Commerce Department Supports Domestic Industry and Proposes Duties on Biodiesel Imports

The Department of Commerce (Commerce) on Aug. 22 made a preliminary determination regarding biodiesel imports from Argentina and Indonesia, finding that Argentina and Indonesia unfairly subsidize their production of biodiesel.  As a result, biodiesel importers will be required to pay cash deposits to the U.S. government on biodiesel imports from Argentina and Indonesia until a final ruling on duty rates is made. A final ruling is expected later this year or in early 2018, with a final determination by the International Trade Commission after that.

NATSO is very concerned by Commerce’s preliminary decision regarding biodiesel imports, which will not only impede access to cleaner burning biodiesel produced abroad but also will disrupt the Renewable Fuel Standard (RFS), threatening our ability to satisfy advanced biofuel mandates established by EPA every year. In addition, the duties levied on biodiesel imports from Argentina and Indonesia will likely generate a surge in domestic biodiesel prices, which will, in turn, result in higher retail prices for diesel fuel. When this happens, it will cost more to ship products across the country, which will result in higher prices for consumer goods moved by truck. 

NATSO joined the Advanced Biofuels Association in expressing concern about the initial finding. In a joint statement, NATSO Vice President of Government Affairs David Fialkov said, "Any outcome that results in cutting off Americans' access to cleaner burning fuels, such as biodiesel, from foreign markets is a bad day for the United States." 

Fialkov said it will raise fuel prices in the U.S. If American businesses can no longer import biodiesel from Argentina as product will likely flow to Europe or into vegetable oil markets. Cutting off supply in this manner will cause a surge in domestic biodiesel prices, he said, which will in turn result in higher retail prices for diesel fuel. 

Cutting off foreign supplies of biodiesel and renewable diesel also would substantially disrupt the Renewable Fuel Standard, threatening the industry's ability to satisfy advanced biofuel mandates established by EPA every year.

"This is exactly the wrong time to undercut a program that has largely been successful," Fialkov said.

The countervailing duty case, which was brought by the National Biodiesel Board and 15 domestic biodiesel producers, petitioned Commerce for relief from market distortions from subsidized imports. Later this year, Commerce also will make a preliminary determination regarding whether Argentinian and Indonesian biodiesel is being dumped in the United States at below fair-market value.

Preliminary duty rates range from  50.29 percent to 64.17 percent for biodiesel imports from Argentina and 41.06 percent to 68.28 percent for biodiesel imports from Indonesia. Once the preliminary determination is officially published in the Federal Register, which could be as early as Aug. 24, importers of Argentinian and Indonesian biodiesel will be required to pay the cash deposits. Commerce also found “critical circumstances” with regard to Argentinian imports from LDC Argentina and Vicentin, which means that the rates for imports from those two companies will apply retroactively 90 days from the date the notice is published in Federal Register.  

Commerce will use the time until the final determinations are made to audit the foreign producers and governments to verify the accuracy of their data submissions. Meanwhile, the parties will file briefs responding to Commerce’s preliminary countervailing duty determinations. In addition, upon request from “interested parties” – which include U.S. importers, domestic biodiesel producers, trade unions, foreign biodiesel producers, foreign exporters, and foreign governments – Commerce will hold a hearing on the matter.