European biodiesel manufacturers have filed an official complaint to the Commission regarding “unfair” US biodiesel subsidies, substantiating expectations that biofuels could be at the heart of the next large-scale trade spat at the WTO.
According to the European Biodiesel Board (EBB), a US Federal measure allowing for minimal biodiesel blends to be subsidised before being exported has led to a “dramatic surge” in US biodiesel exports to the EU and is “creating a severe injury” to the European industry.
The organisation explains that, under US law, producers of the so-called “B99” blend qualify for subsidies of approximately €200 per tonne. Yet the blend is made simply by mixing pure biodiesel (often cheaply imported from countries like Indonesia or Malaysia) with as little as 0.1% or less of mineral diesel.
This 99.9% biodiesel blend can then be resold in Europe as pure biodiesel, where it is again eligible for European blending subsidy schemes. According to the EBB, the process allows US biodiesel exporters to undercut EU biodiesel prices – some say by as much as 30%. And the weak dollar is doing nothing to alleviate the pressure.
The group, which represents 56 companies and associations, responsible for 80% of biofuel production in the EU, presented a legal complaint to the Commission on 25 April, calling for it “to initiate an anti-dumping and anti-subsidy investigation, with a view to imposing as soon as possible countervailing measures against US ‘B99’ exports to the EU”.