Editor’s Note: The Commerce Department recently ruled that Argentina and Indonesia are illegally subsidizing their biodiesel imports. As these two nations are leading providers of biodiesel to the U.S., the decision is a win for domestic biodiesel manufacturers, but will also increase the price of biodiesel. To read more about the impacts of this measure, check out Mansfield Supply Director Sara Bonario’s article from this quarter’s FN360 by clicking here.
The National Biodiesel Board (NBB) Fair Trade Coalition won a preliminary countervailing duty determination from the Commerce Department 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, Commerce 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,” said Doug Whitehead, chief operating officer of the National Biodiesel Board.
As a result of Commerce’s ruling, importers of Argentinian and Indonesian biodiesel will be required to pay cash deposits on biodiesel imported from those countries. The cash deposit rates range from 50.29 to 64.17 percent for biodiesel from Argentina, and 41.06 to 68.28 percent 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 Commerce’s “critical circumstances” finding, these rates for Argentina will apply retroactively 90 days from the date of the Federal Register notice.
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 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. 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 Commerce determinations will be issued later this year, or in early 2018, with a final determination by the International Trade Commission soon thereafter.
Made from an increasingly diverse mix of resources such as recycled cooking oil, soybean oil and animal fats, biodiesel 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. The National Biodiesel Board is the U.S. trade association representing the biodiesel and renewable diesel industries, including producers, feedstock suppliers and fuel distributors.
For more about the National Biodiesel Board, visit www.nbb.org