The European Union is to investigate whether the production of US biodiesel is being subsidised and the fuel itself dumped into Europe.
The action follows complaints lodged with the Commission at the end of last month by the European Biodiesel Board, which represents the interests of a major group of EU biodiesel producers.
The European Biodiesel Board has apparently provided the EU with evidence that US biodiesel producers have been subsidised by federal excise and income tax credits, as well as a federal programme of grants to help them increase production. The Board also has proof that US producers are dumping biodiesel into the EU.
The effect of the subsidisation and dumping is, according to the Board, leading to a deterioration in the price of the fuel as well as lowering the market share of EU biodiesel producers.
If measures are considered justified they would take the form of specific duties on the product in question; these would be ‘countervailing duties’ in the case of subsidies, and ‘anti-dumping duties’ in the case of dumping.
Imports of biodiesel into the EU come mainly from the US. Imports of biodiesel from the US have increased from about 7000 tonnes in 2005 to about 1 million tonnes in 2007.
The results of the EU investigation won’t be known until March next year.