Argentina and Indonesia unfairly subsidize the production of biodiesel fuel, so the United States will levy countervailing duties as high as 68 percent on the imported fuel, which competes with U.S.-made biodiesel, said the Commerce Department in a preliminary ruling. “Even friendly nations must play by the rules,” said Commerce Secretary Wilbur Ross.
The duties, retroactive for 90 days, will be collected while the Commerce Department reaches a final decision, due by Nov. 7, on complaints from the U.S. biodiesel industry. If it concludes that the imports are unfairly subsidized and if the International Trade Commission, a U.S. agency, agrees, the duties will become permanent.
Nearly $1.5 billion worth of biodiesel was imported from the two nations last year, more than double the 2016 total of $707 million. The bulk of the imports came from Argentina. The surge was so large that the EPA asked in July for public comments about whether the government should lower its mandate for the use of biodiesel in U.S. cars and trucks. After all, it said, Congress created the so-called Renewable Fuels Standard, which sets targets for the use of biofuels, to promote U.S. energy independence.
Biodiesel and other “advanced” biofuels are a comparatively small part of U.S. renewable fuels. Corn ethanol is the primary biofuel and would receive an EPA mandate of 15 billion gallons in 2018, compared with 4.24 billion gallons for second-generation advanced biofuels, including 2.1 billion gallons of biodiesel, which is made from feedstocks such as soybean oil, animal fats, and recycled cooking oil.
“The Commerce Department has recognized what this industry has known all along — that foreign biodiesel has benefited from massive subsidies that have severely injured U.S. biodiesel producers,” said the National Biodiesel Board, a trade group. The industry says imports took “18.3 percentage points of market share from U.S. manufacturers.” Besides the petitions for countervailing duties, the industry has filed antidumping complaints, with a preliminary ruling expected in October.
While the domestic industry cheered, the Advanced Biofuels Association and the National Association of Truck Stop Operators said the government decision will mean higher fuel prices. “Fuel provided from ocean-going trade is far cheaper for coastal communities than Midwest products transported via rail,” said the biofuel trade group, which said it will try to have the preliminary ruling reversed.
Countervailing duties imposed on Argentine biodiesel will range from 50.29 to 64.17 percent, depending on the producer. The duties on Indonesian biodiesel will range from 41.06 to 68.28 percent, depending on its source. Collections will begin when the Commerce Department determination is published in the Federal Register, probably next week.
To read a Commerce Department fact sheet on the decision, click here.