U.S. investigating alleged dumping of biodiesel from Argentina, Indonesia

26.04.2017

Preliminary investigations into allegations that Argentina and Indonesia are violating U.S. trade laws by flooding the U.S. market with dumped and subsidized biodiesel started on April 20 with a staff conference by the U.S. International Trade Commission (ITC).

The National Biodiesel Board (NBB) presented testimony, along with representatives of several U.S. biodiesel companies. Parties opposing the petition, including importers and producers of Argentine and Indonesian biodiesel, also presented testimony and responded to the ITC staff’s questions.

The staff conference is one of the initial steps in the ITC investigation, which is expected to issue a preliminary decision on or before May 8. If the ITC finds imports hurt the U.S. industry, the investigations will continue with preliminary determinations on countervailing duty (CVD) in June and on anti-dumping (AD) in August.

The U.S. Commerce Department initiated the AD and CVD investigations in mid-April, following a petition filed by the National Biodiesel Fair Trade Coalition, an association that includes the NBB and 15 U.S. producers of biodiesel.

“Initiation of these investigations validates the allegations in our petition, and we look forward to working with the U.S. government agencies during the course of the next year to enforce America's trade laws,” said Anne Steckel, NBB vice-president of federal affairs in response to this announcement.

The Commerce Department said dumping occurs when a foreign company sells a product in the United States at less than its fair value. A countervailable subsidy is financial assistance from a foreign government that benefits the production of goods from foreign companies and is limited to specific industries, or is contingent on export performance or the use of domestic goods over imported goods.

The NBB said 2016 should have been a banner year for U.S. biodiesel producers, but instead dumped and subsidized biodiesel from Argentina and Indonesia entered the U.S. in record volumes.

“The loss of market share has left the domestic industry with substantial unused capacity and the artificially low prices these imports are sold at leave American biodiesel unable to get a fair return for their product,” NBB said.

NBB said biodiesel imports from Argentina and Indonesia increased 464% from 2014 to 2016. That growth has taken 18.3 percentage points of market share from U.S. manufacturers, it said.

According to the U.S. Census Bureau, U.S. biodiesel imports from Argentina in 2014 amounted to 156,407 tonnes valued at $136 million. That increased to 1.475 million tonnes in 2016 valued at $1.2 billion. Imports from Indonesia went from 170,962 tonnes valued at $137.8 million in 2014 to 370,969 tonnes valued at $268.2 million.

According to the Commerce Department’s notice of initiation, there is evidence that dumping margins could be as high as 26.54% for Argentina and 28.11% for Indonesia.

“Negative margins within our industry due to low-priced imports have had a major impact on our company, with a disproportionately greater impact on smaller producers,” said Robert Morton, co-founder of Newport Biodiesel, a small biodiesel producer from Rhode Island. “We have halted several plant modification projects as a result of reduced working capital, even for modest projects. Because of this, Newport Biodiesel is being limited in its ability to be a productive US green energy company in what is otherwise a growing market.”

The adverse impact of dumped and subsidized imports is not limited to America’s small biodiesel producers, NBB said.

“When we see biodiesel from Argentina selling at a discount to the market price of soyoil, the main input into biodiesel, we know we are facing dumped pricing,” said Paul Soanes, chief executive officer and president of Renewable Biofuels (RBF). “The United States is a key market for these exporters, and without a remedy, these unfairly traded imports are likely to continue unabated. That is a further threat to our business.”


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