UPDATE: EU Imposes Duties On Biodiesel Imported From US
March 12 2009 - 8:22AM
Dow Jones News
The European Union Thursday said it will place steep duties on
biodiesel imported from the U.S. to offset a subsidy the U.S.
government gives to its biodiesel producers.
Starting Friday, the 27-member bloc will impose two kinds of
duties, one to counter the government subsidy and one for dumping
the product at unfairly low prices onto the E.U. market, according
to the announcement in the Official Journal of the E.U.
The subsidies will last four months while the European
Commission, the E.U.'s executive arm, determines if multiyear
duties are necessary, the Commission said Thursday.
"Anti-dumping and anti-subsidy measures aren't about
protectionism, they are about fighting unfair trade," said E.U.
trade spokesman Lutz Guellner in a statement. "This decision was
taken on the basis of clear evidence that unfair subsidization and
dumping of U.S. biodiesel has taken place."
The U.S. Congress and the Bush administration in 2004 passed the
controversial subsidy, which is a tax credit of $1 for each gallon
of biodiesel produced. Since then, biodiesel shipments from the
U.S. to the E.U. soared from 2,634 metric tons in 2004 to 1.14
million metric tons in the year between April 2007 to March
2008.
The anti-dumping duties range from EUR23.6 to EUR208 per metric
ton, and the anti-subsidy duties range from EUR211 to EUR237 a ton,
depending on the company that produces the biodiesel. Companies
importing biodiesel from the U.S. will have to pay both of these
duties.
Archer Daniels Midland Co. (ADM), the giant U.S. agriculture
company, will have to pay combined duties of EUR261 per metric ton.
ADM rival Cargill will have to pay EUR275 per ton.
Imperium Renewables will have to pay EUR293 per ton, Green Earth
Fuels EUR284 per ton, and World Energy Alternatives EUR294 per ton,
according to the proposal.
Fifty-three companies that cooperated with the E.U.'s
investigation will have to pay EUR342 per ton, including Louis
Dreyfus Agricultural Industries, Vitol Inc., and U.S. Biofuels
Inc.
Peter Cremer North America LP and all other companies will have
to pay EUR419 per ton.
The surge of U.S. biodiesel imports into the E.U. caused the
financial condition of the E.U. biodiesel industry to deteriorate
drastically between 2005 and early 2008, according to the
Commission's investigation. Profit margins dropped from 18% to
below 6%.
Return on investments in the E.U. industry fell by 80%, as the
industry's margins were squeezed between higher costs and low
biodiesel prices, the commission said.
The duties were set based on the premise that E.U. biodiesel
producers deserve profit margins of at least 15%, according to the
announcement in the Journal. The commission will decide in mid-July
whether to impose long-term duties.
-By Matthew Dalton, Dow Jones Newswires; +32 2 741 1487;
matthew.dalton@dowjones.com
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