Biodiesel Blowback

Argentina, Indonesia Make Market Headway

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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The National Biodiesel Board claims imports from Argentina and Indonesia are hurting producers in the United States. (DTN file photo)

OMAHA (DTN) -- Biodiesel producers in Argentina and Indonesia have been flooding the United States market since 2014 with subsidized biodiesel and essentially nudging U.S. producers out of their home market, according to an anti-dumping and countervailing duty petition filed by the National Biodiesel Board on Thursday.

In a news release the NBB said biodiesel imports from Argentina and Indonesia have increased by more than 460% from 2014 to 2016, gaining about 18% in U.S. market share that could be filled by North American producers.

The groups claim in the petition to the U.S. Department of Commerce and the U.S. International Trade Commission that the two nations gained the market share illegally. The market expanded more than 58% in 2014-2016, but the biodiesel board stated domestic biodiesel producers weren't the ones who gained market share over that time.

"Instead, subject foreign producers offered cut-rate prices in order to take U.S. market share from domestic producers," the petition stated.

Imports "depressed and suppressed U.S. producer prices," the biodiesel board stated. "The domestic industry is vulnerable and the current situation is untenable."

The market situation won't change unless Argentinian and Indonesian biodiesel producers are met with some antidumping and countervailing duty orders.

"Without relief from these dumped and subsidized imports, the ability of domestic biodiesel producers to justify their past investments in U.S. manufacturing and workers, and to plan future investments in innovative green energy solutions is very much in jeopardy."

Donnell Rehagen, National Biodiesel Board chief executive officer, said companies in Argentina and Indonesia "are getting advantages that cheat U.S. trade laws and are counter to fair competition." Rehagen added that the imbalance in trade is "suffocating" U.S. biodiesel producers.

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"Our goal is to create a level playing field to give markets, consumers and retailers access to the benefits of true and fair competition," he said.

NBB's petition alleges Argentine and Indonesian producers are selling their biodiesel at prices well below production costs. The NBB alleges Argentina is making a 23% profit and Indonesia 34% on biodiesel imports into the U.S. based on "illegal" subsidies from government programs in both countries.

U.S. Sen. Maria Cantwell, D-Wash., who along with Sen. Charles Grassley, R-Iowa, introduced legislation last year to convert the biodiesel blenders tax credit to a domestic production credit to prevent foreign biodiesel producers from benefitting from U.S. tax policy, said in a statement Thursday that the federal agencies need to act.

"We've known for a long time that foreign producers of biodiesel have been flooding our markets at the expense of American producers, knowing they can take advantage of our tax policy," she said.

"Today's suit confirms just how dire the situation has become. I hope that the department of commerce and ITC will give this suit every appropriate consideration and work to protect American biodiesel producers. I will continue to work across the aisle to reform the biodiesel tax credit so that it does what it was intended to do: incentivize the production of clean, renewable biodiesel here in the United States."

BIOFUELS OPPOSITION

Michael McAdams, president of the Advanced Biofuels Association, said he opposes the NBB action because it ultimately could hurt consumers.

"These allegations are simply not true," he said.

"The members of the Advanced Biofuels Association vehemently oppose this action and expect these petitions' rejections, similar to the EU's recent rejections of NBB's efforts conducted in Europe. With the future of advanced biofuels at stake, this is no time to be penny-wise and pound-foolish with alternative sources of this vital low-carbon fuel.

"Customers who chose to use internationally-sourced biodiesel for transportation fuels or heating oil are significantly impacted by this petition, particularly in the Northeast corridor."

TRADE HISTORY

It isn't the first time someone has challenged Argentina and Indonesia on their fuel export practices.

In May 2013 the European Commission announced provisional anti-dumping duties against the countries. Peru imposed both antidumping and countervailing duties on biodiesel from Argentina last year.

In May 2015, the NBB petitioned the U.S. Environmental Protection Agency to stay a decision to streamline Argentinian biodiesel imports to the U.S. in the Renewable Fuel Standard. The RFS requires foreign biodiesel producers to map and track feedstocks used in order to meet sustainability requirements.

The EPA allows Argentinian biodiesel producers to instead rely on a survey plan implemented by a third party to show feedstock compliance. The NBB said the decision put U.S. producers at a disadvantage.

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

Follow him on Twitter @toddneeleyDTN

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Todd Neeley

Todd Neeley
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