EU continues biodiesel duties, U.S. industry calls for tax incentives

EU continues biodiesel duties, U.S. industry calls for tax incentives

U.S. biodiesel industry says EU duties protect their market; asks Congress to update U.S. tax incentives

The European Commission on Tuesday issued a long-awaited decision on expired biodiesel trade duties, ultimately calling for their extension.

Related: NBB: Voters Would Support Biodiesel-friendly Policies

The duties, in place since 2009, have blocked U.S. biodiesel from entering the European market, the National Biodiesel Board says. The policy, in effect, has given European biodiesel producers an edge over their competition and a "lock on the European market," says NBB's Anne Steckel, vice president of federal affairs.

U.S. biodiesel industry says EU duties protect their market; asks Congress to update U.S. tax incentives (Photo by Sean Gallup/Getty Images)

Steckel said NBB will evaluate its options for fighting against the EU duties. She added that the decision highlights an ongoing issue of tax breaks in the U.S. affecting biodiesel.

"This decision highlights why the U.S. biodiesel tax incentive should be reformed and converted into a domestic production credit so that we have a level playing field," Steckel explained. "When the U.S. biodiesel tax incentive is in effect under the current structure, European biodiesel can be shipped to the United States only to be rewarded with a $1-per-gallon incentive, while at the same time U.S. biodiesel shipped to the EU is slapped with punitive duties.

"This is obviously unfair to American companies and workers," she said in a statement.

The punitive duties were first imposed by the European Commission on July 7, 2009, and were slated to expire last year. However, in July 2014, the European Biodiesel Board pushed to extend them for another five years, and the Commission has been conducting an "expiry review" for this purpose.

The EU has cited the $1-per-gallon biodiesel tax incentive in the U.S. as a reason to extend the duties, ignoring the fact that the biodiesel tax incentive is currently expired and that European biodiesel was eligible to receive the tax credit so long as it was blended in the U.S.

Related: Biodiesel industry says RFS uncertainty a reason for lower 2014 production

NBB challenged the duties in the review, citing European producers' ability to sell biodiesel in both Europe and the United States without duties or limitation. They also can freely participate in U.S. policies such as the Renewable Fuel Standard and, before it had expired, the U.S. biodiesel tax incentive.

NBB said U.S. imports of EU biodiesel have grown in recent years, while EU imports of U.S. biodiesel have been virtually eliminated since the EU duties were imposed.

Source: NBB

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