UPDATE:EU To Put Temporary Duties On US Biodiesel Imports - Document
February 19 2009 - 2:24PM
Dow Jones News
The European Commission intends to place temporary duties on
biodiesel imported from the U.S. while it determines if permanent
duties are necessary, according to a commission proposal obtained
by Dow Jones Newswires.
The decision comes in response to complaints from the European
Biodiesel Board, which represents the main producers in the E.U.,
that a subsidy the U.S. government gives to its biodiesel companies
is unfairly harming the E.U. biodiesel market.
The EBB said the subsidy, which amounts to $1 per gallon of
biodiesel, had encouraged U.S. companies to flood the E.U. market
with their biodiesel, driving down prices and forcing E.U.
producers to shut down production. The E.U. is by far the world's
largest consumer of biodiesel.
U.S. biodiesel imports caused the financial condition of the
E.U. biodiesel industry to deteriorate drastically between 2005 and
early 2008, the commission found, with profit margins dropping from
18% to below 6%. Return on investments in the E.U. industry dropped
by 80%, as the industry's margins were squeezed between higher
costs and low biodiesel prices, the commission said.
"The pressure exercised by the surge of low-priced
dumped/subsidized imports on the (E.U.) market did not allow the
(E.U.) industry to set its sales prices in line with market
conditions and the increase in costs," according to the
document.
The commission, the E.U.'s executive arm, will impose two kinds
of duties, according to the proposal. The first is for biodiesel
that is dumped into the market at prices below the cost of
production, and the second kind would counter the subsidies given
by the U.S. government, the commission said.
Archer Daniels Midland Co. (ADM), the giant U.S. agriculture
company, will have to pay a combined duty of EUR26 per 100
kilograms of biodiesel, according to the document. ADM rival
Cargill will pay EUR27 per 100 kilograms.
Under the proposal, Imperium Renewables will have to pay EUR29
per 100 kilograms, Green Earth Fuels EUR28 per 100 kilograms, and
World Energy Alternatives EUR29 per 100 kilograms.
Peter Cremer North America and most other U.S. biodiesel
companies will pay EUR41 per 100 kilograms.
If the commission wants to impose permanent duties, it must win
the approval of the E.U. national governments.
The temporary duties will take effect by March 12, after the
national government experts meet March 3 to discuss the issue,
according to the commission document.
-By Matthew Dalton, Dow Jones Newswires; +32-2-741-1487;
matthew.dalton@dowjones.com