EU Set to Impose Tariffs on Chinese Biofuels in Anti-Dumping Probe -- Update

By Enes Morina

LONDON--The European Union has proposed provisional tariffs on biofuels from China after saying it found that Chinese companies were dumping the commodity into European markets at unfair prices.

The European Commission, the EU's executive arm, has proposed duties of between 12.8% and 36.4% in an attempt to reverse the damage on domestic producers from China's dumping practices. The tariffs will likely come into force in August, although the EU's anti-dumping probe will continue until February 2025, when definitive measures can be imposed.

The move follows a significant slump in biofuels prices. The European benchmark price for used cooking oil-based biodiesel averaged $1,300 a metric ton for the first seven months of this year, down by nearly 40% from the same period in 2022, according to commodity data provider Argus Media.

Meanwhile, Chinese exports have flooded the EU market. In 2023, European imports of Chinese biofuels rose to around 1 million metric tons, up from around 550,000 metric tons the previous year, according to Global Trade Tracker.

The downturn has forced oil companies to scale back their biofuels ambitions in Europe. Last month, BP paused the development of two new biofuels projects. In July, Shell halted construction work at a Dutch biofuels plant to ensure "future competitiveness given current market conditions."

The EU launched a probe last year after an official complaint was raised by the European Biodiesel Board about China's "highly damaging unfair trading practices." A separate investigation into the circumvention of duties on Indonesian biodiesel through China was dropped earlier this year, after the EBB withdrew its complaint.

Until May, biofuel imports from China amounted to around 434,000 metric tons, in line with last year, according to Global Trade Tracker. Recently, both domestic and international biofuel trade have slowed ahead of the EU's proposal of provisional tariffs.

"Uncertainty about the outcome of the investigation keeps most market participants from taking on bigger positions," said Sophie Barthel, head of European biofuel pricing at Argus.

The EU's announcement is the latest in a series of trade spats between Brussels and Beijing. China has already launched anti-dumping investigations this year into pork and brandy products imported from the EU. In July, the EU confirmed plans to impose additional tariffs on electric cars made in China.

Write to Enes Morina at [e-mail]

(END) Dow Jones Newswires

07-19-24 1537ET