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UPDATE 3-EU slaps duties on U.S. biodiesel imports - sources

(Adds comments from U.S. industry, U.S. trade official)

BRUSSELS, March 3 (Reuters) - The European Union moved to impose temporary duties on U.S. biodiesel imports on Tuesday, which follows months of complaints from European companies that they were being hammered by U.S. subsidies.

“It went through with no problem,” one source with knowledge of the decision told Reuters after a meeting of the EU’s anti-dumping committee of 27 national trade diplomats.

The move is the latest in a series of spats dogging EU-U.S. relations, with Brussels and Washington at loggerheads over an EU ban on imports of U.S. chlorinated chicken and hormone-treated beef.

The EU firms accuse U.S. producers of being involved in a “splash and dash” scheme, whereby they import cheaper biodiesel from countries such as Brazil and add less than 5 percent of U.S. diesel. The producers then qualify for a subsidy from Washington before exporting it to Europe.

From March 13, U.S. firms exporting biodiesel into the EU will have to pay additional tariffs for an initial six months, ranging from 26 euros ($32.88) to 41 euros per 100 kg.

Of the big U.S. producers, Archer Daniels Midland ADM.N will face duties of 26 euros per 100 kg, Cargill [CARG.UL] 27 euros, Imperium Renewables 29 euros, Green Earth Energy Fuels 28 euros and World Energy Alternatives 29 euros.

Peter Cremer North America and most other U.S. biodiesel companies exporting to Europe will pay 41 euros per 100 kg.

ADM and Cargill declined comment on the new developments.

After six months, the executive European Commission must decide whether to propose definitive duties, which normally last five years. Definitive duties must be approved by EU governments to enter into force.

Brussels began a probe into biofuel imports last year after EU producers of biodiesel complained.

“If ... these duties will be imposed, then this proves our complaint was well founded,” Raffaello Garofalo, secretary general of the European Biodiesel Board, told Reuters.

“This will reestablish a level playing field and put an end to unacceptable and artificial prices created by U.S. biodiesel producers.”

MARKET RESTRUCTURING

Traders said they expected biodiesel prices in Europe to firm on the news.

“The industry will certainly start restructuring itself in the short term to medium term with one eye on the possibility that the duties could be imposed permanently,” a broker said.

Imports from the United States into Europe are larger than from any other country and increased from about 7,000 tonnes in 2005 to more than 1.5 million tonnes last year.

The U.S. government under then-president George W. Bush and U.S. biodiesel industry called the European complaint a “protectionist ploy”.

One U.S. trade official, who declined to be named, said the United States was waiting to see the European Commission’s official decision on the duties next week.

“We don’t, at this point, want to express any views on expectations as to the outcome,” the official said.

The temporary duties will make it hard for U.S. biodiesel to compete in the European market, said Manning Feraci, a vice-president with the U.S. National Biodiesel Board.

But for the duties to stick, the Commission will need to find that U.S. imports have harmed producers, Feraci said.

“This simply is not the case,” Feraci said, noting some European producers are doing well, while others have been hurt by factors unrelated to U.S. imports, he said.

EU producers are particularly unhappy with subsidies for so-called B99 -- biodiesel with small amounts of mineral diesel -- that they said were distorting global trade rules. (Reporting by Darren Ennis, Roberta Rampton, Christine Stebbins and Karl Plume; Editing by Russell Blinch and Marguerita Choy)

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