US biodiesel producers file antidumping petition against Argentina, Indonesia

24.03.2017

Surging US biodiesel imports from Argentina and Indonesia have unfairly hurt domestic producers and should face antidumping and countervailing duty measures, the National Biodiesel Board argued Thursday in a petition to US trade authorities.

NBB, the trade group for US biodiesel producers, said imports from the two countries had increased 464% by the end of last year compared with 2014, and their share of the US market more than doubled to a combined 32% last year, compared with 14% in 2014.

"The domestic industry is vulnerable and the current situation is untenable," NBB said in a petition to the US Commerce Department and US International Trade Commission.

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

The petition accused Argentina of subsidizing raw materials costs and Indonesia of granting hundreds of millions of dollars to a handful of biodiesel producers. It said the subsidies have captured US market share through dumped pricing, with margins as high as 23% in Argentina and 34% in Indonesia.

DEMAND, NOT SUBSIDIES

Michael McAdams, president of the Advanced Biofuels Association, said the petition is baseless. He represents Carbio, Argentina's biofuel trade group; Wilmar International, which produces biodiesel in Indonesia and Malaysia; and numerous US customers that buy the imported 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," he said.

McAdams said US biodiesel imports have surged because of demand from the Renewable Fuel Standard's blending mandate, which domestic producers have not been able to keep up with.

The RFS requires 2 billion gallons of biodiesel to be blended into the US transportation fuel supply this year, up from 1.9 billion gallons in 2016 and 1.73 billion gallons in 2015.

McAdams said the petition puts the annual RFS biodiesel targets in jeopardy, because the program depends on security of supply from foreign markets.

He expects Commerce to take about six months to reach a preliminary finding in the case, but the whole process could take years.

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LAPSED TAX CREDIT

US net imports of biodiesel more than doubled to 471,000 b/d in 2016, compared with 208,000 b/d in 2015, with record flows from Argentina making up 74% of last year's total net imports, according to US Energy Information Administration data.

Net imports from Argentina more than doubled to 347,000 b/d in 2016, compared with 153,000 b/d in 2015.

In December, US net biodiesel imports rose 22% from November to 83,000 b/d, with net imports from Argentina surging 61% month on month to 61,000 b/d. Import statistics for the first months of 2017 have not yet been released.

US biodiesel producers have pushed for months for changes to a key tax incentive in response to the record-high imports but have so far been unsuccessful.

NBB argues that rising imports from Argentina, Indonesia and Singapore represent unfair competition if they receive tax credits at home, and again when they land in the US. Just like domestic fuel, the imports were eligible for a $1/gal blender's tax credit.

NBB was lobbying Congress to extend that incentive through 2019 and make it benefit biodiesel producers, instead of blenders.

The blender's credit expired at the end of the year, but the trade group continues to lobby Congress to change it and make the credit retroactive to January 1.


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