WASHINGTON, Aug. 22, 2017 – Subsidies provided for biodiesel production in Argentina and Indonesia run afoul of international trade rules, the U.S. Commerce Department ruled Tuesday when it slapped a countervailing duty on imports from the two countries.
As a result, importers will have to pay cash deposits when bringing in biodiesel from the two countries; cash deposit rates range from 50.29 to 64.17 percent for Argentine biodiesel and 41.06 to 68.28 percent for product from Indonesia.
In a statement, Commerce Secretary Wilbur Ross said “even friendly nations must play by the rules.
“The subsidization of goods by foreign governments is something that the Trump administration takes very seriously, and we will continue to evaluate and verify the accuracy of this preliminary determination,” he said.
In addition to the countervailing duties, Commerce also found “critical circumstances” in the case of both countries. That will result in retroactive duties dating back 90 days from publication in the Federal Register. The National Biodiesel Board anticipates that will happen next week.
“The Commerce Department has recognized what this industry has known all along – that foreign biodiesel producers have benefited from massive subsidies that have severely injured U.S. biodiesel producers,” Doug Whitehead, NBB's chief operating officer, said in a statement. “We’re grateful that the Commerce Department has taken preliminary steps that will allow our industry to compete on a level playing field.”
NBB’s Fair Trade Commission filed petitions to address the imports from the two countries. According to NBB, imports from Argentina and Indonesia increased 464 percent from 2014 to 2016 and another 144.5 percent after NBB filed the petitions.
“These surging, low-priced imports prevented producers from earning adequate returns on their substantial investments and caused U.S. producers to pull back on further investments to serve a growing market,” the group said in a release.
According to the Energy Information Administration, almost 16.5 million barrels – or about 693 million gallons – of biomass-based diesel was imported into the U.S. in 2016. Of that amount, Argentina was the largest contributor, accounting for about 64 percent – 10.57 million barrels. Indonesia was the second largest individual contributor with 2.42 million barrels. The Commerce Department estimated the value of 2016 imports from the two countries at about $1.47 billion.
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