Argentina will temporarily scale back taxes on biodiesel for domestic use to help the industry as the South American nation battles the European Union over anti-dumping measures.
The government will send a bill to Congress ordering the exemption of a 22 percent tax on biodiesel used in thermoelectric plants and a 19 percent tax on biodiesel for gasoline blends until the dispute with the EU is resolved, President Cristina Fernandez de Kirchner said yesterday in a speech in Buenos Aires.
The EU slapped Argentina with duties on biodiesel imports last year, saying producers have access to raw material at prices that are kept artificially low. Argentina has requested the formation of a panel at the World Trade Organization in order to resolve the dispute and said the nation is being punished for being competitive in a free market, Fernandez said.
“We’re in the middle of a true trade war,” Fernandez said during the speech. “We have to protect those who need our help.”
Argentina’s biodiesel industry has about 33 processing plants and employs 1,600 people, she said. Fernandez inaugurated a biodiesel plant in Santa Fe province yesterday run by Renova SA. Renova is a joint venture between Glencore Xstrata Plc and local producers Vicentin and Molinos Rio de la Plata SA, according to a 2011 Economy Ministry report on the industry.
Louis Dreyfus Commodities BV, Bunge Ltd and Cargill Inc also operate biodiesel plants in Argentina, according to the report.
Argentina is the world’s largest exporter of soybean oil and derivatives and the third-biggest exporter of soybeans and corn.
“Sometimes it seems these decisions are taken against the president or the government without thinking about the individuals that are affected,” Fernandez said.
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