US group files antidumping petition on Argentine, Indonesian biodiesel

EL PASO, Texas (ICIS)–The US National Biodiesel Board (NBB) said on Thursday it has filed an antidumping and countervailing duty petition with the US government to investigate imports from Argentina and Indonesia, saying the countries have violated trade laws by flooding the US market with dumped, subsidised biodiesel.

The NBB filed the request with the US Department of Commerce and US International Trade Commission on behalf of US biodiesel producers, who have been hit by soaring imports of the biofuel in recent years, the group said in a statement.

“The NBB and US biodiesel industry [are] committed to fair trade, and we support the right of producers and workers to compete on a level playing field,” said Donnell Rehagen, National Biodiesel Board chief executive. “This is a simple case where companies in Argentina and Indonesia are getting advantages that cheat US trade laws and are counter to fair competition. NBB is involved because US biodiesel production, which currently support more than 50,000 American jobs, is being put at risk by unfair market practices.”

US imports of biodiesel, which totalled 353m gal (1.336bn litres) in 2015, nearly doubled in 2016 to reach a record-high 693m gallons. More than half of US imports of biodiesel — 64% — originated from Argentina, with much of the rest coming from Indonesia (15%) and Canada (14%), according to the US Energy Information Administration’s (EIA) latest data.

“US imports of biomass-based diesel, which include biodiesel and renewable diesel, increased by 65% in 2016 to reach a record level of 916m gallons,” the EIA said.

“Increasing Renewable Fuel Standard (RFS) targets and the recently expired biodiesel blender’s tax credit were strong drivers of biomass-based diesel demand in 2016, incentivising increased levels of imports of both biodiesel and renewable diesel,” the EIA added. “The biodiesel blender’s tax credit has expired several times in the past, most recently expiring at the end of 2014, only to be retroactively reinstated.”

The NBB said biodiesel imports from Argentina and Indonesia rose 464% from 2014 to 2016, taking about 18% of market share.

“The resulting imbalance caused by unfair trade practices is suffocating US biodiesel producers,” Rehagen explained. “Our goal is to create a level playing field to give markets, consumers and retailers access to the benefits of true and fair competition.”

According to the NBB, Argentine and Indonesian producers are dumping their biodiesel in the US by selling at prices that are substantially below their costs of production. This is reflected in the petition’s alleged dumping margins of 23.3% for Argentina and 34% for Indonesia. The petition also alleges illegal subsidies based on numerous government programmes in those countries.

The EIA said that roughly half (53%) of biodiesel imports arrived along the US Atlantic coast because of the favourable economics of importing seaborne cargoes to that region relative to the movement of domestically produced product by rail from the Midwest.

On a monthly basis, biodiesel imports exceeded 100m gal for the first time in December 2016. The five largest volumes for monthly biodiesel imports occurred during the second half of 2016, ahead of the expiration of the $1/gal biodiesel blender’s tax credit, the EIA said.

The EIA’s most recent Short-Term Energy Outlook projects biomass-based diesel imports to remain largely flat in 2017 because of the expiration of the blender’s tax credit, before increasing in 2018 as a result of increasing RFS targets.

Net imports of biomass-based diesel are expected to remain largely unchanged at roughly 800m gal in 2017, accounting for approximately one-third of total US biomass-based diesel consumption in 2017, before increasing to around 900m gal in 2018, according to EIA data.