Dumpers! NBB files suit against Argentine, Indonesian biodiesel producers: “flooding the U.S. market”

In Missouri, the National Biodiesel Board filed an antidumping and countervailing duty petition, making the case that Argentine and Indonesian companies are violating trade laws by flooding the U.S. market with dumped and subsidized biodiesel. The petition was filed with the U.S. Department of Commerce and the U.S. International Trade Commission on behalf of the National Biodiesel Board Fair Trade Coalition, which is made up of the National Biodiesel Board and U.S. biodiesel producers.

NBB says that “Argentine and Indonesian producers are dumping their biodiesel in the United States by selling at prices that are substantially below their costs of production. This is reflected in the petition’s alleged dumping margins of 23.3 percent for Argentina and 34.0 percent for Indonesia. The petition also alleges illegal subsidies based on numerous government programs in those countries.”

The dumping backstory

We reported yesterday in The Digest that EIA says biodiesel and biomass-based diesel imports jumped 65% last year to 916 million gallons thanks to support from the biodiesel blenders credit during much of the year. December imports passing 100 million gallons despite the biodiesel blenders credit already having expired. Of the total, 64% of imports came from Argentina while the remainder originated in Indonesia and Canada. Singapore was the leading origin for renewable diesel imports that rose 9% on the year to 223 million gallons.

Last October, we reported that Peruvian regulators slapped anti-dumping duties on imports of Argentine biodiesel for five years, saying the imports had a negative impact on domestic producers.

Last year, we reported that the General Court of the European Union has overturned the European Commission’s antidumping duties against Argentine and Indonesian biodiesel. The EU had imposed five-year, 41.9 to 49.2 percent duties on Argentina and 8.8 to 23.3 percent duties on Indonesia in 2013.  At the time, the Argentina Chamber of Biofuels says its industry could restart biodiesel shipments to Europe in the next few months on the heels of the ruling. Duties had cut the industry’s exports in half and inflicted major damage on biodiesel producers.

According to NBB, “because of illegal trade activities, biodiesel imports from Argentina and Indonesia surged by 464 percent from 2014 to 2016. That growth has taken 18.3 percentage points of market share from U.S. manufacturers.”

The shoe on the other foot

Back in 2015, we reported that the European Commission extended anti-dumping duties against US biodiesel producers, including ADM and Cargill, through 2020. The duties were brought in back in 2009 in retaliation for what Europe saw as unfair subsidies in the $1 per gallon producer credit. The EU felt that there was still a risk of harm to the domestic biodiesel industry if it lifted the anti-dumping duties so instead chose to renew them for another five years to 2020.

Reaction from NBB

“The National Biodiesel Board and U.S. biodiesel industry is committed to fair trade, and we support the right of producers and workers to compete on a level playing field,” said Donnell Rehagen, National Biodiesel Board CEO. “This is a simple case where companies in Argentina and Indonesia are getting advantages that cheat U.S. trade laws and are counter to fair competition.  NBB is involved because U.S. biodiesel production, which currently support more than 50,000 American jobs, is being put at risk by unfair market practices.”

“The resulting imbalance caused by unfair trade practices is suffocating U.S. biodiesel producers,” Rehagen explained. “Our goal is to create a level playing field to give markets, consumers and retailers access to the benefits of true and fair competition.”

Reaction from the Advanced Biofuels Association: “NBB is fleecing the diesel drivers of America”

Michael McAdams, president of the Advanced Biofuels Association, responded:

“Today, the National Biodiesel Board Fair Trade Coalition and its individual members filed petitions requesting the imposition of antidumping and countervailing duties on dumped and subsidized imports of biodiesel from Argentina and Indonesia. These allegations are simply not true. The members of the Advanced Biofuels Association vehemently oppose this action and expect these petitions’ rejections, similar to the EU’s recent rejections of NBB’s efforts conducted in Europe. With the future of advanced biofuels at stake, this is no time to be penny-wise and pound-foolish with alternative sources of this vital low-carbon fuel.

“Customers who chose to use internationally-sourced biodiesel for transportation fuels or heating oil are significantly impacted by this petition, particularly in the Northeast Corridor. This piggybacks on NBB’s efforts to change the existing blenders tax credit to a production credit. Both of these actions will have the effect of raising the cost of biodiesel to those selling the fuels to American drivers, while further lining the pockets of those who grow soybeans in the United States. These actions by a few large U.S. producers and U.S. soybean growers puts the entire Renewable Volume Obligations system at risk, as the current Renewable Fuel Standard program depends on security of supply from foreign markets to ensure the two billion gallon mandate can be achieved.

“We already have seen the prices of soybean feedstock and RINs for the biomass-based diesel pool rise in response to NBB’s efforts. This is the very effect these parties intended to achieve. However, this short-term gain threatens the viability of the entire RFS program. In filing this suit, NBB is fleecing the diesel drivers of America, not putting “America First.”

 In DC, Senator Maria Cantwell of Washington weighs in

We reported that  U.S. Senator Maria Cantwell is supporting the National Biodiesel Board’s complaint against Argentine and Indonesian biodiesel imports.

In the last Congress, Senator Cantwell, along with Senator Chuck Grassley, introduced bipartisan legislation to reform the biodiesel tax credit and extend the new policy for three years. The bill would convert the current biodiesel blenders credit to a domestic production credit, which would prohibit foreign produced biodiesel imports from taking advantage of the credit.

“We’ve known for a long time that foreign producers of biodiesel have been flooding our markets at the expense of American producers,” said Senator Cantwell, “knowing they can take advantage of our tax policy. Today’s suit confirms just how dire the situation has become. I hope that the Department of Commerce and ITC will give this suit every appropriate consideration and work to protect American biodiesel producers. I will continue to work across the aisle to reform the biodiesel tax credit so that it does what it was intended to do: incentivize the production of clean, renewable biodiesel here in the United States.”