* Country-wide duty is unusual
* Fuel to be covered in potential EU-US trade pact
By Ethan Bilby
BRUSSELS, Feb 22 The EU will place a duty on all
U.S. bioethanol imports to the 27-nation bloc from Saturday, in
a move that has prompted Washington to express "serious
concerns" and that comes as both sides prepare to launch
negotiations on a free-trade deal.
The European Union will levy a 9.5 percent tariff on all
bioethanol coming from the United States, the bloc's Official
Journal said on Friday, concluding a 15-month investigation that
argued U.S. bioethanol was being dumped, or sold below cost.
Since most bioethanol is a component in blended fuel, the
ruling sets a fixed charge of 62.30 euros ($82.38) per net tonne
of bioethanol present in fuel.
Brussels says that U.S. incentives to produce clean fuels
constitute an illegal subsidy under world trade rules, and have
allowed U.S. producers to sell cheap fuel to Europe, an
accusation rejected by U.S. producers.
But U.S. industry groups representing companies such as
Valero Renewable Fuels, CHS, and Patriot
Renewable Fuels, say they will challenge the ruling.
The United States is the largest producer of bioethanol,
with the EU market worth about $3 billion in 2010. Overall
shipments from the United States to the EU are worth more than
700 million euros ($925 million) a year.
A U.S. trade official said this week Washington had "serious
concerns about a number of procedural and methodological
irregularities that took place during the final stages of the
The EU's decision comes 10 days after U.S. President Barack
Obama announced his intention to try for a free-trade agreement
with the European Union, something sought by EU leaders in
search of economic growth.
The two sides plan to begin negotiating in June, with
automotive fuel standards one of many issues up for discussion.
European demand for bioethanol has also been buoyed by
official targets made to wean the bloc off fossil fuels and
fight climate change. EU tariffs will apply to imports of U.S.
bioethanol from August last year, when the EU began registering
incoming fuel in preparation for possible duties.
EU bioethanol industry association ePURE, whose members
produce 80 percent of Europe's bioethanol, complained to the
Commission that tax credits in the United States allowed its
exporters to cut their EU selling price by about 40 percent.
The group said that low prices helped grow U.S. imports to
the EU, with levels 13 times higher in 2011 than in 2009, at
roughly 1.2 billion litres.
"This decision represents a legitimate recognition of damage
suffered by the European ethanol industry," ePURE head Rob
Vierhout said of the ruling.
But the country-wide nature of the new duties is unusual,
Brussels-based trade lawyers say.
The European Commission, the EU executive, usually imposes
different anti-dumping duties on different producers, based on
how greatly they are deemed to undercut the EU market with their
pricing, a so-called injury margin.
In the EU's journal, the European Council, which represents
the bloc's member states, said it needed to base its data on
traders not producers, because bioethanol producers did not know
whether their fuel would be shipped to the EU.
Since it was not possible to trace purchases from traders to
individual producers, the Commission said, it decided to
recommend country-wide duties.
($1 = 0.7563 euros)
(Reporting by Ethan Bilby; editing by Andrew Roche)