EU investigates 'splash and dash' allegations

The European Commission is to carry out a joint anti-subsidy and anti-dumping investigation on imports of subsidised 'B99' biodiesel originating from the USA. The blends consist of normal mineral diesel mixed with a small amount of biofuel.

The announcement was welcomed by the European Biodiesel Board (EBB), representing the major biofuel producers in the EU. The EBB lodged two formal complaints on April 29th, alleging that the imports were unjustly injuring EU producers.

According to the EBB, B99 blends have been sold in the European market as "pure biodiesel" for over a year and at a substantial discount (over ̈́4;120-180/tonne), in some cases at a lower price than the raw materials purchased by the EU industry for producing biodiesel. This has created a price-setting competition, progressively disrupting the margins of European biodiesel producers.

Against this background, says the EBB, it will be essential that countervailing measures targeting B99 imports are imposed by the EU authorities in a reasonable timeframe. "In the absence of such measures, the situation of the EU biodiesel industry would become even more critical than it is at present."

Under US Federal measures adopted in 2004, biodiesel can be subsidised up to $264 per m3 (300 USD/tonne, approximately ̈́4;200/tonne) only by adding a 'drop' of mineral diesel to biodiesel. US producers can therefore claim the maximum subsidy for a "B99.9" blend. Such a blend can then be exported to Europe where it is eligible for European subsidy schemes. Since the benefit of the blender credit is not restricted to biodiesel produced and consumed on the US territory, the 2004 support provisions resulted in a surge of B99 exports to the EU.

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