Argentine Biodiesel Industry Says U.S. Duties Will Halt Exports

August 23, 2017

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by Michael Hirtzer (Reuters) Argentine biodiesel exports will be priced out of the U.S. market, its leading industry body said, after Washington decided on Tuesday to impose steep duties on imports that it said were unfairly subsidized.

The countervailing duties on soy-based Argentina biodiesel could be as much as 64.17 percent, according to a statement from the U.S. Commerce Department. Duties of up to 68.28 percent will be imposed on palm oil biodiesel imports from Indonesia.

"Any duty of more than 15 percent leaves Argentine biodiesel out of the market," an Argentine biofuels industry source said.

Argentina accounts for two-thirds of U.S. biodiesel imports, which totaled 916 million gallons (3.5 billion liters) in 2016, according to U.S. government data. Total U.S. biodiesel consumption is about 2 billion gallons.

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NBB, whose members include Archer Daniels Midland Co, said any supplies lost due to a halt in imports could be made up by increased production in the United States, where total capacity is more than 4 billion gallons.

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Indonesia exported 420,000 kiloliters of biodiesel to the United States in 2016, according to data from the country's biodiesel producers association, jumped from 270,000 kiloliters a year ago. READ MORE

U.S. duties to halt Argentine biodiesel exports: industry (Reuters)

Largest US biodiesel producer responds to trade ruling (Biodiesel Magazine)

US slaps Argentine, Indonesian biodiesel producers with huge anti-dumping penalties (Biofuels Digest)

U.S. soyoil, fuel credits jump on duties for Argentina biodiesel imports (Reuters)

Argentina bets on European biodiesel market after U.S. imposes duties (Reuters)

Southeast Asia biodiesel may firm but US duties cloud outlook (ICIS News)

Argentina bets on European market (Global Times)

European Union — Anti-Dumping Measures on Biodiesel from Argentina (World Trade Organization)

U.S., Argentina to 'work together' on biodiesel tariffs: U.S. embassy (Reuters)

Potential biodiesel Europe-US trade flow if antidumping continues: sources (Platts)

ARGENTINA: Europe Will Resume Argentinean Biodiesel Imports (RTT News/Markets Insider)

UPDATE 3-EU to reopen biodiesel market to Argentine exporters (Reuters)

EUROPEAN VEGOILS-Rapeoil sold on Argentine biodiesel decision (Reuters)

Excerpt from Biofuels Digest: The Digest’s Take: Who wins?

Clearly, a massive win for US biodiesel producers. The ruling will effectively shut down the import trade from Argentina and Indonesia which will clear the way for US production to fill the gap. We can expect biodiesel prices to rise, but it is not going to be clear for some time the impact on overall diesel prices — and given that biodiesel represents less than 4 percent of overall US diesel usage and less than 8 percent of on-road diesel usage, it could be that the price impact is relatively dilute for truckers and other diesel customers.

Clearly, a big hit for global trade and for a range of Argentine producers, who have yet to unlock themselves from a similar tangle in the EU and face the prospect of limited markets from biodiesel until the EU re-opens to them, no later than mid-2018. Since Indonesia has not exported biodiesel to the US this year, the impact would have a negligible effect on trade volumes but can be expected to negatively impact trade prices.

It’s also a timely win for the National Biodiesel Board and its membership, who have been on a hard-luck streak of late on RVOs and producer tax credits, and now have a solid win to celebrate that will help to boost domestic production.

For greenhouse gas emissions, the result will be fairly muted, as most of the imports were based on soy biodiesel but most of the resulting increase in domestic US production will be picked up using soybeans as a feedstock — any increase in waste-based or corn oil-based production will result in a welcome, if minor, dip in overall emissions.

Energy security hawks. But for two of the other pillars that sustain the coalition behind renewable fuels — domestic energy security and economic development opportunities — stakeholders will find reasons to cheer the ruling. Clearly, supporters of renewable fuels who label themselves as energy security hawks place a huge premium on domestic production and will cheer the ruling.

US economic development supporters. And those communities that generate support for renewables because of the impact on jobs and crop demand will also see the prospect of substantial benefits. State governors in the Midwest may also breathe a sign of relief that the ruling could put upward pressure on land prices, which have been in free-fall in the farm states — and that means good news for the tax base in many rural states, to the extent that they depend on property taxes to fund state government.

Don’t Dump Under Trump? Could this be a sign of the Trump Administration’s economic nationalism and focus on fair trade vs free trade? We think so, since the ruling issued from the Trump Administration via the Commerce Department — the test for the new Administration is the extent to which they studied the WTO rulings on the European Union’s anti-dumping tariffs. The WTO will be as vigilant on rampant protectionism as the US Commerce Department has been on what it found to be rampant dumping. READ MORE