INTERACTIVE: Global biodiesel market undergoes ADD shake-up

LONDON (ICIS)–The global biodiesel market has seen several changes in anti-dumping duties (ADDs) around the world this year, mainly concerning Argentinian and Indonesian biodiesel.

After Argentina’s successful complaint to the World Trade Organisation (WTO), the EU’s executive body, the European Commission, was told to lower existing ADDs against Argentinian biodiesel.

From 20 September 2017, the ADDs were lowered from the original 22.0-25.7% to 4.5-8.1%.

The duties were originally placed on Argentinian soybean methyl ester (SME), as well as Indonesian palm oil methyl ester (PME), in 2013 on the basis that the EU said the producers were given an unfair advantage because of the differential export tax policies in the countries.

The 28 country bloc argued that this meant that export taxes on the biodiesel products were cheaper than those on the raw materials, soybean oil and crude palm oil (CPO).

The tariffs were due to end in November 2018 but producers from both countries lodged complaints with the WTO.

Argentina’s government made its complaint to the WTO in December 2013, with Indonesia’s executive following suit with its own complaint in June 2014.

The WTO ruled in March 2016 that the anti-dumping duties against Argentina were unfair, and the EU Commission was told to bring the tariffs in line with the general agreement on tariffs and trades 1994 and the anti-dumping agreement.

The EU’s decision was due in August, but it was postponed to September amid concerns from member states about possible negative implications for the European biodiesel industry following a decrease of the duties.

Click on the arrows or slider to see the changing duties through the years, and hover over the timeline for more information

The eventual reduction of ADDs left European biodiesel producers apprehensive, with Argentinian material already in ships en route to Europe before the ADDs were official reduced.

European players raised concerns that an influx of SME into the region could significantly reduce demand for the traditionally more expensive rapeseed methyl ester, which is the primary biodiesel produced in Europe.

There is also an ongoing investigation by the WTO into the ADDs on Indonesian biodiesel being imported into Europe, with a decision expected in December.

Also in 2017, the US announced in August that it was placing preliminary anti-subsidy duties on Argentinian and Indonesian biodiesel of up to 64.17%.

Final tariffs were announced in November and ranged from 71.45-72.28% for soy-based biodiesel from Argentina, and 34.45-64.73% for palm oil-based biodiesel from Indonesia.

The new countervailing duties from the US come on top of proposed anti-dumping duties announced in October, also affecting Argentinian and Indonesian biodiesel.

This announcement was particularly difficult for the Argentinian government as the country is forecast to have a large soybean crop this year.

This meant Argentinian producers turned to Europe in anticipation of the import opportunities the change created, hence why shipments of Argentinian biodiesel were bound for Europe before the reduction had officially been announced.

European biodiesel players have said that there is likely to be little effect on RME buying interest during the winter because this is typically a high period of demand for that product, which has a lower freezing point than summer-grade biodiesels like PME and SME.

However, market participants expect RME demand to take a hit during the second quarter of 2018, when players begin to switch to summer grade biodiesel, with some sources suggesting RME production could drop in Europe as a result.

Pictured above: Field of rapeseed in Sweden. Rapeseed methyl ester is the main biodiesel produced in Europe
Source: Alf Jonsson/imageBROKER/REX/Shutterstock

Focus article by Samantha Wright

Additional reporting by Melissa Bartlett and Leela Landress de Perez