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Commerce Department issues final determination on biodiesel imports

Argentina and Indonesia found to have provided subsidies to their biodiesel producers in violation of international trade rules.

On Thursday, the U.S. Department of Commerce issued a final determination in a case brought by the National Biodiesel Board (NBB) Fair Trade Coalition regarding subsidized biodiesel imports from Argentina and Indonesia. Earlier this year, the Commerce Department made a preliminary finding that Argentina and Indonesia provide subsidies to their biodiesel producers in violation of international trade rules.

Thursday’s decision cements that earlier finding, and the cash deposit rates required of importers of biodiesel will be updated to reflect this final determination.

“The biodiesel industry has been injured for the past several years due to unfairly traded imports from Argentina and Indonesia. We appreciate that these unfair subsidies are being addressed so we can fix this particular obstacle to continued growth in the domestic industry,” said Doug Whitehead, NBB chief operating officer. “Though not yet over, this is a step forward in ensuring the product that supports nearly 64,000 jobs is not undercut by unfair imports.”

To reflect the final determination, the Commerce Department will update the cash deposit rates that importers of Argentinian and Indonesian biodiesel must pay on biodiesel imported from those countries. The cash deposit rates range from 71.45% to 72.28% for biodiesel from Argentina and from 34.45% to 64.73% for biodiesel from Indonesia, depending on the particular foreign producer/exporter involved.

The NBB Fair Trade Coalition filed these petitions to address a flood of subsidized and dumped imports from Argentina and Indonesia that resulted in market share losses and depressed prices for domestic producers. Biodiesel imports from Argentina and Indonesia surged by 464% 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% following the filing of the petitions. 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.

To be successful in securing relief, a party must file not only with the Commerce Department but also with the U.S. International Trade Commission (ITC). The Commerce Department determines whether the imports are subsidized and/or dumped, while ITC determines whether the domestic industry has been injured by reason of such unfairly traded imports. The Commerce Department also determines the margin of duties to impose on imports based on the degree of dumping and subsidies found.

ITC was holding a public hearing Nov. 9 in Washington, D.C., where coalition members were testifying before ITC commissioners. ITC is scheduled to hold its final injury vote on subsidies on Dec. 5. If the final injury vote in December is affirmative, the Commerce Department will publish final countervailing duty orders on the question of subsidies.

The coalition filed both antidumping and countervailing duty petitions with the Commerce Department. Antidumping petitions address concerns whether imports coming into the U.S.are priced below fair value. Countervailing duty petitions address subsidies provided by foreign governments benefiting imported product. Today’s decision is on the subsidies question.

The antidumping investigations will follow a different schedule, with the Commerce Department scheduled to issue final antidumping determinations in early January, followed by another ITC injury vote as it relates to dumped imports.

Biodiesel -- made from an increasingly diverse mix of resources, such as recycled cooking oil, soybean oil and animal fats -- is a renewable, clean-burning diesel replacement that can be used in existing diesel engines without modification. It is the nation’s first domestically produced, commercially available advanced biofuel. NBB is the U.S. trade association representing the biodiesel and renewable diesel industries, including producers, feedstock suppliers and fuel distributors.

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