Commerce seeks to protect domestic biodiesel
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November 20, 2017
Commerce seeks to protect domestic biodiesel

The Department of Commerce (DOC) announced that it has determined that Argentina and Indonesia provide “unfair” subsidies to its producers of biodiesel, thereby harming U.S. biodiesel producers that must compete with the low-priced biodiesel imported from these nations.

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Should the U.S. International Trade Commission (ITC) agree with DOC’s finding, the DOC will direct the U.S. Customs and Border Protection to collect cash deposits from importers of biodiesel from Argentina and Indonesia; the deposits will be equal to the subsidies. The DOC says Argentina and Indonesia are providing subsidies to its producers of biodiesel at rates from 71.45 percent to 72.28 percent and 34.45 percent to 64.73 percent, respectively.

A renewable fuel, biodiesel is also America’s first domestically produced, commercially available, and advanced biofuel. It is made from a variety of feedstocks, including recycled cooking oil, soybean oil, and animal fats.  In 2016, U.S. companies produced a record-high 2.8 billion gallons of biodiesel.

18.3 percent share of U.S. market

DOC’s action responded to March 2017 petitions from the National Biodiesel Board Fair Trade Coalition, which comprises the National Biodiesel Board and 15 domestic producers. The petitions were filed under U.S. countervailing duty (CVD) law, which, according to the DOC, “provides U.S. businesses and workers with a transparent, quasi-judicial, and internationally accepted mechanism to seek relief from the market-distorting effect caused by unfair subsidization of imports in the U.S., establishing an opportunity to compete on a level playing field.”

The petitioners stated that biodiesel imports from Argentina and Indonesia surged by 464 percent from 2014 to 2016, taking 18.3 percentage points of market share from U.S. manufacturers. Imports of biodiesel from Argentina again jumped 144.5 percent following the filing of the petitions, said the petitioners. “These surging, low-priced imports prevented producers from earning adequate returns on their substantial investments and caused U.S. producers to pull back on further investments to serve a growing market,” the petitioners stated.

According to the DOC, in 2016, imports of biodiesel from Argentina and Indonesia were valued at an estimated $1.2 billion and $268 million, respectively.

Subsidies and dumping

The petition had two parts. An antidumping petition addressed whether imports coming into the United States are priced below fair value. Dumping is a process in which a company exports a product at a price lower than the price it normally charges on its own home market. A CVD petition addressed subsidiesprovided by foreign governments benefiting imported product. DOC’s current determination is on the subsidies question. The ITC is scheduled to issue a final decision on DOC’s subsidy determination on December 26, 2017. The DOC is scheduled to issue final antidumping determinations in early January, which would be followed by another ITC injury vote as it relates to dumped imports.

64,000 jobs

“The unfair government subsidization of products is something the Department takes very seriously,” said DOC Secretary Wilbur Ross. “While the United States is committed to free, fair and reciprocal trade with all countries, the Trump Administration will stand up for American workers and companies being unfairly harmed.”

Currently, the U.S. biodiesel industry supports about 64,000 jobs, according to the National Biodiesel Board.

A DOC fact sheet on the petition and its subsidy determination is at here.  

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