European Commission Launches Investigation Into Biodiesel Imports.

In May's edition of this bulletin, HFW reported on the request by the European Biodiesel Board (E.B.B.) to the European Commission to initiate trade remedy action against biodiesel imports from the U.S.A. on the grounds that they are subsidised and dumped. The complaint was specifically directed at the "B99.9" blend. The E.B.B. claimed that U.S. imports have "progressively disrupted the margins of European biodiesel producers, putting most of them out of business".

On 13 June 2008 the European Commission announced that it had considered the E.B.B.'s complaints and had found sufficient evidence to begin an official investigation into the allegation of subsidisation and dumping.

During its investigation the Commission will send questionnaires to U.S. exporters and E.U. importers of biodiesel to elicit market information relating to prices, quantities and companies' performance. The Commission will also seek the views of European consumers and users of U.S. biodiesel on whether future restrictions, such as anti-dumping or anti-subsidy duties on U.S. imports, would be in the "Community interest".

If the E.B.B.'s complaints are upheld, the Commission may impose anti-dumping and anti-subsidy duties which could significantly market conditions. Provisional duties may be imposed two to nine months after the initiation of the investigation, and definitive duties may be imposed at the end of the investigation.

The investigation also has political implications. It could lead to tensions between the E.U. and U.S.A. U.S. companies will bear the brunt of any punitive duties, and the E.B.B.'s complaint, and therefore the Commission's investigation, is directed at existing U.S. federal legislation. The potential consequences for E.U./U.S. trade go beyond the biofuels sector.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Mr Dan Horovitz

Holman Fenwick Willan

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