Biodiesel Duty Step Taken

OMAHA (DTN) -- The U.S. biodiesel industry on Thursday moved one step closer to cementing anti-dumping duties on imports from Argentina and Indonesia, as the U.S. Department of Commerce issued a final determination on those duties this week.

At the end of October, the DOC made a preliminary determination on cash-deposit rates that importers of biodiesel from those countries must pay.

On Thursday, the agency set the rates at 71.45% to 72.28% for biodiesel from Argentina, and 34.45% to 64.73% for biodiesel from Indonesia, depending on the exporter. The higher rates are aimed at essentially leveling the playing field for U.S. producers to compete with producers that receive government subsidies in those countries.

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.

"Imports of biodiesel from Argentina again jumped 144.5% following the filing of the petitions," NBB said in a statement. "These surging, low-priced imports prevented producers from earning adequate returns on their substantial investments and caused U.S. producers to pull back on further investments to serve a growing market."

The International Trade Commission held a public hearing on Thursday, ahead of a scheduled Dec. 5 "final injury" vote on the Argentinian and Indonesian subsidies. If the ITC votes in favor of the action, the DOC will publish final countervailing duty orders on the question of subsidies. Commerce officials are expected to announce the final determination by Jan. 3, 2018.

For years, the U.S. biodiesel industry has battled a wave of federal policy uncertainties that have prevented the industry from expanding production. The $1 blenders tax credit expired on Dec. 31, 2016, and has yet to be renewed. In addition, the U.S. Environmental Protection Agency has set Renewable Fuel Standard volumes for biomass-based diesel at levels the industry contends do not reflect production realities.

NBB Chief Operating Officer Doug Whitehead said imports from the two countries have hurt U.S. producers for years.

"The biodiesel industry has been injured for the past several years due to unfairly traded imports from Argentina and Indonesia," he said. "We appreciate that these unfair subsidies are being addressed, so we can fix this particular obstacle to continued growth in the domestic industry. Though not yet over, this is a step forward in ensuring the product that supports nearly 64,000 jobs is not undercut by unfair imports."

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 April 2017, the DOC initiated antidumping and countervailing duty investigations aimed at biodiesel imports from Argentina and Indonesia in response to a petition filed by U.S. biodiesel industry interests.

In July 2017, the National Biodiesel Board asked the DOC to immediately slap duties on imports of Argentinian biodiesel, claiming in a petition that "critical circumstances" exist to warrant the action.

A provision of antidumping and countervailing duties laws allows duties and imports to be imposed before a preliminary determination is made on subsidies and dumping allegations previously made by the industry in the United States.

In the July petition, the NBB requested relief in the form of retroactive duties. The action was designed to deter further imports. That would allow the government to impose duties retroactively on imports reaching U.S. shores up to 90 days prior to the DOC's preliminary determinations on the claims in the petitions.

To determine if critical circumstances exist, the DOC was required to find that there are "massive" imports in a relatively short period of time, as well as other legal criteria including whether those imports benefitted from illegal subsidies.

Earlier this year, the NBB filed petitions with the DOC and ITC, which alleged significant increases in subsidized and dumped biodiesel imports from Argentina and Indonesia have injured U.S. producers.

In written comments to the ITC, the Argentine government said the petition was based on "extremely limited" information and actually shows the U.S. industry was hardly harmed.

Argentina made the case that U.S. producers never made a claim that imported biodiesel actually hurt profits. In addition, the government argues U.S. producers alone were unable to fulfill the RFS volume requirements from 2014 to 2016.

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

Follow him on Twitter @toddneeleyDTN

(AG/CZ)

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