Ethanol Blog

US may Scale Back Duties on Argentine Biodiesel Imports

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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The U.S. Department of Commerce is considering a proposal to scale back countervailing duties on biodiesel imports from Argentina. (Photo courtesy Renewable Energy Group)

The U.S. Department of Commerce issued a preliminary decision this week that would virtually eliminate countervailing duties on biodiesel imports from Argentina.

The DOC has been conducting a "changed circumstances" review of those duties, finding recent changes to Argentina's export tax regime eliminated government subsidies to its country's producers.

If the decision is finalized this means countervailing duty rates on Argentine biodiesel entering the United States would fall from an average of 72% to about 10%. The DOC proposed no changes to antidumping duty rates that currently average 75%.

The DOC originally imposed final countervailing duty rates in 2018 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 warranted a review by U.S. officials.

The U.S. 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.

Kurt Kovarik, vice president of federal affairs for the National Biodiesel Board, said in a statement that the DOC's new proposed action "appears to be an unprecedented and unjustified accommodation to Argentinian producers that threatens to harm U.S. biodiesel producers and soybean farmers."

Kovarik said his group has continued to make the case that Argentina continues to "massively subsidize" its biodiesel industry.

"Commerce's proposal to eliminate trade protections for U.S. biodiesel producers and soybean farmers is difficult to understand at a time when the Trump administration is asking them to bear huge economic costs from trade disruptions," he said.

"The trade enforcement and protection had been a bright spot this year for U.S. biodiesel producers and soybean farmers who were negatively impacted by other trade disruptions. Despite the uncertainty created when commerce launched this review last November, U.S. producers have stepped up to the plate and increased production nearly every month since mid-2017. "

Todd Neeley can be reached at todd.neeley@dtn.com

Follow me on Twitter @toddneeleyDTN

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