Tax Argentina’s biodiesel now, EU grouping urges

10 October 2018 8:25am
EU flag in the wind

9 October 2018. By Joanna Sopinska

Biodiesel from Argentinian exporters such as the local arm of Louis Dreyfus must face ‘swift’ EU measures to counter price-distorting subsidies, a powerful grouping of EU governments has said.

In a letter to EU trade chief Cecilia Malmström seen by MLex, the France-led alliance warned of "substantial risk" to European producers if the EU didn't put antisubsidy duties in place.

“It is essential that the European Commission swiftly imposes provisional countervailing measures on imports of biodiesel originating from Argentina, that it will be able to confirm or modify after the conclusion of the investigation,” the group said. The signatories include Bulgaria, France, Poland, Portugal, Romania and Spain.

The group warned of “serious difficulties” the EU biodiesel producers face due to a “significant increase of imports” from Argentina and Indonesia following the removal of EU dumping duties earlier this year.

The letter argues the commission should take into account the outcome of its own investigation that “clearly concluded to the existence of an important subsidization and a substantial risk of serious injury for the union industry.”

As well as Louis Dreyfus Company Argentina, biodiesel exporters there include Molinos Agro and Aceitera General Deheza.

― Proposal ―

But any measures would mark a U-turn by the EU executive.

The commission informed interested parties last month that it wasn't going to impose provisional antisubsidy duties on biodiesel imports from Argentina, although the preliminary investigation had shown that they had been unfairly subsidized and there was a threat of injury to the bloc’s industry.

“The commission’s preliminary conclusions are that the Argentine imports of the product concerned into the union are subsidized and that there appears to be a threat of material injury to the Union industry,” said a 59-page document sent out to interested parties on Sept. 21 and obtained by MLex.

The commission added it needed more time “to collect further information on developments after the investigation period,” to clarify whether potential measures would serve the EU interest.

A group of around 14 countries spoke against the commission proposal at a meeting last week of national EU trade officials with representatives from the commission's trade department, MLex understands. Six of them agreed to step up pressure and send a letter directly to Malmström.

― Pressure from industry ―

European biodiesel producers have been also pushing the commission to reverse its decision. They argue that the EU investigators' own evidence of unfair subsidies is enough to justify provisional measures.

The European Oilseed Alliance and the German Union for the Promotion of Oil and Protein Plants, or Ufop, have sent a joint letter to commission president Jean-Claude Juncker requesting an imposition of provisional duties.

“It is absolutely imperative [to ask the trade department] to urgently impose legitimate countervailing duties on this file. The credibility of ‘a Europe that protects’ is at stake,” the two bodies said in a letter obtained by MLex.

The EU opened an antisubsidy probe in January into biodiesel from Argentina following a complaint from the European Biodiesel Board, or EBB, that argued in favor of duties to shield EU producers from unfairly priced imports.

In May, the commission ordered national customs authorities to register imports from Argentina to enable them to collect tariffs from the date the registration started, rather than from the date of the imposition of provisional measures.

Should the commission stick to its position and skip provisional measures, the registered imports won't be subject to retroactive collection of tariffs, MLex understands.