EU ambassador hits out at US subsidy for biodiesel exports
16 January, 2008
The European Commission’s ambassador to the US has launched a rare public attack on the country, for its failure to stop exports of subsidised biodiesel which are claimed to be killing off biodiesel producers in the European Union (EU).
"The European biodiesel industry is being threatened by a flood of subsidised US biodiesel," said John Bruton, who promised to press the US Congress further for an end to the subsidies.
"What we are witnessing here is US taxpayers effectively subsidising European motorists to the tune of around $300m last year," said John Bruton. "And that figure is set to be even higher this year - all while Americans themselves are suffering at the pump."
Europe’s biodiesel sector is pushing for the European Commission to set countervailing duties on imports into the EU of biodiesel. The European Biodiesel Board (EBB) says that imports from the US reached 1m tonnes in 2007, equivalent to 60% of total US biodiesel production and 15–20% of EU sales. EBB decided in December to submit an anti-dumping and anti-subsidy complaint to the European Commission, with a possible complaint later to the World Trade Organisation (see Europeans set to launch legal action over biodiesel ‘dumping’ from US).
Appa Biocarburantes, the biofuels arm of the Spanish biofuel trade organisation Asociación de Productores de Energías Renovables (Appa), said that 9% of US production, or 150,000t, ended up in Spain last year and accounted for half of the Spanish market, leading to the possible collapse of Spain’s biodiesel producers. The imports received €50m of Spanish subsidies, said Appa Biocarburantes, with subsidised exports of biodiesel from Argentina also damaging the Spanish industry.
Appa Biocarburantes said that biofuel production capacity in Spain tripled to 800,000t at 22 plants last year, in line with a national strategy, but that many plants faced closure: "Many of these plants have actually found themselves in a critical situation of shut-down or low production levels."
Appa Biocarburantes called for the Spanish government to end tax benefits for imports into the EU unless it can be proved that that fuel has not received subsidies or other credits.
The heart of the dispute is the $1/gallon ($0.26/litre) US subsidy for biodiesel which is blended with mineral diesel. The EBB sees a particular problem with "splash and dash", involving biodiesel being imported into the US and mixed with just a drop of mineral diesel to gain the subsidy before being exported to the EU. The EBB says that the fuel can be sold in the EU for less than EU producers pay for their raw materials.
