BRUSSELS - The European Union imposed a five- year tariff on U.S. bioethanol to curb competition for German, French, British and other EU producers, threatening to raise trans-Atlantic trade tensions over renewable energy for autos.
The duty of 62.30 euros ($83.20) a metric ton punishes U.S. exporters of bioethanol including Poet LLC for allegedly selling it in the EU below cost, a practice known as dumping. The levy follows existing EU anti-dumping duties on imports from the U.S. of biodiesel, another renewable-energy source for vehicles.
European bioethanol manufacturers including Crop Energies Bioethanol GmbH of Germany, Tereos BENP of France and Ensus of the U.K. suffered “material injury” as a result of dumped imports from the U.S., the 27-nation EU said in a decision today in Brussels. The levy, which applies only to U.S. bioethanol used for fuel, will take effect after publication in the bloc’s Official Journal by Feb. 25.
The duty, which is the outcome of a dumping probe opened in November 2011 after a complaint by European manufacturers, highlights some of the challenges the EU and the U.S. face as they prepare for negotiations on a free-trade agreement. Last week, leaders on both sides pledged to pursue an accord that would expand what is already the largest bilateral commercial relationship in the world.
Agriculture threatens to be a sticking point in the planned trans-Atlantic trade talks. Ethanol is a form of alcohol distilled from grain or sugar that boosts the oxygen content of fuel so it burns more thoroughly, reducing tailpipe emissions.
U.S. ethanol producers that also include Marquis Energy LLC, Patriot Renewable Fuels LLC and Platinum Ethanol LLC increased their combined share of the EU bioethanol market to 15.7 percent in the 12 months through September 2011 compared with 1.9 percent in 2008, according to the bloc.
“This clearly exerted pressure on the Union industry,” the EU said. The main other country that ships bioethanol to the EU is Brazil, whose share of the European market in the same period fell to 4.5 percent from 30.3 percent, the bloc said.
In December, the EU dropped a separate threat to apply five-year anti-subsidy duties on U.S. bioethanol by closing an inquiry that was opened at the same time as the dumping investigation. In such trade cases, the European Commission has the right to apply provisional levies pending a decision by EU governments on “definitive” measures. In the two EU probes on U.S. bioethanol, the commission, the EU’s regulatory arm, refrained from introducing provisional duties.
The EU imposes anti-dumping duties and anti-subsidy duties on imports from the U.S. of biodiesel, a type of biofuel made from vegetable oils and animal fats for use in diesel engines. Those five-year levies were applied in 2009.
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