Brussels -- The European Union threatened to renew tariffs on biodiesel from the U.S. for another five years in a sign of persistent trade tensions over renewable energy.
The EU said it would examine in two probes whether to re-impose the duties introduced in 2009 to counter alleged subsidies and price undercutting by U.S. exporters of biodiesel, a type of biofuel made from vegetable oils and animal fats for use in diesel engines.
The duties to counter subsidies are as much as 237 euros ($323) a metric ton and the levies to fight below-cost, or “dumped,” imports are up to 198 euros a ton, depending on the company. The exporters targeted include Archer-Daniels-Midland Co., the world’s biggest corn processor, and Cargill Inc., the largest closely held U.S. company.
The inquiries will determine whether the expiry of the import taxes would be likely to lead to a “continuation or recurrence” of subsidization and dumping and of “injury” to EU producers, the European Commission, the 28-nation bloc’s trade authority in Brussels, said today in the Official Journal. The anti-subsidy and anti-dumping duties were due to lapse tomorrow and will now stay in place during the investigations, which can last as long as 15 months.
The subsidy and dumping cases highlight tensions accompanying EU and U.S. efforts to expand global trade in biofuels. Biofuels, which also include ethanol, are a renewable energy from crops such as rapeseed, corn, wheat and sugar. In a separate trans-Atlantic commercial dispute, the EU in 2013 imposed a five-year anti-dumping duty on U.S. bioethanol.
To fight climate change, the EU decided in 2008 to require at least 10 percent of land-transport energy in each member country to come from renewable sources led by biofuels beginning in 2020. This is part of a broader goal of more than doubling the overall share of renewable energy in the EU to an average 20 percent.
U.S. exports to the EU of the type of biodiesel covered by the European anti-subsidy and anti-dumping duties were valued at $1 billion a year and came to a virtual halt after the bloc imposed the levies in July 2009. In May 2011, the EU widened the duties to cover more blends and extended the levies to Canada, saying American exporters dodged the trade protection.
The investigations into whether to renew the duties stem from April 9 requests by the European Biodiesel Board on behalf of companies that account for more than a quarter of EU production of biodiesel, said the commission. The EBB represents producers including Germany’s Verbio AG and Finland’s Neste Oil Oyj.
Copyright 2014 Bloomberg.
Lead image: Rapeseed field via Shutterstock