The European Union will impose punitive duties on imports of biodiesel from Argentina and Indonesia, charging them with selling the product into the bloc at unfairly low prices, EU sources said. The European Commission has set provisional tariffs at between 7 and 11 percent for imports from Argentina and between zero and 10 percent for those from Indonesia, said sources familiar with the trade defence case.
Argentina is the world's No 1 biodiesel exporter and the two countries represent 90 percent of EU biodiesel imports. The duties will be set by May 29 and the investigation will continue, with member states set to vote on definitive duties - typically imposed for five years - before the end of November.
The EU is also conducting a parallel investigation into alleged unfair subsidies for Argentine and Indonesian producers. This is due to conclude by the start of December. EU regulators have said taxes placed on Argentine exports of crops such as soybean oil used to make biodiesel, but not on the finished product, make it uneconomical for refiners in the EU to produce biofuel from Argentine raw materials. A similar export tax exists in Indonesia, which the Commission says also undercuts European refiners.
Argentina and Indonesia have fought back, saying their measures comply with World Trade Organisation (WTO) rules. Indonesia has said it might complain to the WTO if the EU imposed penalties. Argentina launched a challenge at the WTO this week against EU rules for importing and marketing biodiesel.
From very low levels in 2008, EU biodiesel imports from the two countries rose progressively to around 2.5 million tonnes in 2011, according to estimates from Eurostat and producer group the European Biodiesel Board (EBB), which brought the complaint. Trade tensions with the European Union and also the United States led Argentina at the end of 2012 to ask the WTO to investigate its claims that both powers had broken global trade rules by curbing imports of its lemons, beef and biodiesel.
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