Biodiesel Dumping Accusations Could Spark US-EU Trade Row
by Matthew McDermott, Brooklyn, NY on 06.13.08
photo by Jason Trommetter
Not too much concrete on this one yet, so file it in the something to watch category: European biodiesel producers are urging the European commission to levy punitive duties on imports of US biodiesel. The claim is that US subsidies are distorting the ability of European producers to compete. The US exported to the EU 7,000 tonnes of biodiesel in 2005, a figure which has risen to 1 million tonnes in 2007.
“We have a lower and lower use of capacity simply because we cannot compete with people who are flooding our market because of unfair subsidies,” European Biodiesel Board secretary general Raffaello Garofalo was quoted in The Guardian as saying.
Garafalo went on to say that refineries in Germany, the Netherlands and the UK were under threat from the alleged dumping. D1 Oils , the UK-based biodiesel firm which is banking on Jatropha, closed its two UK refineries in April and laid off all staff there. In their 2007 interim report D1 stated that the $1/gallon US biodiesel subsidy, which when combined with existing EU subsidies was creating a “double dip” situation which makes it “difficult for the EU to develop a robust biodiesel refinery industry.”
An official EC investigation has begun to determine whether to levy duties against these imports, the results of which must be completed by March 13 of next year. The US has threatened to take the issue to the World Trade Organization and file a counter-complaint.
via :: The Guardian
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Why the hell are we making biodiesel in the US and shipping it to Europe? We don't need it here? Thanks, crappy US dollar.
This is due to a problem with the biodiesel blender's credit that was not anticipated when the law establishing the credit was hastily passed.
The blender's credit allows for biodiesel blended in the US to recieve a $1/gal subsidy. The unintended consequence is that on their way to europe, tankers of (usually asian) biofuel will be mixed with 0.1% US refined fuel. They then collect a blender's credit for the entire tanker of fuel.
The problem is that there is nothing in the law that says that the biofuel must then be sold in the US. They haul the fuel to europe, where they collect the european biofuel subsidies as well.
More here:
http://marketplace.publicradio.org/display/web/2008/05/21/splash_dash/
There is a law pending that would fix this, but it's still a problem for now. The thing most people don't recognize is that this is also a US problem.