MercoPress. South Atlantic News Agency

European Union considering punitive duties on Argentine bio-diesel

If backed by EU governments at a vote later this month, the duties could be imposed by the end of November.

Argentine bio-diesel producers will fight European Union proposals to impose punitive duties on imports from the country, saying the move would remove its biggest export market and raise prices in Europe.

The EC has proposed duties of 20% equivalent to between 216 and 245 Euros per ton on bio-diesel imports from Argentina, and of between 121 to 178 Euros a ton on imports from Indonesia alleging ‘dumping’.

Currently a provisional duty of 8% has been implemented.

Additionally the EC allegedly has plans to remove Argentina from the list of developing countries and thus finalizing some tariff privileges. The EU absorbs 70% of Argentina’s bio-diesel exports.

The 28-nation bloc accuses producers in the two countries of selling their product at unfairly low prices, harming European producers.

“We will seek to defend ourselves against this decision, which we consider unfair,” said Luis Zubizarreta, head of Argentine bio-fuel body CARBIO.

“Clearly, Argentina will not be able to export so much as a litre to Europe, and European bio-diesel prices will rise. We will have to produce less bio-diesel,” he said.

If backed by EU governments at a vote later this month, the duties could be imposed by the end of November.

That in turn could prompt a legal challenge from Jakarta and Buenos Aires at the World Trade Organization, a source familiar with the issue said.

Together, the two countries account for 90% of EU bio-diesel imports and more than a fifth of the bloc's annual consumption.

Among the firms set to be hit by the duties are agri-business Bunge Ltd and Louis Dreyfus Commodities, which face duties of 216 and 239 Euros per ton respectively on their exports from Argentina.

A report by Buenos Aires-based consultants IES this week showed that Argentina's bio-diesel production fell by 40% in the first eight months of 2013 from the same period last year, while exports fell nearly 60% in the same timeframe.

If backed by EU governments at a vote later this month, the duties could be imposed by the end of November.