Ethanol Blog

Biodiesel Officials: Argentine, Indonesian Practices Contribute to Trade Deficit

By Todd Neeley , DTN Staff Reporter

The U.S. biodiesel industry made its case Thursday that the trading practices of biodiesel producers in Argentina and Indonesia have contributed to a trade deficit with those nations, in testimony as part of a hearing held in response to a presidential executive order to look into trade deficits.

Officials from the National Biodiesel Board told the DOC there are "significant trade deficits" with Indonesia, as part of the harm caused by the increasing volumes of biodiesel imports.

NBB told the DOC the trade deficit with Indonesia is growing and is at the highest it has ever been at $13.2 billion 2016. According to NBB that represents a 20% increase since 2014. NBB said the trade deficit is fueled in part by increasing volumes of biodiesel imports from Indonesia.

"Between 2014 and 2016, the trade imbalance with respect to biodiesel has grown 95%," said Anne Steckel, vice president of federal affairs at NBB, http://bit.ly/….

"Unfair trade practices have caused this significant surge in biodiesel imports and growing trade deficit, such as massive subsidization by the Indonesian government and dumped pricing by Indonesian biodiesel producers and exporters. These practices have injured and threaten to continue injuring U.S. biodiesel producers."

The NBB said the Indonesian government promotes exports in ways that violate U.S. trade laws. That includes levying high export taxes on crude palm oil, preferential financing from the Indonesian Export-Import Bank, and providing subsidies and various tax incentives for biodiesel producers and supporters.

"By taking advantage of these various subsidies, Indonesian producers have become dominant exporters and taken an increasingly greater share of the U.S. market," the NBB said in a news release.

"In the meanwhile, U.S. producers do not have the same ability to export into Indonesia. Forced to compete with Indonesian producers’ dumped and subsidized prices, U.S. biodiesel producers' financial condition has declined significantly. This has caused U.S. producers to pull back on investments to expand production capacity in what continues to be a growing market."

On May 5, the United States International Trade Commission voted to conduct an investigation into whether biodiesel imports from Argentina and Indonesia have hurt domestic producers. The allegations are the countries' subsidized biodiesel essentially nudged U.S. producers out of their home market. Back in April the U.S. Department of Commerce estimated Argentina's dumping margin could be as high as nearly 27% and Indonesia's at about 28% from 2014-2016.

Preliminary countervailing duty determinations are due on or about June 16, with preliminary antidumping duty determinations due on or about Aug. 30.

The $1 biodiesel tax credit expired at the end of last year. Since then, some members of Congress have offered legislation to set a multi-year extension of the credit and to change the nature of the credit to support only domestic producers.

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

Follow me on Twitter @toddneeleyDTN

(TN)

Comments

To comment, please Log In or Join our Community .