HAMBURG (Reuters) - The European Union’s removal of duties on low-price biodiesel from Argentina and Indonesia could mean a surge in EU imports forcing European producers to cut production in coming months, the head of a major German biodiesel producer said on Friday.
“I fear the decisions to remove the anti-dumping duties will result in a flood of unfairly priced biodiesel from Argentina and Indonesia in the EU starting in April,” said Claus Sauter, chief executive of German biofuels producer Verbio AG.
“I expect that some EU biodiesel producers, especially small-sized companies, will have to reduce production or even close.”
The EU has removed duties on biodiesel imports for 13 Argentine and Indonesian producers following the end of legal proceedings at the European Court of Justice.
The bloc set anti-dumping duties on imports of the renewable fuel from the two countries in 2013, but faced a series of legal challenges at the European Court of Justice and the World Trade Organization. Both bodies ruled against the EU measures.
U.S. agribusiness group Archer Daniels Midland Co said on Friday it would suspend production at a biodiesel plant in Germany because of increasing imports of cheap biodiesel into the EU.
“Various unfair export taxes and other state support mean Argentine and Indonesian biodiesel can be sold in Europe at $50 to $60 a tonne cheaper than EU biodiesel producers can buy raw materials such as rapeseed oil,” Sauter said.
“This is before even EU production costs are calculated.”
The EU’s biodiesel market is about 12 million tonnes a year, mostly for blending with fossil diesel to achieve EU environmental protection targets.
“I expect about 3 million to 5 million tonnes will be imported in 2018 and afterwards,” Sauter said. “As EU biodiesel is mainly produced from rapeseed oil, European farmers will lose a huge market for their rapeseed.”
Argentine biodiesel from soyoil and Indonesian from palm oil is unsuitable for winter use and would be sold only for use for the low-frost period starting in April.
“I estimate that several hundred thousand tonnes have already been imported into customs bonded stores waiting for the start of the April change,” Sauter said.
He called for rapid EU action to reimpose anti-dumping duties.
“I am confident Verbio, as a large-scale producer, will survive, but other EU biodiesel producers may not survive this year,” he said.
Reporting by Michael Hogan; Editing by Dale Hudson