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Commerce department determines biodiesel countervailing duties warrantedCommerce department determines biodiesel countervailing duties warranted

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

Jacqui Fatka

August 22, 2017

3 Min Read
Commerce department determines biodiesel countervailing duties warranted
United Soybean Board

The National Biodiesel Board's (NBB) Fair Trade Coalition won a preliminary countervailing duty determination from the U.S. Department of Commerce regarding subsidized biodiesel imports from Argentina and Indonesia. The Commerce Department found that Argentina and Indonesia provide subsidies to their biodiesel producers in violation of international trade rules. In addition, it found “critical circumstances” to address the post-petition surge of imports from Argentina, paving the way for the imposition of retroactive duties going back to May 2017.

“The Commerce Department has recognized what this industry has known all along: that foreign biodiesel producers have benefited from massive subsidies that have severely injured U.S. biodiesel producers. We’re grateful that the Commerce Department has taken preliminary steps that will allow our industry to compete on a level playing field,” NBB chief operating officer Doug Whitehead said.

As a result of this ruling, importers of biodiesel from Argentina and Indonesia will be required to pay cash deposits on biodiesel imported from those countries. The cash deposit rates range from 50.29% to 64.17% for biodiesel from Argentina and from 41.06% to 68.28% for biodiesel from Indonesia, depending on the particular foreign producer/exporter involved. Cash deposit requirements will be imposed when this preliminary determination is published in the Federal Register sometime next week.

In addition, based on the Commerce Department’s “critical circumstances” finding, these rates for Argentina will apply retroactively 90 days from the date of the Federal Register notice. Renewable Energy Group Inc. interim president and chief executive officer Randy Howard said with the critical circumstance finding against Argentina, “the U.S. government sent a strong signal that these trade practices should not continue as this case proceeds.”

The NBB Fair Trade Coalition filed these petitions to address a flood of subsidized and dumped imports from Argentina and Indonesia that has 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. 

Between the preliminary and final determinations, the Commerce Department will audit the foreign producers and governments to confirm the accuracy of their data submissions. Parties will file briefs on issues arising from the agency’s preliminary countervailing duty determinations, and the Commerce Department will hold a hearing. Preliminary determinations in the companion antidumping investigations are due to be issued in October. Final agency determinations will be issued later this year or in early 2018, with a final determination by the International Trade Commission soon thereafter.

Howard added, “This should give American biodiesel producers the opportunity to make more cleaner-burning advanced biofuel here at home. As we and others have testified to the (Environmental Protection Agency) and the Administration during the public comment period on the (renewable volume obligations) earlier this month, our domestic industry can easily increase production to match volumes similar to what we have seen from Argentina and Indonesia. We can then realize the increasing benefits biodiesel provides for American workers, our economy and our environment.”

About the Author(s)

Jacqui Fatka

Policy editor, Farm Futures

Jacqui Fatka grew up on a diversified livestock and grain farm in southwest Iowa and graduated from Iowa State University with a bachelor’s degree in journalism and mass communications, with a minor in agriculture education, in 2003. She’s been writing for agricultural audiences ever since. In college, she interned with Wallaces Farmer and cultivated her love of ag policy during an internship with the Iowa Pork Producers Association, working in Sen. Chuck Grassley’s Capitol Hill press office. In 2003, she started full time for Farm Progress companies’ state and regional publications as the e-content editor, and became Farm Futures’ policy editor in 2004. A few years later, she began covering grain and biofuels markets for the weekly newspaper Feedstuffs. As the current policy editor for Farm Progress, she covers the ongoing developments in ag policy, trade, regulations and court rulings. Fatka also serves as the interim executive secretary-treasurer for the North American Agricultural Journalists. She lives on a small acreage in central Ohio with her husband and three children.

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