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US Grants Argentina Review of Biodiesel Duties

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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Argentina's government has asked for a review on a United States' decision to slap duties on the nation's biodiesel imports into the U.S. (Photo courtesy of the National Biodiesel Board)

Argentina's biodiesel industry will get a second look from the U.S. Commerce Department on its decision to penalize the country's biodiesel exports to the United States with antidumping and countervailing duties.

The DOC earlier this week granted a request from the Argentinian government to initiate a review of the decision. Such a review typically takes 270 days to complete. That means it may be August 2019 before a final determination is made.

The DOC imposed final countervailing duty rates earlier this year ranging from 71.45% to 72.28% and antidumping duty rates ranging from 60.44% to 86.41%.

In Argentina's request for a review, the country said it has "decreased significantly the export tax on soybeans and other commodities in the soybean value chain, and imposed a new biodiesel export tax," that warrants a review by U.S. officials.

U.S. officials set the higher rates to essentially level the playing field for U.S. producers to compete with producers that receive government subsidies in Argentina and Indonesia. Biodiesel imports from Argentina and Indonesia grew by 464% from 2014 to 2016, according to the National Biodiesel Board, essentially erasing 18.3 percentage points of market share from U.S. producers.

In 2016, imports of biodiesel from Argentina and Indonesia were valued at an estimated $1.2 billion and $268 million, respectively, according to the DOC.

In a news release on Thursday, National Biodiesel Board Chief Executive Officer Donnell Rehagen said the U.S. decision should stand.

"The commerce department has no basis for initiating this unprecedented review," he said. "Commerce has established procedures for conducting reviews with extensive fact-finding for the very purpose of revisiting antidumping and countervailing duty rates but has never used 'changed circumstances' reviews for these purposes.

"Commerce's initiation of these reviews just months after finding that Argentina has engaged in unfair trade practices creates a great deal of uncertainty for our industry at a time when the positive results of the original cases are just beginning to be realized."

The NBB said in a news release that when the DOC set the duties, "domestic biodiesel producers stepped up their efforts, put substantial under-utilized production capacity back to work, and boosted homegrown biodiesel production. In these circumstances, it is a complete mystery why commerce would open a path to a resumption of unfairly traded imports. This action jeopardizes our industry's progress and the American jobs our industry supports, and it places added pressure on our nation's farmers who are already suffering from low commodity prices and uncertain trade conditions."

John Heisdorffer, president of the American Soybean Association, said in a statement that its group doesn't believe Argentina's actions warrant a review.

"U.S. soybean farmers appreciate the administration's recognition that subsidized imports of biodiesel from Argentina distort markets and adversely impact U.S. producers and farmers," he said. "We are concerned the decision to review has the potential to disturb these well-founded determinations."

NBB Vice President of Public Affairs Kurt Kovarik said the DOC's actions are contrary to President Donald Trump's commitment to biofuels.

"Importantly, soybean growers have seen large global markets closed to them and the EPA has cut the biodiesel industry's market in the U.S. by 300 million gallons, while handing out RFS exemptions to every refiner that asked," Kovarik said in a statement. "It is unfathomable how commerce could take such unprecedented action at a time when American farmers are piling surplus soybeans on the ground."

As a result of a surge in lower-priced biodiesel imports from Argentina and Indonesia, U.S. producers were prevented from "earning adequate returns on their substantial investments and stifled the ability of U.S. producers to make further investments to serve a growing market," NBB said.

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