European biodiesel manufacturers have threatened to file complaints to the Commission and the World Trade Organisation (WTO) concerning US biodiesel subsidies, which they say are threatening both European industry and the Union’s ambitious target of achieving a 10% share for biofuels in transport fuel by 2020.
“Massive exports of unfairly subsidised US biodiesel are becoming an increasing source of concern for the EU biodiesel industry,” said the European Biodiesel Board (EBB) in a statement on 16 October.
Imports of biodiesel from the US have exploded since January 2007, and have already reached over 700,000 tonnes, compared to just 90,000 tonnes for the whole of 2006. According to the EBB, this sharp increase “is only explainable by unfair support measures”.
The organisation explains that under US legislation, the so-called “B99” blend, which contains 99.9% biodiesel and 0.1% or less of mineral diesel, can already be subsidised by around €200 per tonne. Then, if exported to Europe, producers who blend the fuel again are also eligible for European subsidy schemes.
This intense price competition is eroding benefit margins for European producers, putting some out of business, says the EBB. They warn that if the situation persists, European biodiesel output will stagnate or even decline this year, delaying EU efforts to increase the share of biofuels in the transport sector.
“Unless the situation is solved very shortly by the US legislature, the EU biodiesel industry will initiate comprehensive legal action against this unfair trade practice, in the form of a joint anti-dumping and anti-subsidy complaint, possibly supported by a WTO complaint,” the EBB stated.
EBB Project Manager Amandine Lacourt told EURACTIV that a decision will likely be taken at a meeting of the organisation’s general assembly at the end of November.
She added that the Commission’s trade department had so far been “very, very receptive” to the complaints of Europe’s biodiesel producers, although she added that it was impossible to prejudge the final outcome of an eventual investigation.
If investigations did conclude that subsidised biodiesel was being dumped on EU markets at below cost price, the EU would be entitled to impose trade sanctions to balance the injury caused to European biofuel firms.
Business & Industry
- European Biodiesel Board (EBB):EBB strongly condemns the unfair subsidised US biodiesel exports and stands ready for legal action(16 October 2007)
- European Biodiesel Board (EBB):Letter to Peter Mandelson: International trade of biodiesel - unfair competition from 'B99' subsidised exports(19 March 2007)
- Reuters:Europe biofuel group threatens action on U.S. subsidy
- International Herald Tribune:European biodiesel producers threaten trade complaints against U.S. subsidies