By Jonathan Stearns
Aug. 29 (Bloomberg) -- The European Union threatened to impose tariffs on biodiesel from Argentina and Indonesia, a step that would expand renewable-energy trade barriers following EU import levies against the U.S.
The bloc opened a probe into whether Argentinian and Indonesian exporters of biodiesel, a type of biofuel made from vegetable oils and animal fats for use in diesel engines, sell it in the 27-nation EU below cost, a practice known as dumping.
The investigation will determine whether biodiesel from the two countries “is being dumped and whether the dumped imports have caused injury to the union industry,” the European Commission, the EU’s trade authority in Brussels, said today in the Official Journal. The commission has nine months to decide whether to impose provisional anti-dumping duties for half a year and EU governments have 15 months to decide whether to apply “definitive” levies for five years.
The inquiry highlights tensions accompanying EU efforts to increase the use of biofuels, a renewable energy from crops such as rapeseed, corn, wheat and sugar, amid a crackdown on fossil fuels blamed for global warming. Ethanol is another kind of biofuel.
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 goal of more than doubling the total share of renewable energy in the EU to an average 20 percent.
In 2009, the EU hit the U.S. with five-year anti-dumping duties on biodiesel. The bloc also applied separate anti-subsidy levies on American manufacturers such as Archer-Daniels-Midland Co., the world’s largest grain processor, and Cargill Inc., the biggest U.S. agricultural company. The import taxes brought $1 billion a year of trade to a halt.
Last year, the EU raised the threat of anti-dumping and anti-subsidy duties against bioethanol from the U.S. by opening two probes that have yet to be completed. The subsidy inquiry must end by Dec. 25 and the dumping investigation by Feb. 25.
The new dumping inquiry covering Argentina and Indonesia stems from a July 17 complaint by the European Biodiesel Board on behalf of manufacturers that account for more than 25 percent of EU production of biodiesel, according to the commission, which didn’t identify any producers. The European Biodiesel Board represents about 50 companies including Biopetrol Industries AG in Germany and Diester Industrie in France.