EU to cut biodiesel tariffs for Argentina, Indonesia, following WTO ruling

EU flag in the wind

14 July 2017. By Poppy Carnell.

EU dumping tariffs on biodiesel from Argentina and Indonesia will be cut by more than half, after European investigators recalculated the duty rate in line with a ruling by the World Trade Organization.

The move follows the WTO's conclusion last year that EU tariffs on the fuel broke trade rules because of the cost adjustments investigators made during the probe.

Tariffs will be cut by up to 10.6 percent for Argentine biodiesel, and by up to 6.9 percent for Indonesian biodiesel. Biodiesel is an alternative form of renewable energy, made from vegetable and animal fats.

Since 2013, the EU has imposed dumping tariffs of up to 20.5 percent on imports of Indonesian biodiesel — that's 178.85 euros ($204.85 today) a ton. For imports from Argentina, the levies range up to 25.7 percent, or 245.67 euros a ton.

Before imposing the levies, European trade officials had increased the assessed level of dumping during their probe to include differential tax rates of raw materials used to produce biodiesel — soybeans and palm oil — in both Indonesia and Argentina.

High export taxes on these materials mean they tend to remain on the domestic market, creating a surplus and resulting in lower domestic prices. But the tax on biodiesel exports is lower and this, EU officials concluded, meant that producers of the fuel were indirectly receiving support from their governments.

Argentina and Indonesia took the matter to the WTO, saying these cost adjustments were illegal, and the trade arbiter agreed.

Adjustments excluded

To come into line with the ruling, the European Commission recalculated the dumping tariffs, excluding the cost adjustments. According to draft plans seen by MLex, this means the duty on Argentine biodiesel will be up to 10.6 percent at EU borders, with companies that cooperated during the commission's probe facing duties of 7.3 percent.

Indonesian biodiesel faces levies of up to 6.9 percent, with cooperating companies facing a level of 6.5 percent, the commission's plans show.

Applying this percentage to the same figures the EU had used in its original investigation, this would make duties up to around 105 euros a ton on Argentine imports and up to about 60 euros a ton for Indonesian imports.

Thirteen producers also challenged the duties at the bloc's General Court in 2014. These companies are:

Wilmar Bioenergi Indonesia, Wilmar Nabati Indonesia, Ciliandra Perkasa, Pelita Agung Agrindustri and Musim Mas from Indonesia. Cargill, LDC Argentina, Bunge Argentina, Aceitera General Deheza, Vicentin, Oleaginosa Moreno Hermanos, Molinos Río de la Plata, Unitec Bio and Cámara Argentina de Biocombustibles, or Carbio, an industry association, from Argentina.

The court annulled these duties and ordered the EU to refund tariffs that importers linked to the 13 companies had paid. The bloc's institutions appealed this decision at the end of 2016, and the case is ongoing.

For the WTO case, the old duty level will be replaced with the lower tariff once the EU adopts its new plan.

The bloc's governments must approve the tariff changes before they can come into force.