European industry counterattacks against Argentine biodiesel
European industry counterattacks against Argentine biodiesel
A group representing European biodiesel producers filed a complaint about illegal state
aid with the European Commission on 3 November. EURACTIV France reports.
It’s the latest episode in a commercial war between European biodiesel and its South
American competitor. In September, the EU removed tariff barriers on biofuel from Argentina,
following a WTO complaint. Now the European biodiesel producers’ organisation replies in
kind.
“We lodged a complaint about unfair subsidies with the European Commission on 3 November,”
said Raffaello Garofalo, secretary-general of the European Biodiesel Board, who hopes the investigation
will be opened quickly because of the risks for the European industry.
Contacted by EURACTIV, the European Commission declined to confirm.
However, EURACTIV understands that the opening of an investigation is likely to be announced in
November in the Official Journal of the EU.
In addition to a rising market share, Argentina’s biodiesel weighs heavily on prices: it is by far
the cheapest on the market.
Citing state aid, the United States imposed this summer an import tariff of nearly 64% on the
Argentinian biofuel.
As a result, Argentine biodiesel vessels destined for the American market changed course and sailed
to Europe, after the news that European tariff barriers had been lifted. They had stood at between
22 and 25% of the price from 2013 until now.
A complaint against state aid and not dumping
This tariff was based on another legal basis: it had been set up on the grounds of anti-dumping.
This time, biodiesel producers believe that Argentinian biodiesel enjoys both state aid and a differential
tax treatment, which creates unfair competition.
The world’s largest soybean producer, Argentina has a de facto dominant position on this protein crop,
which the entire planet feeds on.
Argentina imposes an export tax on other soybean products, which falls on final buyers, and benefits
both producers who incorporate the tax in their selling price and the state which collects the tax.
However, Argentine biodiesel, made from cheap duty-free soybean, is not subject to this export tax.
According to European biodiesel producers, this makes it very competitive, whereas it is actually
highly subsidised because of this complex mechanism.
The European Commission has 45 days to indicate whether an investigation has been opened
but it could also do so much more quickly because of the urgency of the situation: Argentina could
literally flood the EU with soy-based biodiesel, which is made from GMOs.
Producers also hope that the Commission plans to register all Argentinian imports from the
initiation of the investigation in order to discourage Argentinian exporters.
In addition to the United States, Peru and Australia impose significant tariff barriers on
Argentinian biodiesel, making it hard for Argentina to defend its case in the WTO.
“They will not be able to say that the problem is Peru, the United States, Australia and Europe.
The problem is Argentina, which has an unfair policy that the EU must stop,” says Raffaello Garofalo.
The EU is negotiating a free trade deal with Mercosur countries (Argentina, Brasil, Uruguay, Paraguay)
and hopes to reach an agreement by the end of 2017. But Brasil insists that there will be no deal
unless Europe opens its doors to imports of beef and ethanol, a biofuel made from sugar cane.
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