Anti-dumping duties of 9.5 percent on U.S. biofuels have been recommended by the European Commission, the executive body of the European Union. Ethanol imports were found to negatively affect the EU bioethanol industry.
"Although the average US import prices increased by 6% over the period considered, prices charged by US exporters were consistently lower than the average Union producers' prices... This systematic price undercutting practiced by the US exporters explains the significant increase in market share they achieved over the period considered."
A sudden rise in cheap imports from the U.S. was faulted in the EC report. During the period of investigation from October 2010 through September 2011, U.S. ethanol imports shot from 1.9 percent to 15.7 percent EU market share. This resulted in difficulty raising capital and securing investors for EU biofuel companies.
If ratified by all 27 member states of the EU, the duty on all U.S. ethanol producers would take effect before February 22.
Europe, U.S. Responses
The recommendation was lauded by ePURE, a group that represents many European biofuel producers. A complaint lodged by ePURE sparked the initial "anti-dumping" investigation.
"As the plaintiff in this case, we very much welcome this decision by the EU institutions. It is a positive outcome for the EU industry because European ethanol producers have been unfairly undermined by the dumping of US ethanol on the EU market," said Mr. Rob Vierhout, Secretary General of ePURE.
A statement from Office of the United States Representative (USTR) spokesperson Nkenge Harmon expressed "disappointment" at the recommendation.
Likewise, representatives of the Renewable Fuels Association disputed the findings and protested the move:
"This proposal is legally vulnerable on numerous grounds," said Bob Dinneen, President of the Renewable Fuels Association. "They selected six producers for investigation and none were found to be dumping; nonetheless, duties are being imposed. In addition, all those producers not selected for review are also being penalized, again with no dumping having been found."
U.S. ethanol exports total over $930 million (700 million euros) per year.
Past Actions, Conflicts
The EC recommendation was not the first action against alternative fuel from America. The EU approved anti-dumping and anti-subsidy duties against U.S. biodiesel in 2009 because of $1-per-gallon tax credits from Congress that again gave U.S. imports a competitive edge.
Another EU investigation, regarding fuel subsidies, recently concluded in favor of U.S. ethanol imports due to the fact that these were mostly being phased out. However, the EC reserved the possibility of revisiting the issue if a tax credit that expired in 2011 were brought back by America.
Biofuel has been touted in the U.S. as a clean alternative to oil that can provide a balance to foreign imports. However, the environmental benefits have been shown to be small at best. Furthermore, developing nations are affected by spikes in food prices caused by the biofuel trade. It is estimated that 40 percent of U.S. corn is converted into fuel.
