April 11, 2013 / 2:21 PM / in 6 years

EU to track more Argentine, Indonesian biodiesel imports

* Argentina, Indonesia account for most EU biodiesel imports

* EU also investigating anti-dumping in separate case

By Ethan Bilby

BRUSSELS, April 11 (Reuters) - The European Union will register more imports of biodiesel from Argentina and Indonesia from Friday, making it more likely that the bloc will place duties on the two countries in the coming months.

Those countries represent 90 percent of EU biodiesel imports and face retroactive duties from Thursday if an investigation finds the countries have benefited from illegal subsidies.

In an official publication, the European Commission said it had enough evidence that producer subsidies were “causing material injury to the (European) Union industry, which is difficult to repair”.

The European Union is already registering biodiesel from some companies in the two countries as part of a separate case on alleged price dumping - deliberately selling products for less abroad than at home, or for less than they cost to make.

For Argentina, the world’s No. 1 biodiesel exporter, EU regulators said taxes placed on exports of raw materials like soy bean oil used to make biodiesel, but not on the finished product, made it uneconomical to buy the fuel from European Union refiners.

A similar raw material export tax exists in Indonesia, which the Commission said undercuts European refiners.

“This approach effectively obliges the producers of the raw material to sell on the domestic market, thus depressing prices and artificially reducing the costs of the biodiesel producers,” the Commission said.

Argentina and Indonesia maintain their measures are consistent with World Trade Organization rules.

From very low levels in 2008, EU biodiesel imports from the two countries rose progressively to around 2.5 million tonnes in 2011, according to estimates from Eurostat and producer group the European Biodiesel Board (EBB).

The EBB brought the complaint that launched the investigation. It has said that, to level the playing field, the European Union would need to impose duties of between 28.5 and 29.5 percent for Argentina, and between 35.5 and 37.5 percent for Indonesia.

This week, the Commission proposed new rules that would allow it to impose much higher duties on states found to be distorting the market by restricting access to their raw materials.

Trade tensions with the European Union and also the United States led Argentina at the end of 2012 to ask the World Trade Organization to investigate its claims that both powers had broken WTO rules by curbing imports of its lemons, beef and biodiesel.

Indonesia’s government has questioned the EU’s allegation of biodiesel price dumping. (Editing by Barbara Lewis and Tom Pfeiffer)

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