World Grain - October 2008 - 56

BIOFUELS QUARTERLY: E.U. BIODIESEL INDUSTRY FEELS STING OF SUBSIDIES

able to confirm dumping and subsidy
practices are hurting domestic producers
here," Kriegsheim said. "They are currently conducting intensive research and
will issue a report within the first quarter
of 2009."
It is alleged that the volumes and the
prices of the imported biodiesel, among
other consequences, had a negative im-

pact on the market share held and the
level of prices charged by European
producers. This resulted in "substantial
adverse effects on the overall performance and the financial situation of the
community industry," according to the
report from the European Commission
filed on June 13.
Against this background, it will be

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"Biodiesel exported from the
United States to Europe is eligible for subsidies instituted
by the E.U., whereas European
producers are not eligible
for benefits if they choose to
market their fuel outside of
Europe."

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means cheap biodiesel made in South
America or Southeast Asia also receives
the subsidy and can undercut their ability
compete for export markets. The splashand-dash loophole allows biodiesel produced abroad and shipped to the U.S.,
where it is blended with a splash of regular diesel, to receive U.S. tax credits. The
fuel is then shipped to Europe, where it is
sold below market rates.

WORLDWIDE SOLUTION - ENGINEERING
IN BULK HANDLING

ILL

- Amandine Alourt, European
Biodiesel Board
"It's the 'holy drop' of mineral diesel
that makes almost the entire volume of
a foreign biodiesel shipment eligible for
the tax credit," Fox said. "I am confident
that Congress is going to close this loophole in the near future."
Kriegsheim believes there is an essential difference between the splash-anddash shipments and fuel originating from
U.S. producers themselves.
The EBB, however, has a more rigid
position. It said a fair trade scenario will
only occur when the U.S. eliminates the
subsidization of all biodiesel exported off
its shores and only financially supports
biofuel consumed domestically.
"Biodiesel exported from the United
States to Europe is eligible for subsidies
instituted by the E.U., whereas European
producers are not eligible for benefits if
they choose to market their fuel outside
of Europe," Alourt said.
The European Commission announced
in June that it had begun an official investigation into the "dumping" and "subsidization schemes" it says are practiced
by the U.S.
"The European Commission has been

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World Grain - October 2008

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