EU Slaps Anti-Subsidy Biodiesel Tax on US Producers
On March 13, the European Union will impose a counter-subsidy tax on U.S. biodiesel producers for “dumping” biodiesel on the European market.
European producers have been complaining about cheap imported biodiesel for quite a while, and it looks like a key European trade panel finally took action. The tax will be specific to each biodiesel producer:
- ArcherDaniels Midland: 86 cents per gallon;
- Cargill: 90 cents;
- Imperium Renewables: 96 cents;
- Green Earth Energy Fuels: 93 cents;
- World Energy Alternatives: 96 cents;
- Peter Cremer North America and remaining biodiesel producers will pay $1.36 per gallon.
Generally speaking, both “dumping” and anti-subsidy duties are frowned upon (though not explicitly prohibited by WTO rules).
- “Dumping” is the act of charging a lower price for a product in a foreign market than is charged for the same product in a domestic market, otherwise known as selling at less than “fair value.”
- Anti-subsidy duties, also known as “countervailing duties,” are imposed on imports from countries that award unfair financial subsidies to their domestic manufacturers within a particular industry.
Europe imports more biodiesel from the U.S. than any other country, and the total grew from about 7,000 metric tons 2005 to over 1.5 million metric tons last year. EU biodiesel producers began complaining publicly about getting “hammered” from “splash & dash” biodiesel in April of last year.
Washington still has time to challenge the new anti-subsidy tax, but any sort of litigation related to the issue will take years to complete.
[Via Biofuels Digest & Reuters]Photo Credit: Quin.anya via Flickr under CC License.
I’m curious how they determined the tax. Why ADM is only taxed 86 cents per gallon while “remaining biodiesel producers” are taxed $1.36?
Maybe this is GOOD news. It’s not like there’s not enough of a market in the U.S. right now. I’d feel better if the U.S. producers concentrated on developing their domestic market first, instead of trying to get a big jump on the European market.
There is a way to eliminate these anti subsidy taxes. but it requires honesty in taxation, and providing incentives without picking a winner by providing payments to produce a set product. Set a NO TAXES FOR TEN YEARS ON NEW PRODUCTS and after that tax only profits above a predetermined level. This would eliminate the cost of wage earner subsidy payments entirely and still provide a good incentive for development of new products. It doesn’t matter, because our new socialist regime will never go for it.
First of all, the unofficial numbers are closer to $1.20 for ADM and the low end of the scale. and then that much higher for “others.” Biofuels Digest got it wrong.
Second, to answer Naturally interesting’s question, the countervailing duty portion of each is approximately the same. The anti-dumping portion is what is variable. The EU determined this by looking each company’s specific sales pricing and how that compared to “fair value.” It penalized all companies with a specific price formula that takes this into account.
Third, Clayton Cornell, it needs to be made clear that these are only preliminary and by no means yet being enforced or agreed to by the appropriate EU people.
Fourth, just so there is no confusion, the European importer of record for these fuels is who has to pay the additional customs duties. The US producer does not pay.
Fifth, Carbon Buildup, there is a serious market demand problem in the US. And if you could get a better price selling in Europe, wouldn’t you? I’m all for selling to the US first if possible, but not at the expense of losing money on sales.
Sixth, ChuckL, you’re not supposed to drink that biodiesel, you know?
Dear biod,
From your lack of connection in your response to me it appears that you did drink that biodiesel, or maybe just a quart of the gasoline adidtive, corn ethanol.