EU trade rules.

EU Spokesperson for Trade Peter Power said: "We have always said that the EU will not tolerate unfair trade practices, and will pursue vigorously any well founded complaint. The Commission will leave no stone unturned in these investigations and will act in accordance with the findings."

Anti-subsidy and anti-dumping complaints concerning imports of biodiesel from the USA were lodged with the Commission on 29 April 2008. The complaints were lodged by the European Biodiesel Board, which represents the interests of a major proportion of EU producers of biodiesel. Having examined the complaints, the Commission is satisfied that they fulfill the requirements of the EU's basic anti-subsidy and anti-dumping regulations in order to initiate further proceedings.

With regard to the anti-subsidy complaint, the complainant has provided sufficient evidence of subsidies to the biodiesel sector in the USA. These subsidies would include federal excise and income tax credits as well as a federal programme of grants to finance increased production capacity. Various subsidy programmes would also exist at state level. In regard to the anti-dumping complaint, the complainant has provided sufficient evidence of dumping of biodiesel on the EU market.

The effect of the subsidisation and dumping is, according to the complainant, a deterioration in the prices charged and market share held by the Community industry, which has led to substantial adverse effects on the overall performance and the financial situation of the industry.

The Commission will now investigate the allegations in the complaints. The Commission will make its provisional findings by 13 March 2009 at the latest which it will then present to EU member states. If measures are considered justified these would be in the form of specific duties on the product in question, called 'countervailing duties' in the case of subsidies, and 'anti-dumping duties' in the case of dumping of the product in question.