U.S.-EU biodiesel "splash and dash" tariff fight escalating
While biodiesel advocates go about setting up sustainability principles, the EU and the U.S. are in a growing dispute over the biofuel. The problem is that the Europeans see the $1-a-gallon tax credit that the U.S. provides for B99 (made up of 99 percent biodiesel and one percent petro-diesel) as an unfair subsidy that is harming the European biodiesel market. The EU's response: slap new (but temporary) tariffs on biodiesel imports from the U.S., maybe. The European Commission is looking into applying the tariffs, and should make a decision by March 13. One of the big problems, according to an article in the Seattle TImes, is a practice called "splash and dash." This is when American producers import pure (that is, B100) biodiesel made somewhere else, add a bit of petro-diesel to the fuel and collect the tax credit and then ship the biodiesel to Europe. This has been going on for years. The Financial Times says that the American companies' practices are pushing biodiesel prices in Europe down by between 89 and 99 U.S. cents per gallon. The U.S.'s National Biodiesel Board says European comanies are "not being hurt by US competition," and wants the U.S. to take action against the EU through the World Trade Organization. Sigh.
[Source: Seattle TImes, Financial Times]
Photo by ? Redvers. Licensed under Creative Commons license 2.0.
Reader Comments (Page 1 of 1)
Gerald Ragain 5:36PM (2/23/2009)
Rarely agree with any of the EU trade positions since they are usually just trying for an advantage, but if the Biodeisel is just reexported, they have a point. Noway we should be giving tax credits on something that in effect is just shipped thru the US.
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Nils 9:55PM (2/23/2009)
US trade policies to the contrary are always fair.
Terry Yeung 3:37PM (3/01/2009)
From reading the source article it seems like the EU response will hurt some domestic biodiesel producers. I have no problem the 99 cent subsidy _IF_ the biodiesel was actually produced in the US. But it looks like a lot of them are just importing it into the US to collect the subsidy. The obvious solution is to change the legislation to only give this subsidy for domestically produced biodiesel.
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David M 6:00PM (4/02/2009)
AMEN TO THAT. A US biodiesel subsidy should be encouraging production and use domestically. I would favor a credit only for domestic production. Setting up a blending center is child's play and should not be rewarded with taxpayer dollars.
Alternatively, have a gas tax based on the percentage of fossil fuel content,
jharlan 6:37PM (2/23/2009)
You would think this would be fraud, and our government is either condoning it or they are actually as dumb as they look.
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mr.vail 7:49PM (2/23/2009)
The EU has always liked a little wine with their petro. However the B99 tax credit should only be for B99 used in the U.S.A. and not for export. Thats having your cake and eating it to.
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