Argentina, Indonesia accused of dumping biodiesel in EU

Reuters News
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Posted: Aug 30, 2012 10:49 AM
Argentina, Indonesia accused of dumping biodiesel in EU

By Barbara Lewis

BRUSSELS (Reuters) - European producers have lodged a formal complaint that millions of tonnes of Argentine and Indonesian biodiesel are being dumped on the EU market with severe implications for a European industry facing bankruptcies and reduced output.

The head of the European Biodiesel Board (EBB), which represents 75 producers and nearly 80 percent of European biofuels output, on Thursday said the body was also "actively working" on getting EU emergency procedures imposed.

That would mean any anti-dumping duties agreed on Argentine and Indonesian imports would apply retroactively.

"Prices of soybeans, the raw material, are more expensive in Europe than biodiesel imported from Indonesia and Argentina," Raffaello Garofalo, EEB secretary general, said. "It's like saying steel costs more than a car. It's impossible to compete."

The European Commission announced in its Official Journal the complaint that Argentinian and Indonesian biodiesel was being sold very cheaply and "thereby causing material injury to the Union industry".

According to EU law, the Commission may order customs authorities to impose such steps following a valid request from an industry body and consultation with EU member states.

SURGE IN IMPORTS

In a statement, the EBB said the EU had experienced a surge in Argentine and Indonesian imports, leading to several bankruptcies, forcing European producers to sell below cost and to cut annual production.

From very low levels in 2008, imports from the two countries progressively rose to a total of around 2.5 million tonnes in 2011, or more than 90 percent of imports into the EU, according to estimates from Eurostat and the EBB.

The EBB, citing market sources, said Argentine and Indonesian imports have been sold for between $60 and $110 dollars less the EU biodiesel, while soybean oil had sold for around $100 a tonne more than imported soybean based biodiesel.

The latest complaint follows a series of actions to defend the EU's renewables industry, which have set the bloc at odds with major trading partners.

In 2008, the Commission initiated an anti-dumping and anti-subsidy investigation against unfair U.S. imports of biodiesel, which led to the imposition of substantial anti-dumping duties - as well as making way for Argentine and Indonesian imports.

The EBB said on Thursday it was also looking into an anti-subsidy case.

"It would not be surprising if, similarly to the case against U.S. biodiesel, an anti-subsidy investigation is also initiated two months later," Vasiliki Avgoustidi, associate director at Berwin Leighton Paisner in Brussels, said.

SERIES OF ACTIONS

A week ago, the Commission said the EU would begin registering imports of U.S. bioethanol, raising the possibility of EU tariffs on shipments worth more than 700 million euros ($876.19 million) a year.

Argentina has also filed a complaint against the European Union at the World Trade Organization to challenge Spanish rules that the South American country argues discriminate against its biodiesel exports.

Argentina increased taxes earlier this month, but the biodiesel industry said the complaint was still valid because tax can be unpredictable.

Bernard Nicol, CEO of Diester Industrie, the European Union's largest biodiesel maker, said the tax increase was of some help and at EU level, could help to delay any decisions on plant closures.

"It will also bring some oxygen, mainly to producers in southern Europe, Italy and Spain, which could not stand this unfair competition anymore," Nicol said.

(Additional reporting by Sybille de La Hamaide in Paris; Editing by William Hardy and David Cowell)