Argentina clinches deal to resume biodiesel exports to EU

Rapeseed is one of the EU's major homegrown biodiesel crops. [Susanne Nilsson/Flickr]

Argentina and the EU reached an agreement to end a dispute over exports of biodiesel from the South American country to the bloc, the Argentine ministry of foreign affairs said on Wednesday (30 January).

The deal establishes price and volume limits to be announced next month, the ministry said in a statement. The deal marks the end of a long trade dispute and could help bolster Argentina’s critical soybean sector. Argentina is the world’s top producer of soyoil, the main ingredient used to make biodiesel.

Earlier on Wednesday, a European Commission source told Reuters that EU countries backed a proposal to impose anti-subsidy duties on Argentine biodiesel imports, with an exemption for producers that agree to a minimum price.

Argentina celebrated the deal as a victory for the country’s biofuels sector. A statement from the foreign ministry said it expected Europe to ratify and settle on the details of the agreement over the days ahead.

US soy for producing biofuels, an 'unsustainable' giveaway to Trump

The Commission is set to offer Washington a way out from current trade tensions with China authorising imports of soybeans from the US to produce biofuels. However, the new imports to help ease trade relations are not helping the environment.

“To find a solution to the commercial dispute, with the support of the national government, the Argentine Chamber of Biofuels (CARBIO) offered a price and volume commitment to allow the restart of exports,” the statement said.

“We have worked for several months to reach a mutually beneficial agreement,” CARBIO chief Luis Zubizarreta said in a separate statement welcoming the agreement.

The European Commission, which oversees trade policy in the 28-member EU, said earlier this month it had told interested parties that it was willing to accept price undertaking from Argentine producers, allowing them to escape extra duties.

The EU’s 28 member states voted in favor of the measures at a meeting on Wednesday, the European Commission source said.

With their backing, the Commission is set to impose anti-subsidy duties, normally in place for five years, by 28 February.

The European Biodiesel Board, which represents EU producers, said it welcomed the move and said it showed the bloc recognized Argentine export taxes unfairly distorted the international market.

Time is running out for biofuels sustainability criteria

The European Commission’s Directorate-General (DG) of Energy will only give two days to other DGs to express their opinion about its much-awaited proposal on the sustainability criteria of biofuels, which will determine the future of palm oil in Europe.

It said the deal meant Argentine exporters would be allowed to export up to about 1.2 million tonnes of biodiesel per year without paying duties.

The scheme, with a minimum price option, would mirror that used to allow Chinese solar panel producers to export to the bloc after a major dispute over alleged dumping that threatened to spiral into a trade war.

For Argentine biodiesel, the commission has proposed duties of between 25% and 33.4% depending on the companies, a document seen by Reuters in December showed.

Exporters include the Argentine arms of Bunge Ltd, Cargill Inc and Louis Dreyfus Corp, as well as Molinos Rio de la Plata SA.

Supporters

Ethanol Europe

Subscribe to our newsletters

Subscribe

Want to know what's going on in the EU Capitals daily? Subscribe now to our new 9am newsletter.