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Argentina / EU / Indonesia / United States: EU Applies Anti-Dumping Duties to Biodiesel from Argentina, Indonesia
Dec 06, 2013
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Starting Nov. 27, 2013, the EU is applying a definitive anti-dumping duty on biodiesel imports from Argentina and Indonesia. This analysis summarizes the EU’s anti-dumping actions and the two countries’ reactions, and reflects on future biodiesel imports into the EU.

EU Anti-dumping Duties against Argentina and Indonesia

On July 3, 2013, Hart Energy Research & Consulting reported that the EU started applying provisional anti-dumping duties on biodiesel imports from Argentina and Indonesia beginning on  May 29, 2013, following the European Commission (EC) investigation started on April 11, 2013. In November 2013, the EC finalized the investigation; the EU voted in favor of introducing definitive anti-dumping duties against biodiesel imports from Argentina and Indonesia from Nov. 27, 2013, until Nov. 27, 2018, according to Regulation No.1194/2013 of the Council of the EU. Table 1 presents companies that fall within the scope of the regulation and duties that they have to pay.

Table 1: EU Definitive Anti-dumping Duties on Biodiesel from Argentina and Indonesia



Duty (€/ton)


Aceitera General Deheza S.A., General Deheza, Rosario; Bunge Argentina S.A., Buenos Aires


Louis Dreyfus Commodities S.A., Buenos Aires


Molinos Río de la Plata S.A., Buenos Aires; Oleaginosa Moreno Hermanos S.A.F.I.C.I. y A., Bahia Blanca; Vicentin S.A.I.C., Avellaneda


Other cooperating companies:

Cargill S.A.C.I., Buenos Aires; Unitec Bio S.A., Buenos Aires; Viluco S.A., Tucuman


All other companies



PT Ciliandra Perkasa, Jakarta


PT Musim Mas, Medan


PT Pelita Agung Agrindustri, Medan


PT Wilmar Bioenergi Indonesia, Medan; PT Wilmar Nabati Indonesia, Medan


Other cooperating companies: PT Cermerlang Energi Perkasa, Jakarta


All other companies



Source: Hart Energy Research & Consulting, EU Regulation No.1194/2013


In the July 3, 2013, Flash Report, Hart Energy Research & Consulting presented background information that the EC used to determine provisional anti-dumping duties. However, during the final stage of the investigation, the EC updated the information on the EU biodiesel industry to exclude idle plants. Therefore, the EU capacity utilization rate is lower than in the EC’s previous report, as indicated in Table 2.


Table 2: EU Biodiesel Market and Trade with Argentina and Indonesia (tons)






EU biodiesel production




EU biodiesel imports from Argentina





EU biodiesel imports from Indonesia





EU production capacity




EU production volume




EU capacity utilization





Source: Hart Energy Research & Consulting, EU Regulation No.1194/2013, Eurostat, 2013


Figure 1 indicates that Argentina and Indonesia kept exporting high biodiesel volumes to the EU until August 2012. After the EU started the investigation, these imports shrunk. In the first half of 2013, Argentina’s imports decreased by 35% compared to the first half of 2012; Indonesia’s imports decreased by 8%.

Figure 1: EU Biodiesel Imports from Argentina and Indonesia (tons)

Figure 1

Source: Hart Energy Research & Consulting, Eurostat, 2013

Differentiated Export Tax

The EC investigation established that the differentiated export tax (DET) applied in Indonesia and Argentina from 2010 to 2012 artificially depressed feedstock prices (soybeans, soybean oil, palm oil) in Argentina and Indonesia. This gave an option to biodiesel exporters from these countries to offer biodiesel on the EU market at a lower price than the EU-produced biodiesel.

Currently, the DET has not been agreed under the World Trade Organization (WTO) rules since member states could not reach an agreement on its definition at the time export barriers were discussed in 2004. According to the WTO, DET is:

  • An export subsidy, to facilitate export of manufactured goods instead of raw material; or
  • An export restriction, which should be eliminated.

However, the WTO regulation dealing with export restrictions is relatively limited, offering ample “policy space” for domestic policy measures. General Agreement on Tariffs and Trade (GATT) XI requires members to eliminate all prohibitions and quantitative restrictions on exports with the exception of those imposed “temporarily” to prevent and alleviate food shortages and those intended to allow time for the application of regulations such as classification and grading. Yet, it does not restrict members from imposing duties, taxes or other charges on exports.

Where Will the EU Get Biodiesel?

According to Hart Energy Research & Consulting’s Global Biofuels Outlook 2013, the EU biodiesel demand will continue to rise based on increasing diesel consumption, but supply will rely on imports. Anti-dumping duties on biodiesel imports from Indonesia and Argentina will eventually stop these flows from to-date major exporters of biodiesel to the EU, as Figure 2 and Figure 3 show.

Biodiesel from the U.S.

Until 2010, the U.S. and Canada were important biodiesel exporters to the EU; however, the EU cut their imports by imposing anti-dumping and anti-subsidy duties in mid-2009. These duties are going to expire in July 2014 and this is when the U.S. biodiesel could come back to the EU market.

Hart Energy Research & Consulting forecast that the U.S. $1/gallon tax credit subsidy for biodiesel will not be renewed for 2014, therefore U.S. biodiesel could not be considered subsidized. As a result, Hart Energy Research & Consulting does not expect a new anti-subsidy investigation from the EC. If the U.S. starts exporting to the EU in excessive volumes, the EU biodiesel industry may ask the EC to investigate the further U.S. biodiesel dumping possibilities on the EU market. There is a possibility that the EU will accept a request for an investigation into alleged U.S. biodiesel dumping on the EU market. In the last case, the EU will continue applying the anti-dumping duty for another year – until July 2015. The results of the EU investigation then will show if the EU should continue applying the anti-dumping duty on U.S. biodiesel imports in the years after 2015.

If the U.S. subsidy does expire and the EU tariff is not continued, the U.S. has proven biodiesel production capacity that could supply the EU market. The current proposed 2014 U.S. biofuels mandate for the U.S. could reduce 2014 U.S. biodiesel demand 570 million liters below production at the current 2013 rate, providing a significant source of “distressed” volume in search of a home abroad (see Special Report, Nov. 26, 2013).

Operating U.S. biodiesel capacity is approximately 2.4 billion liters above the 2014 proposed mandate, which represents the upper range of potential export capacity. Even with freed capacity and some feedstock advantages, the price of imported U.S. biodiesel (without the subsidy) is not traditionally competitive with biodiesel produced in the EU. In addition, the 2014 U.S. mandate proposal will be highly debated before it is finalized.

Hart Energy Research & Consulting forecasts that a likely scenario that upwardly modifies the 2014 proposed biofuels requirements might absorb most of the U.S. biodiesel production capacity. The continued importing of U.S. waste oils and fats as a feedstock for EU biodiesel production is more certain than the prospects for importing finished U.S. biodiesel.


Figure 2: EU Biodiesel Imports 2009-2012 (tons)

Figure 2

Source: Hart Energy Research & Consulting, Eurostat, 2013


Malaysia, India, South Korea

Figure 3 indicates major biodiesel importers into the EU (Norway, Malaysia, South Korea and India) in the first half of 2013, when biodiesel imports from Argentina and Indonesia were falling because of the EU investigation. The volumes of imports from these countries are much lower compared to Argentina and Indonesia.  Considering that Norway has one biodiesel (FAME) production plant of capacity 99,924 tons/year, it would not be able to increase its biodiesel exports to the EU.

Malaysia is planning to increase its national mandate from the current B5 to B10 in mid-2014 with the possibility of having B7 before B10; however, the current installed production capacity is more than sufficient to meet its domestic demand. Moreover, Malaysia could increase biodiesel exports considering that Indonesia’s biodiesel would not suppress Malaysian export possibilities until 2018.

In the meantime, it is unlikely that the price of imported biodiesel into the EU will stay at the 2013 level and thus competitive with the EU-produced biodiesel. One trigger of the price increase could be that the revised EU Generalized Scheme of Preferences comes into force in January 2014. It no longer gives zero import tariffs on biodiesel from Malaysia and India. Furthermore, Malaysian and other Asian biodiesel producers and exporters to the EU have to invest in ensuring palm oil biodiesel compliance with the EU sustainability criteria. Hart Energy Research & Consulting estimates that biodiesel exports from South Korea and India will stay rather modest because of lack of feedstock destined for biodiesel production.

Figure 3: EU Biodiesel Imports in the First Half of 2013 (tons)

Figure 3

Source: Eurostat, 2013

Argentina’s Reaction

In May 2013, Argentina filed a complaint against the EU in the World Trade Organization (WTO) Secretariat related to measures implemented by the EU to promote the use of energy from renewable sources and to introduce a mechanism to control and reduce greenhouse gas (GHG) emissions and measures to establish support schemes for the biodiesel sector. This dispute is still in consultations at the WTO. After the EU imposed punitive duties on imports of biodiesel from Argentina for the next five years, the Argentine government is allegedly preparing to take the EU to the WTO again to challenge these duties. Argentina’s biodiesel producers, organized under the Biodiesel Producers Association (Carbio), are also considering complaining to the European Court of Justice.

Argentina has a parallel conflict with Spain after the European country excluded Argentine biodiesel producers from a list of exporting companies receiving production quotas to sell biodiesel in Spain, published October 2013. The Argentine government is planning to take legal action against Spain, although it also realizes that even if Spain allows for imports, these would not be possible because of the punitive duties established by the EU.

The other legal problem between the two countries (the yearlong Repsol-YPF dispute) is about to end as the countries have reached an agreement where YPF will compensate Repsol for its nationalization. This accord should help normalize trade relations between both countries after Spain drastically decreased biodiesel imports from Argentina as a consequence of the YPF nationalization; even so, Argentina does not expect this agreement to unblock biodiesel exports because of the anti-dumping duties imposed at the EU level.

Since the biodiesel market in Argentina is mainly directed toward exports, the government has two options for the disposal of biodiesel: the increase of the domestic biodiesel blend mandate and the search for other exporting markets. After having increased the blend mandate to 8 vol% in June 2013, it’s likely that the government will move forward and increase it up to B10 in the short term, although there is not yet a proposal in place. However, this will not be enough to cover all biodiesel production in Argentina. Other markets such as the U.S. are increasing their biodiesel imports from Argentina — although the biodiesel does not remain in the U.S. but is exported to Africa and Asia.

Indonesia’s Reaction

On July 27, 2012, Indonesia submitted a complaint to the WTO which claimed that the EU investigation and measures are not consistent with the WTO rules. On May 1, 2013, the WTO established a panel and appellate body to review this complaint.

Following the EU’s decision to implement a provisional anti-dumping duty starting from May 2013, the palm oil industry, including biodiesel producers, approached the government for assistance.

In July–August 2013, the government faced several problems including an increase in current account deficit (CAD), depreciation of the Indonesian rupiah against the U.S. dollar, increase of petroleum products import budget and high surplus of CPO inventory. Considering those issues, on Aug. 29, 2013, the government released a new biofuels rule increasing the blending mandate from 2.5% to 10% of the total volume of subsidized diesel demand in the country, effective Sept. 1, 2013. In the long term, the mandate will increase in stages reaching 25% of the total volume of diesel (subsidized and non-subsidized) demand in January 2025 (see Flash Report, Sept. 4, 2013).

With this mandate, the government aims to consume 1.3 billion liters (3.44 million gallons) of biodiesel in 2013 and 4.4 billion liters (1.16 billion gallons) in 2014. However, the national oil company Pertamina announced that it would not be able to blend 4.4 billion liters in 2014 because of lack of a blending facility. Thus it set a different target to blend 3.3 billion liters of biodiesel each in 2014 and 2015 instead. At the same time, Pertamina plans to build the necessary infrastructure including a blending facility to comply with the mandate from 2016 onward.

Current installed biodiesel production capacity in Indonesia is around 4.9 billion liters (1.30 billion gallons). An 80% utilization rate will leave about 600 million liters (158.7 million gallons) of biodiesel for export. Although the current export volume to the EU is very low if not nonexistent, the country still exports biodiesel to Asian countries such as China and South Korea.

Summary and Outlook

The EU’s anti-dumping measures against Argentina’s and Indonesia’s biodiesel imports cut off the major biodiesel exporters to the EU that had heavily relied on these imports because of lower price. Considering the EU anti-dumping measures and the alternative biodiesel exporting countries, Hart Energy Research & Consulting assumes that Malaysian and U.S. biodiesel producers having sufficient production capacity could increase biodiesel exports to the EU. However, these biodiesel exports will not be significant as they are challenged by several factors:

  • The EU could extend the anti-dumping duties on U.S. biodiesel imports;
  • The final U.S. mandate for 2014 could be revised upward;
  • The EU sustainability criteria (e.g., GHG emission reduction thresholds) for palm and soy-based biodiesel from the U.S. and Malaysia; and
  • Malaysia’s exclusion from the EU GSP scheme from January 2014.

Hart Energy Research & Consulting projects that the EU biofuel producers will not be able to meet the 2020 target for renewable energy in transportation (i.e., 10% share in the total fuel mix). Having this in mind, as well as the ongoing discussion on sustainability of biofuels and possible revisions of the biofuels policy, Hart Energy Research & Consulting expects that the EU will not continue a strategy with a separate target for biofuels in the 2030 framework.

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