MercoPress. South Atlantic News Agency

EU imposes duties on Argentine biodiesel

Argentina’s Foreign Minister Héctor Timerman warned in an official statement

The European Union is imposing punitive duties on imports of biodiesel from Argentina and Indonesia, charging them with selling the product into the bloc at unfairly low prices, setting provisional tariffs ranging from 6.8 to 10.6 % for imports from Argentina and between zero and 9.6 % for those from Indonesia.

Argentina is the world's No. 1 biodiesel exporter, and the two countries represent 90 5 of EU biodiesel imports. Their share of the EU market rose to 22 percent in 2011 from 9 % in 2009.

The duties will be effective as from Wednesday and the investigation will continue, with member states expected to vote on definitive duties - typically imposed for five years - before the end of November.

Argentina’s Foreign Minister Héctor Timerman warned in an official statement that “this measure responds to the incapacity of European producers to compete with more efficient producers. In the same way that the measures announced in Europe show the decision to close markets against the competition of more efficient producers, our response to the World Trade Organization (WTO) shows the firm decision of the Argentine government to carry out all the necessary actions, within the margins of international law, to protect the actions that are opposite to in force-rules regarding production and exportation of our country.

The European Union is conducting a parallel investigation into allegations of unfair subsidies for producers in Argentina and Indonesia. EU regulators have said taxes imposed on Argentina's exports of crops such as soybean oil used to make biodiesel, but not on the finished product, make it uneconomical for EU refiners to produce biofuel from Argentine raw materials.

On May 15, Argentina lodged a formal complaint to the WTO over rules that restrict the entrance of local biodiesel sales to Belgium, France, Italy and Poland. Furthermore, Spain was indeed forced to amend import restrictions following Argentina’s stance at the WTO.

Biodiesel companies were confident that the May 15 action would prompt positive reactions in Europe with locals regaining the market. Head of the Argentine Chamber of Biodiesel (CARBIO in Spanish) Luis Zubizarreta said that EU’s position is “groundless.”

Indonesia has said it might complain to the WTO if the European Union imposes penalties. Argentina launched a challenge at the WTO this week against EU rules for importing and marketing biodiesel.