Europe struggles to stem biodiesel import flood

Sybille de La Hamaide Reuters 8 Mar 18;

PARIS (Reuters) - Rising biodiesel imports from Argentina and an expected surge in shipments from Indonesia threaten to cripple output in the European Union, the world’s top producer of the renewable fuel.

An employee checks a bottle of Ester at the factory of Avril Group subsidiary Saipol, where biodiesel under the Diester brand and vegetable glycerin used for numerous industrial applications are manufactured, in Bassens, near Bordeaux, France February 13, 2018. REUTERS/Regis Duvignau
The European Union slashed import duties on Argentine biodiesel last September after Buenos Aires mounted a successful challenge at the World Trade Organisation, weeks after the United States imposed steep duties on the fuel.

The bloc is now considering whether to cut duties on Indonesian biodiesel.

Argentine soybean-based fuel is now entering the EU at much lower prices than rapeseed oil, the main material used by European producers, who say they cannot compete and in some cases are being pushed to the verge of bankruptcy.

Between August last year and January, 852,000 tonnes of biodiesel - around four times the capacity of a large EU plant - worth $617 million, were exported from Argentina to the bloc, customs data showed. Earlier in 2017, nearly all exports were heading to the United States.

Raffaello Garofalo, head of the European Biodiesel Board (EBB), said the impact of Argentine imports was already worse than expected.

“There is huge economic damage and we risk seeing many European renewable fuel producers close down in the face of these unfair import floods,” he said.

The EU is the world’s largest producer and consumer of biodiesel, a fuel made mostly from vegetable oils, which is renewable and aimed at reducing carbon emissions.

EU production of biodiesel was 11.9 million tonnes in 2017, up from 11.7 million a year earlier. But consultancy Strategie Grains, which initially said output would be stable this year, has cut its 2018 estimate to 11.6 million tonnes because of the Argentine imports.

Imports of Argentine biodiesel into the EU could hit 1.5 million tonnes in 2018, with a similar volume from Indonesia if the EU cuts its duties, Strategie Grains said.

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