# EUR-Lex - 52013PC0748 - EN

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# 52013PC0748

**Proposal for a COUNCIL IMPLEMENTING REGULATION imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of biodiesel originating in Argentina and Indonesia /* COM/2013/0748 final - 2013/0363 (NLE) */**

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EXPLANATORY MEMORANDUM

1.           CONTEXT OF THE PROPOSAL

Grounds for and objectives of the
proposal

This proposal concerns the application of
Council Regulation (EC) No 1225/2009 of 30 November 2009 on protection against
dumped imports from countries not members of the European Community ('the basic
Regulation') in the anti-dumping proceeding concerning imports of biodiesel
originating in Argentina and Indonesia.

General context

This proposal is made in the context of the
implementation of the basic Regulation and is the result of an investigation
which was carried out in line with the substantive and procedural requirements
laid out in the basic Regulation.

Existing provisions in the area of the
proposal

Provisional measures were imposed by
Commission Regulation (EU) No 490/2013 (OJ L 141, 28.05.2013, p.6).

Consistency with other policies and
objectives of the Union

Not applicable.

2.           RESULTS OF CONSULTATIONS
WITH THE INTERESTED PARTIES AND IMPACT ASSESSMENTS

Consultation of interested parties

Interested parties concerned by the
proceeding have had the possibility to defend their interests during the
investigation, in line with the provisions of the basic Regulation.

Collection and use of expertise

There was no need for external expertise.

Impact assessment

This proposal is the result of the
implementation of the basic Regulation.

The basic Regulation does not contain
provisions for a general impact assessment but contains an exhaustive list of
conditions that have to be assessed.

3.           LEGAL ELEMENTS OF THE
PROPOSAL

Summary of the proposed action

On 29 August 2012 the Commission initiated
an anti-dumping proceeding concerning imports of biodiesel originating in Argentina and Indonesia.

The Commission imposed provisional
anti-dumping duties on these imports by Regulation (EU) No 490/2013 of 27 May 2013.

The attached proposal for a Council
Regulation is based on the definitive findings which have confirmed the
existence of dumping causing injury, and the fact that the imposition of
measures is not against the overall Union interest.

It is therefore proposed that the Council
adopt the attached proposal for a Regulation which should be published no later
than 28 November 2013.

Legal basis

Council Regulation (EC) No 1225/2009 of 30
November 2009 on protection against dumped imports from countries not members
of the European Community.

Subsidiarity principle

The proposal falls under the exclusive
competence of the European Union. The subsidiarity principle therefore does not
apply.

Proportionality principle

The proposal complies with the
proportionality principle for the following reasons:

The form of action is described in the
above-mentioned basic Regulation and leaves no scope for national decision.

Indication of how financial and
administrative burden falling upon the Union, national governments, regional
and local authorities, economic operators and citizens is minimized and
proportionate to the objective of the proposal is not applicable.

Choice of instruments

Proposed instruments: regulation.

Other means would not be adequate for the
following reason:

Other means would not be adequate because
the basic Regulation does not provide for alternative options.

4.           BUDGETARY IMPLICATION

The proposal has no implication for the
Union budget.

2013/0363 (NLE)

Proposal for a

COUNCIL IMPLEMENTING REGULATION

imposing a definitive anti-dumping duty
and collecting definitively the provisional duty imposed on imports of
biodiesel originating in Argentina and Indonesia

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning
of the European Union,

Having regard to Council Regulation (EC) No
1225/2009 of 30 November 2009 on protection against dumped imports from
countries not members of the European Community[1],
(‘the basic Regulation’), and in particular Article 9 thereof,

Having regard to the proposal submitted by
the European Commission after having consulted the Advisory Committee,

Whereas:

A. PROCEDURE

1.           Provisional measures

(1)       On 27 May 2013 the European
Commission (‘the Commission’), decided to impose a provisional anti-dumping
duty on imports of biodiesel originating in Argentina and Indonesia (‘the
countries concerned’) by Regulation (EU) No 490/2013[2] (‘the provisional Regulation’).

(2)       The proceeding was
initiated on 29 August 2012[3]
following a complaint lodged on behalf of Union producers (‘the complainants’),
representing more than 60% of the total Union production of biodiesel.

(3)       As set out in recital (5) of
the provisional Regulation, the investigation of dumping and injury covered the
period from 1 July 2011 to 30 June 2012 (‘the investigation period’ or ‘IP’).
The examination of trends relevant for the assessment of injury covered the
period from 1 January 2009 to the end of the IP (‘the period considered’).

2.           Subsequent procedure

(4)       Subsequent to the
disclosure of the essential facts and considerations on the basis of which it
was decided to impose a provisional anti-dumping duty (‘provisional
disclosure’), several interested parties made written submissions making known
their views on the provisional findings. The parties who so requested were
granted an opportunity to be heard.

(5)       The Commission continued
to seek and verify all information it deemed necessary for its definitive
findings. The oral and written comments submitted by the interested parties
were considered and, where appropriate, the provisional findings were modified
accordingly.

(6)       Subsequently all parties
were informed of the essential facts and considerations on the basis of which
it was intended to recommend the imposition of a definitive anti-dumping duty
on imports of biodiesel originating in Argentina and Indonesia and the
definitive collection of the amounts secured by way of provisional duty ('the definitive
disclosure'). All parties were granted a period within which they could make comments
on the final disclosure.

(7)       The comments submitted by
the interested parties were considered and taken into account where
appropriate.

B. SAMPLING

(8)       In the absence of comments
concerning the sampling of exporting producers in Argentina and Indonesia the provisional findings in recitals (10) to (14) and (16) to (20) of the
provisional Regulation are hereby confirmed.

(9)       One interested party
requested further information on the representativity of the sample of Union
producers, both at the stage of provisional selection as set out in recital
(23) of the provisional Regulation and at the stage of final selection as set
out in recital (83) of the provisional Regulation.

(10)     The sample of Union
producers provisionally selected consisted of 32.5% of the production of
biodiesel in the Union during the IP. Following the changes explained in
recital (24) of the provisional Regulation the final sample consisted of eight
companies covering 27% of Union production. The sample was therefore considered
to be representative of the Union industry.

(11)     One interested party
claimed that two Union producers that were sampled should be removed from the
sample due to their relationship with Argentine exporting producers. The
alleged relationship was examined prior to the imposition of provisional
measures and the Commission’s conclusions already published in recital (82) of
the provisional Regulation.

(12)     All of the alleged links
between Argentine exporting producers and the two sampled companies referred to
above were examined again, and no direct link between them was found such that
either Union producer should be removed from the sample. The sample therefore
remained unchanged.

(13)     Another interested party
claimed that the Commission’s procedure for selecting a sample of Union
producers was flawed, as the Commission proposed a sample prior to initiation
of the investigation.

(14)     This claim is rejected. The
Commission did not select the final sample until after the initiation of the
investigation and entirely in line with the provisions of the basic Regulation.

(15)     In the absence of any other
claim or comments, the content of recitals (22) to (25) of the provisional
Regulation is confirmed.

C. PRODUCT CONCERNED AND LIKE
PRODUCT

1.           Introduction

(16)     As set out in recital (29)
of the provisional Regulation, the product concerned as provisionally defined is
fatty-acid
mono-alkyl esters and/or paraffinic gasoils obtained from synthesis and/or
hydro-treatment, of non-fossil origin, in pure form or as included in a blend
originating in Argentina and Indonesia, currently falling within CN codes ex
1516 20 98, ex 1518 00 91, ex 1518 00 95, ex 1518 00 99, ex 2710 19 43, ex 2710
19 46, ex 2710 19 47, 2710 20 11, 2710 20 15, 2710 20 17, ex 3824 90 97, 3826
00 10 and ex 3826 00 90 (‘the product concerned’, commonly referred to as
‘biodiesel’).

2.           Claims

(17)     One Indonesian exporting
producer claimed that contrary to what was stated in recital (34) of the
provisional Regulation, palm methyl ester (PME) produced in Indonesia was not a
like product to rapeseed methyl ester (RME) and other biodiesels produced in
the Union, or soybean methyl ester (SME) produced in Argentina because of the
much higher CFPP of PME which means that it must be blended before use in the
EU.

(18)     This claim is rejected. PME
produced in Indonesia is in competition with biodiesel produced in the Union, which is not just RME but also biodiesel made from palm oil and other feedstocks.
PME can be used throughout the Union throughout the year, by blending with
other biodiesels before use, in the same way as RME and SME. PME is therefore
interchangeable with biodiesel made in the EU and therefore is a like product.

(19)     Recital (35) of the
provisional Regulation states the claim of one Indonesian producer that fractionated
methyl esters should be excluded from the product scope of this proceeding. The
same producer maintained this request in its comments on provisional disclosure
restating their argument from prior to provisional disclosure.

(20)     The Union industry however
disputed this claim stating that fractionated methyl esters were biodiesel and
should remain within the product scope.

(21)     Following comments received
after provisional stage, the decision of the Commission in recital (36) of the
provisional Regulation is confirmed. Regardless of the fact that various fatty
acid methyl esters have different Chemical Abstracts Service (‘CAS’) numbers;
that different processes are used to produce these esters; and that they have
possible different uses, fractionated methyl esters are still fatty acid methyl
esters and can still be used for fuel use. Given the difficulties of
distinguishing one fatty acid methyl ester from another without chemical
analysis at the point of importation, and the possibility of circumvention of
the duties as a result, with PME biodiesel being declared as fractionated
methyl ester made from palm oil, the claim remains rejected.

(22)     In recital (37) of the
provisional Regulation it is mentioned that one European importer of palm
kernel oil fatty acid methyl ester (‘PKE’) requested that imports of this
product be subject to End Use Relief, or otherwise be excluded from the product
scope of this proceeding.

(23)     The Union industry commented
after provisional disclosure on the use of end use relief for imports of PKE
and the possibility of circumvention of the duties proposed. They opposed the
Commission’s authorisation to use such a scheme for relief of anti-dumping
duties due to the fungible nature of biodiesel; biodiesel declared for non-fuel
use could be used for fuel as it has the same physical properties. PKE can be
used for fuel use; the unsaturated fatty alcohol that is made out of PKE can
also be further processed into biodiesel; and the control that Customs can
apply on imports under End Use Relief is limited and the economic burden
resulting from the use of this scheme remains significant.

(24)     Following consultations on
this issue and in view of the fact that biodiesel declared as for non-fuel use
has the same physical properties as biodiesel for fuel use, it is not
appropriate to allow End Use Relief for imports of PKE in the present case.

(25)     One German importer
repeated their request for product exclusion and/or End Use Relief for a
particular fatty acid methyl ester manufactured from palm kernel oil (PKE)
which was destined for use other than fuel in the EU. The comments made
restated their position which had been rejected at provisional stage and no new
evidence was provided that would change the conclusion that End Use Relief
should not be granted and that PKE should remain within the product scope.

(26)     One Indonesian exporting
producer also referred to their claim for End Use Relief for fractionated
methyl esters and requested End Use Relief for these imports for the
manufacture of saturated fatty alcohol. As set out above all requests for End
Use Relief have been denied and the arguments set out by this interested party
did not change this conclusion.

3.           Conclusion

(27)     In the absence of other
comments regarding the product concerned and the like product, recitals (29) to
(39) of the provisional Regulation are hereby confirmed.

D. DUMPING

1.           Introductory remarks

(28)     Recitals
(44) and (64) of the provisional Regulation explained that both the Argentine and
the Indonesian biodiesel markets are heavily regulated by the State and thus
domestic sales were not considered as being made in the ordinary course of
trade. As a consequence, the normal value of the like product had to be
constructed pursuant to Article 2(3) and (6) of the basic Regulation. This
finding was not contested by any interested party and is therefore confirmed.

(29)     For both Argentina and
Indonesia the constructed normal value at provisional stage was calculated on
the basis of the companies’ own actual (and recorded) production costs during
the IP, selling, general and administrative expenses (‘SG&A’) incurred and
a reasonable profit margin. Recitals (45) and (63) of the provisional Regulation
noted in particular that the Commission would further examine the claim that the
Differential Export Tax systems (‘DET’) in Argentina and Indonesia distort raw
material prices and that, therefore, the recorded costs of production did not
reasonably reflect the costs associated with the production of the product concerned.

(30)     The further investigation
has demonstrated that indeed the DET systems depressed the domestic prices of
the main raw material input in both Argentina and Indonesia to an artificially
low level, as explained below in recitals (35) onwards for Argentina and recital (66) for Indonesia and, as a consequence, affect the costs of the biodiesel
producers in both countries concerned. In view of this finding it is considered
appropriate that this cost distortion of the main raw materials should be taken
into account in establishing the normal values in both countries, given the
particular market situation prevailing both in Argentina and Indonesia.

(31)     The General Court has
confirmed[4]
that when the prices of raw materials are regulated in such a way that they are
artificially low on the domestic market, it may be presumed that the cost of
producing the product concerned is affected by a distortion. The General Court
considered that under such circumstances, the Union institutions are entitled
to conclude that one of the items in the records cannot be regarded as
reasonable and that, consequently, such item can be adjusted.

(32)     The General Court also
concluded that it is apparent from the first subparagraph of Article 2(5) of
the basic Regulation that the records of the party concerned do not serve as a
basis for calculating normal value if the costs associated with the production
of the product under investigation are not reasonably reflected in those
records. In that case, the second sentence of the first subparagraph provides
that the costs are to be adjusted or established on the basis of sources of
information other than those records. That information may be taken from the
costs incurred by other producers or exporters or, when that information is not
available or cannot be used, any other reasonable source of information,
including information from other representative markets.

(33)     In the provisional
calculations, the actual domestic purchase price of soya beans and the actual
booked cost for crude palm oil was used when computing the costs of production
for respectively Argentine and Indonesian producing exporters.

(34)     Given
that certain costs of production, and namely the costs of the main raw material
and (soybean oil and soya beans in Argentina and crude palm oil in Indonesia), were
found to be distorted, they were established on the basis of reference prices
published by the relevant authorities of the countries concerned. Those prices
reflect the level of international prices.

2.           Argentina

2.1.        Normal Value

(35)     As mentioned above, the Commission has now reached the
conclusion that the DET system in Argentina distorts the costs of production for biodiesel producers in that
country. The investigation established that during the IP export taxes on raw
material (35% on soya beans and 32% on soybean oil) were significantly higher
than the export taxes on the finished product (nominal rate of 20% on
biodiesel, with an effective rate of 14,58% taking into account a tax rebate). As
a matter of fact, the difference between the export tax on soya beans and
biodiesel was 20.42 percentage points, and between soya bean oil and biodiesel
was 17.42 percentage points during the IP.

(36)     To determine the level of
the export tax for soya beans and soya bean oil, the Argentine Ministry of
Agriculture, Livestock and Fisheries publishes on a daily basis the FOB price
for soya beans and soya bean oil – ‘the reference price’[5]. This
reference price reflects the level of international prices[6] and is used to calculate the amount of the export tax to be paid to
the tax authorities.

(37)     The domestic prices follow
the trends of the international prices. The investigation established that the
difference between the international and the domestic price of soya beans and
soya bean oil is the export tax on the product and other expenses incurred for
exporting it. The domestic reference prices of soya beans and soya bean oil are
also published by the Argentine Ministry of Agriculture as the ‘FAS theoretical
price’[7]. The producers of soya beans and soya bean oil therefore obtain the
same net price no matter whether they sell for export or domestically.

(38)     In
conclusion, the domestic prices of the main raw material used by biodiesel producers
in Argentina were found to be artificially lower than the international prices
due to the distortion created by the Argentine export tax system and,
consequently, the costs of the main raw material were not reasonably reflected
in the records kept by the Argentinean producers under investigation in the
meaning of Article 2(5) of the basic Regulation as interpreted by the General
Court as explained above.

(39)     The Commission has therefore
decided to revise recital (63) of the provisional Regulation and disregard the
actual costs of soya beans (the main raw material purchased and used in the
production of biodiesel) as recorded by the companies concerned in their
accounts and to replace them with the price at which those companies would have
purchased the soya beans in the absence of such a distortion.

(40)     In order to establish the
cost at which companies concerned would have purchased the soya beans in the
absence of such a distortion, the Commission took the average of the reference
prices of soya beans published by the Argentine Ministry of Agriculture for
export FOB Argentina during the IP[8].

(41)     The association of
Argentine exporting producers (CARBIO) and the Argentine authorities claimed
that an adjustment to the costs borne by the companies under Article 2(5) of
the basic Regulation is only possible when the records, and not the costs
incurred by the companies, do not reasonably reflect the costs associated with
the production and sale of the product concerned. They stated that in practice
the Commission added the export taxes to the price paid by the companies when
purchasing soya beans, thus including in the costs of productions an item which
is not associated with the production or sale of the product concerned. They added
that the General Court’s ruling “Acron” quoted in the disclosure document[9] is based on a wrong interpretation of Article 2.2.1.1 of the WTO
Anti-Dumping Agreement (ADA), it is currently being appealed before the Court
of Justice and in any event the factual considerations are different from those
in the present case, since raw material prices in Argentina are not “regulated”
as it is the gas price in Russia and are not distorted but determined freely
without any State intervention and therefore there is not a particular market
situation in Argentina that would allow the Commission to apply Article 2(5) of
the basic Regulation. They declared that the DET system in Argentina is not inconsistent with any trade rules. In addition, CARBIO claimed that, since
export taxes were not taken into account when establishing the export price,
the Commission did not make a fair comparison between constructed normal value
(which takes into account export taxes) and export price (which does not take
into account export taxes). Moreover, they claimed that by referring to the
international prices of soya beans as established in the Chicago Board of Trade
(CBOT) when constructing normal value, but disregarding the gains or losses
linked to the hedging activities at the CBOT when establishing the export price
(see below), again the Commission did not make a fair comparison between normal
value and export price. Furthermore CARBIO claimed that by mere replacing the
costs recorded by the companies under investigation with an international
price, the Commission did not take into account the natural competitive
advantage of the Argentine producers. Finally, CARBIO complained that the
Commission did not take into account the fact that in the absence of the DET in
  Argentina, the CBOT prices of soya beans would have been much lower.

(42)     These claims must be
rejected. Even if the facts of the “Acron” case are not the same as the facts
in the present case, the General Court has nevertheless established the
principle of law that if the costs associated with the production of the
product under investigation are not reasonably reflected in the records of the
companies, they do not serve as a basis for calculating normal value. In the
“Acron” case the costs were not reasonably reflected in the records of the
company concerned because the gas price was regulated. In the present case it
was established that the costs associated with the production of the product
concerned are not reasonably reflected in the records of the companies
concerned as they are artificially low due to the distortion caused by the Argentine
DET system. This holds true regardless of whether or not DET systems in general
may be as such contrary to the WTO Agreement. Furthermore, the Commission
considers that the General Court based itself on a correct interpretation of
the ADA. In fact, in China – Broilers,[10] the
panel found that although Article 2.2.1.1 of the ADA sets up a presumption that
the books and records of the respondent shall normally be used to
calculate the cost of production, the investigating authority retains the right
to decline to use such books if it determines that they are either (i)
inconsistent with GAAP or, (ii) do not reasonably reflect the costs associated
with the production and sale of the product under consideration. However, when
making such a determination to derogate from the norm, the investigating authority
must set forth its reasons for doing so. Consistent with this interpretation,
in view of the distortion created by the DET system, which creates a particular
market situation, the Commission replaced the costs recorded by the companies
concerned for the purchase of the main raw material in Argentina with the price that would have been paid in the absence of the established distortion.
The fact that from a pure numerical point of view the result is similar does
not mean that the methodology applied by the Commission consisted in simply adding
the export taxes to the costs of the raw material. International prices of
commodities are set based on supply and demand and there is no evidence that
the DET system in Argentina affects the CBOT prices. Therefore, all claims and
allegations that by using an international price the Commission did not make a
fair comparison between normal value and export price are unfounded. The same
applies to the claim that the Commission did not take into account the natural
competitive advantage of the Argentine producers, because the replacement of
the costs recorded by the companies was due to the abnormally low price of raw
material in the domestic market, rather than to a comparative advantage.

(43)     In recital (45) of the
provisional Regulation, it was explained that since domestic sales were not considered
as being made in the ordinary course of trade, normal value had to be
constructed using a reasonable amount for profit of 15% pursuant to Article
2(6)(c) of the basic Regulation. Some exporting producers claimed that the percentage
used by the Commission as a reasonable profit (15%) when constructing normal
value was unrealistically high and a radical change in the established practice
in a number of other investigations in similar commodity-related markets (i.e. where
the profit used was about 5%).

(44)     This claim must be
rejected. First of all, it is incorrect that the Commission uses systematically
a 5% profit margin when constructing normal value. Every situation is assessed
on its own merits taking into account the specific circumstances of the case.
For example, in the 2009 biodiesel case against the United States, various
different profit levels were used with the weighted average profit being well
above 15%. Second, the Commission looked also at the short and medium term
borrowing rate in Argentina which is around 14% according to the World Bank
data. It certainly seems reasonable to expect a higher profit margin to be
obtained when doing business in the domestic biodiesel markets than the
borrowing cost of capital. Furthermore, this profit is even
lower than the profit realised during the IP by the producers of the product
concerned, albeit that level results from distortions in costs brought about by
the DET and domestic biodiesel prices regulated by the State. Therefore, and for the reasons explained above, it is maintained
that 15% profit is a reasonable amount that can be achieved by a relatively
new, capital-intensive industry in Argentina.

(45)     Following definitive
disclosure, CARBIO and the Argentine authorities claimed that (i) the reference
to the profit levels in the US case was unjustified; (ii) the reference of the
medium-term borrowing rate lacks logic, was never used in the past and if such
a benchmark is to be used, it should not be that of Argentina because
investments were made in US dollars together with foreign entities; (iii) the
profit actually earned by the Argentine producers could not be taken into
account due to the particular market situation; and (iv) by comparison the
Union industry target profit was set at 11%.

(46)     Those claims must be
rejected. The Commission considered that a 15% profit margin was reasonable for
the biodiesel industry in Argentina, since in that country during the IP it was
still a young and capital intensive industry. The reference to the profit
margin in the US case was made to rebut the claim that the Commission uses
systematically a 5% profit margin when constructing normal value. The reference
to the medium-term borrowing rate also was not meant to set a benchmark but to
test the reasonableness of the margin used. The same applies to the profit
actually earned by the sampled companies. On the other hand, since the purpose
of constructing normal value is different from the calculation of the target
profit for the Union industry in the absence of dumped imports, any comparison
between the two is irrelevant. Therefore, recital (46) of the provisional
Regulation is hereby confirmed.

(47)     One exporting producer
manufactures biodiesel partly in its own plants and partly via a tolling
agreement with an independent producer. This exporting producer requested that its
cost of production be recalculated using a different weighted average of its
own cost of production and of the cost of production of the toller than the one
used by the Commission at provisional stage. This request was analysed and
found to be justified and the cost of production for the company concerned was
recalculated accordingly.

(48)     The Commission received
other minor company-specific claims but they became moot following the change
in methodology of constructing the normal value as explained above. Therefore,
the findings in recitals (40) to (46) of the provisional Regulation are, with
the modifications explained above, hereby confirmed.

2.2.        Export price

(49)     In recital (49) of the
provisional Regulation, it was explained that when export sales were made
through related trading companies located inside the Union, adjustments were
made to the export price, including for the profit accruing to the related
trader in accordance with Article 2(9) of the basic Regulation. For the purpose
of that calculation, a level of profit of 5% for the related trader inside the Union was considered reasonable. Two exporting producers claimed that a 5% profit margin
for the related trader within the Union was too high in the commodity trading
business and that either no profit, or a lower percentage should be used (up to
2% depending on the companies).

(50)     No evidence was provided in
support of this claim. In these circumstances the 5% profit level for related
traders within the EU is confirmed.

(51)     Following definitive
disclosure, CARBIO maintained that a profit margin of 5% was too high in the
commodity trading business and referred to a study prepared by KPMG
specifically for this purpose and submitted to the Commission on 1st
July 2013 following disclosure of the provisional Regulation. The Commission
considered that the findings of the study could not be relied upon due to the
limitations to the analysis referred to in the study itself, which led to a
selection of a limited number of trading companies, half of which were not
selling agricultural products. Therefore, the evidence provided is considered
to be inconclusive. As a consequence, the 5% margin of profit for the related
traders in the EU is confirmed.

(52)     One exporting producer complained
that when establishing the export price the Commission did not take into
account the so-called ‘hedging results’, i.e. the gain or losses incurred by
the producer when selling and purchasing future contracts of soybean oil at the
Chicago Board of Trade (CBOT). The company insisted that hedging is a necessary
element of the biodiesel business because of the volatility of raw material
price, and that the net revenue for the biodiesel seller is not only the price
paid by the purchaser, but also the profit (or loss) of the underlying hedging
operations.

(53)     This claim must be rejected
because Article 2(8) of the basic Regulation clearly provides that the export
price shall be the price actually paid or payable for the product when sold for
export, regardless of any separate – albeit related – gain or loss linked to
hedging practices.

(54)     In the absence of any further
comments regarding export prices, recitals (47) to (49) of the provisional
Regulation are, with the changes mentioned above, hereby confirmed.

2.3.        Comparison

(55)     In recital (53) of the
provisional Regulation, it was explained that when export sales were made
through related trading companies located outside the EU, the Commission
examined whether the related trader should be treated as an agent working on a
commission basis and, if so, an adjustment was made in accordance with Article
2(10)(i) of the basic Regulation to take account of a notional mark-up received
by the trader.

(56)     One company claimed that
the profit margin used by the Commission for the related trader outside the EU as
a notional mark-up was too high and that a lower profit margin would be more
reasonable.

(57)     The Commission examined
carefully the arguments put forward by the exporting producer, but concluded
that in light of the extensive activities carried out by the related traders, a
profit margin of 5% was considered reasonable. Therefore, this claim must be
rejected.

(58)     In the absence of any other
comments regarding comparison, recitals (50) to (55) of the provisional
Regulation are hereby confirmed.

2.4.        Dumping margins

(59)     All cooperating Argentine exporting
producers requested that if an anti-dumping duty were to be imposed on imports
of biodiesel from Argentina, there should be a single duty for all cooperating
exporting producers, based on the weighted average of the anti-dumping duties
of all exporting producers in the sample. They supported this request by claiming
that all sampled producers have commercial or other links among each other,
they produce, sell, loan or swap biodiesel to each other and often the product
of various companies is loaded together in the same ocean vessel and shipped to
the EU and it is no longer possible for customs authorities to identify and
distinguish the product of different producers. These peculiar circumstances
were said to render the imposition of individual duties impracticable.

(60)     Notwithstanding the fact
that the request comes from all exporting producers, even including those with
a lower individual dumping margin than the weighted average margin, and despite
the potential simplification for the customs authorities, this request should be
rejected. Indeed, alleged practical difficulties should not be used as an
excuse to derogate from the provisions of the basic Regulation unless it is
unavoidable. In this case, the companies’ practice to swap, borrow or otherwise
mingle the product concerned does not in itself render the imposition of
individual duties impracticable in the meaning of Article 9(6) of the basic
Regulation.

(61)     Three companies requested their
names included in the list of cooperating exporting producers in order to
benefit from the anti-dumping duty rate of the cooperating non-sampled
companies rather than the residual duty for ‘all other companies’.

(62)     Two of the three companies were
already manufacturing biodiesel for the domestic market or under tolling
agreements for other exporting producers during the IP, but they were not
themselves exporting to the EU. The third company was not producing biodiesel
during the IP since its plant was still under construction at that time.

(63)     The Commission considers
that the conditions for being considered a cooperating exporting producer are
not met in the cases of the three companies referred to above. This applies not
only to the company which was not producing biodiesel at all during the IP, but
also to the companies which cooperated with the investigation by submitting a
sampling form, since in their sampling reply they made it clear that they were
producing for the domestic market or for third parties but they were not
exporting biodiesel to the EU on their own name.

(64)     This request must therefore
be rejected and the ‘residual’ anti-dumping duty should apply to the three
companies in question.

(65)     Taking into account the
adjustments made to the normal value and to the export price as set out above,
and in the absence of any further comments, the table in recital (59) of the
provisional Regulation is replaced by the following and the definitive dumping
margins, expressed as a percentage of the CIF Union frontier price, duty
unpaid, are as follows:

Company ||             Dumping margin

Louis Dreyfus Commodities S.A. ||             46.7%

Group “Renova” (Molinos Río de la Plata S.A., Oleaginosa Moreno Hermanos S.A.F.I.C.I. y A. and Vicentin S.A.I.C.) ||             49.2%

Group “T6” (Aceitera General Deheza S.A., Bunge Argentina S.A.) ||             41.9%

Other cooperating companies ||             46.8%

All other companies ||             49.2%

3.           Indonesia

3.1.        Normal Value

(66)     As mentioned above in recitals
(28) to (34), the Commission has now reached the conclusion that the DET system
in Indonesia distorts the costs of production of biodiesel producers in that
country and that therefore the costs associated with the production and sale of
the product concerned are not reasonably reflected in the records kept by the
Indonesian producers under investigation.

(67)     The Commission has
therefore decided to revise recital (63) of the provisional Regulation and
disregard the actual costs of crude palm oil (CPO), the main raw material
purchased and used in the production of biodiesel, as recorded by the companies
concerned in their accounts and to replace them with the price at which those
companies would have purchased the CPO in the absence of such a distortion.

(68)     The
investigation has confirmed that the price level for the domestically traded
CPO is significantly depressed as compared to the “international” reference
price, the difference being very close to the export tax applied to CPO. Since the DET system limits the possibilities to export CPO, it
leads to larger quantities of CPO being available on the domestic market, hence
putting pressure down on the domestic CPO prices. This constitutes a particular
market situation.

(69)     During the IP biodiesel
exports had an export tax rate between 2 and 5%. During the same period CPO
exports had an export tax rate ranging between 15-20% while the export tax for
RBDPO ranged from 5-18.5%. The different tariff rates apply according to the
corresponding range of reference prices (which follow the international market
trends and have nothing to do with quality differences). The export tax for the
palm fruit is set at a flat rate of 40%.

(70)     For
the reasons mentioned above, recital (63) of the provisional Regulation is
revised and the cost of the main raw material (CPO) recorded by the companies
concerned has, pursuant to Article 2(5) of the basic Regulation, been replaced
by the reference export price (HPE)[11] for CPO
published by the Indonesian Authorities which is in turn based on published
international prices (Rotterdam, Malaysia and Indonesia). This adjustment is
made in respect of CPO that was purchased from both related and unrelated
companies. The cost of the own produced CPO within the same legal entity is
accepted given that no evidence has been found that the cost of the own
produced CPO within the same legal entity is affected by the distortion.

(71)     All exporting producers
from Indonesia as well as the Government of Indonesia claim that the replacement
of the costs for CPO, as recorded by the companies, with the Indonesian
reference export price for CPO is neither permissible under WTO rules nor under
Article 2(5) of the basic Regulation and is hence illegal. In this regard the
Government of Indonesia claimed that the Commission wrongly treated the Republic of Indonesia as a non-market economy. The arguments put forward by the companies
can be summarised as follows. Firstly, the Commission has not demonstrated any
reason to depart from the actual costs recorded or that these costs do not
reasonably reflect the costs associated with the production of product
concerned but has simply stated that the recorded costs are artificially low
compared to international prices and should therefore be replaced. This is
contrary to WTO rules according to which the test for determining whether a
particular cost can be used for calculating production costs is whether that
cost is associated with the production and sale of the product and not whether
that cost reasonably reflect market value. Secondly, even if Article 2(5) of
the basic Regulation seemingly allows for an adjustment to be made, the
application of that Article would be limited to situations where the State
interferes directly on the market by setting or regulating the prices at an
artificially low level. However, in this particular case, the Commission
alleges that the domestic price of CPO, rather than being regulated by the
State, is artificially low simply due to the export tax imposed on CPO. Even if
this were to be true, any effect on the domestic price can only be considered
as accidental or mere side-effects of the export tax system. Thirdly, the
Commission wrongly relies on the Acron judgment to justify the legality
of the CPO adjustment. This judgment is currently under appeal and cannot
therefore be relied upon as a precedent. In any case, the factual circumstance
in Acron was different as it relates to a situation where, contrary to
CPO prices in Indonesia which are set freely on the market, the gas prices had
been regulated by the State. Finally, the Government of Indonesia claimed that
the Article 2(5) adjustment was done solely to increase dumping margins by
reason of differences in taxation.

(72)     The claim that the
adjustment under Article 2(5) basic Regulation is illegal under WTO and/or Union rules must be rejected. The basic Regulation has transposed the WTO anti-dumping
agreement (ADA) and it is therefore considered that all provisions of this
Regulation, including Article 2(5), are consistent with the Union’s obligations
under ADA. In this respect it is recalled that Article 2(5) of the basic
Regulation is applicable to both market and non-market economies equally. As
mentioned above (recital 42), the General Court established
in the Acron case the principle of law that if the costs associated with
the production of the product under investigation are not reasonably reflected
in the records of the companies, they do not serve as a basis for calculating
normal value and that such costs could be replaced with costs reflecting a
price set by market forces pursuant to Article 2(5) of the basic Regulation.
The fact that the Acron case concerned prices that were regulated by the
State cannot, however, be interpreted as meaning that the Commission is
precluded to apply Article 2(5) in respect to other forms of State intervention
that distorts, directly or indirectly, a particular market by depressing prices
to an artificially low level. The panel in China – Broilers has recently
reached a similar conclusion when interpreting Article 2.2.1.1 of the ADA. In the present case the Commission has found that the costs associated with the
production of the product concerned are not reasonably reflected in the records
of the companies concerned because they are artificially low by virtue of the
Indonesian DET system. It was therefore fully justified for the Commission to
adjust the costs for COP under Article 2(5) of the basic Regulation. With
regard to the claim by the Indonesian Government it is noted that that the
Article 2(5) adjustment is based on the demonstrated difference between
domestic and international CPO prices and not on any differences in taxation.

(73)     Two exporting producers in Indonesia claimed that the Commission has failed to demonstrate that the price of Indonesian
domestic CPO is distorted. They argue that Commission’s basic assumption that
the DET limits the possibilities to export CPO, thereby leading to larger
quantities of CPO being available on the domestic market and hence depressing the
domestic CPO prices is factually incorrect as CPO is exported in large
quantities (70% of all production). In any event, even if the domestic CPO
market would be considered distorted by virtue of the DET, also the HPE price
is equally distorted, as it is based on international export prices, which
include the export tax. Therefore, the HPE price for CPO cannot be used as an
appropriate benchmark price for adjusting the cost of CPO.

(74)     Notwithstanding the fact
that CPO is exported from Indonesia in large quantities, the investigation has
revealed that the domestic price of CPO is artificially low as compared with
international prices. Moreover, the price difference found is close to the
export tax imposed on DET. It is therefore reasonable to conclude that the low domestic
price level is a result of a distortion by virtue of the DET. In addition, international
prices of commodities, including CPO, are determined based on supply and demand,
reflecting the dynamics of market forces. No evidence have been adduced that
would indicate those market forces have become distorted by virtue of the
Indonesian DET. The claim that the HPE is an inappropriate benchmark is
therefore rejected.

(75)     One exporting producer,
which was found not to have representative domestic sales (recital (60) of the
provisional Regulation) claimed that the Commission had erroneously made the
representativity test on the basis of sales by related companies individually
instead of the global sales of all companies within the group. It nonetheless
acknowledges that this alleged error had no impact on the provisional finding
made in respect of it. It is recalled that in respect to this exporting
producer all related companies failed individually the representativity test.
Therefore, even if this claim was to be founded it is clear that a
representativity test on the basis of the totality of domestic sales of the all
related companies could not, as acknowledged by the exporting producer, have
had an impact on the provisional findings. In the absence of any further
comments recitals (60) to (62) of the provisional Regulation are hereby
confirmed.

(76)     One party claimed that in
relation to recital (63) of the provisional Regulation an overstated SG&A
was used for that party. After having examined this claim, it appeared that the
SG&A for both domestic and export sales was included in the construction of
normal value. The necessary corrections to use the SG&A for only the domestic
sales were accordingly made.

(77)     One party questioned the
construction of normal value and in particular the choice of methodology under
Article 2(6) as stated in recital (65) of the provisional Regulation. Article
2(6) provides for three alternative methodologies to establish SG&A and
profit in case the actual data of the company cannot be used. This party
claimed that these three methodologies must be considered in the order in which
they are presented and that therefore Article 2(6)(a) and Article 2(6)(b)
should be considered first to be applied.

(78)     Whereas the provisional
Regulation appeared to address only the methodology under Article 2(6)(c), the
following recitals elaborate why Article 2(6)(a) and Article 2(6)(b) are not
applicable in this case.

(79)     Article 2(6)(a) is not
applicable given that no actual amounts for any of the sampled Indonesian (and
Argentinian) companies were established given the fact that they did not have
any sales in the ordinary course of trade. Therefore, no data on actual amounts
of any other exporter or producer (in the sample) is available to apply Article
2(6)(a).

(80)     Article
2(6)(b) is not applicable given that all Indonesian (and Argentinian) companies
in the sample don’t have sales of products of the same general category of
products that are made in the ordinary course of trade.

(81)     In relation to Article 2(6)(b),
this party also argued that the Basic Regulation is inconsistent with the WTO
Regulation to the extent that it contains the requirement in Article 2(6)(b)
that the sales should be made in the ordinary course of trade. However, as
mentioned in recital (72) above, the basic Regulation has transposed the WTO
anti-dumping agreement (ADA) and it is therefore considered that all provisions
of this Regulation, including Article 2(6), are consistent with the Union’s
obligations under ADA and that the sales in the ordinary course of trade
element is fully compliant. ..

(82)     Therefore, the choice of
applying Article 2(6)(c) in using any other reasonable method to determine a
profit margin is confirmed.

(83)     Furthermore, several
parties considered the 15% profit margin used when constructing normal value to
be excessive. They claim that the provisional Regulation does not explain how
the Commission has calculated the 15% and therefore they assume that the
Commission took the 15% from the profit margin used in the injury calculations.
They claimed that in several other cases concerning commodities the Commission
used profit margins in the region of 5%. Several parties suggested using the
profit margin of the bioethanol case from the United States. One party also
suggested using the lower profit margin of its sales of a blend of biodiesel
with mineral diesel. In addition, the Government of Indonesia claimed that it
is duplicative to replace the CPO cost under Article 2(5) of the basic
Regulation while using at the same time a 15% profit margin under Article
2(6)(c) which would reflect the profit margin of an undistorted market. .

(84)     First of all, it is incorrect
that the Commission uses systematically a 5% profit margin when constructing
normal value. Every situation is assessed on its own merits taking into account
the specific circumstances of the case. For example, in the 2009 biodiesel proceeding
against the United States, various different profit levels were used with the
weighted average profit being well above 15%. Second, given that the short and
medium term borrowing rate in Indonesia is around 12% according to World bank
data, it seems reasonable to expect that the profit margin of doing business in
the domestic biodiesel market would be higher than the borrowing cost of
capital. Third, whether or not the sales of a blend of
biodiesel with mineral diesel fall under the same general category of products,
Article 2(6) (b) of the basic Regulation states, as already mentioned in
recital (80) above, that such sales should be made in the ordinary course of
trade. Given that the domestic sales of biodiesel are not in the ordinary
course of trade, the sales of the blend of biodiesel with mineral diesel is
not, mutatis mutandis, considered to be in the ordinary course of trade.
Therefore, and for the reasons explained above, 15%
profit is a reasonable amount that can be achieved by a relatively new,
capital-intensive industry in Indonesia. The argument of the Government of
Indonesia regarding a duplicative effect cannot be accepted since a cost
adjustments under Article 2(5) and the reasonable profit under Article 2(6)(c)
are two clearly distinct issues. Recital (65) of the provisional Regulation is
hereby confirmed.

(85)     One party claimed that
since the HPE price for CPO is inclusive of international transportation costs
and since the purpose of the adjustment of the domestic price of CPO to the
level of the international price of CPO is to arrive at an undistorted price of
domestic CPO, the HPE price for CPO should be adjusted downwards to exclude
transportation costs.

(86)     This claim must be
rejected. The Commission was considering a number of alternatives for the
selection of a most suitable price which should be used as an international
reference price. It needs to be reminded that the Indonesian authorities
themselves use the HPE price as a benchmark to calculate the monthly level of
export duties. The HPE price as defined by the Indonesian authorities was
therefore deemed to be the most appropriate international reference price to be
used as a benchmark for establishing the level of distortion of the costs of
production of biodiesel in Indonesia.

(87)     Two parties submitted that
the Commission failed to take into account that they manufacture biodiesel from
feedstock which is different than CPO i.e. Palm Fatty Acid Distillate (“PFAD”),
Refined Palm Oil (“RPO”) or Refined Palm Stearin (“RST”). By failing to take
into account the parties’ usage of the actual raw material in their production
of biodiesel, the CPO adjustment (as described in recital (70)) was applied on
the incorrect raw material used and has therefore lead to an incorrect level of
the constructed normal value.

(88)     These claims must be
rejected. It has to be underlined that the Commission only replaced the cost of
CPO purchased, from related and unrelated suppliers, for the production of
biodiesel. As regards by-products such as PFAD, RPO and RST which result from
the processing of purchased CPO and which are also further processed to produce
biodiesel, no adjustments were made.

(89)     Three parties claimed that
the Commission failed to recognise that their purchase of CPO from related
companies should be treated equally to the in-house production and therefore no
adjustment pursuant to Art 2(5) should apply (as explained in recital (70)
above). The parties claim that transactions within the group were realised at
arm’s length and should therefore not be adjusted and replaced by an
international price. In addition, one exporting producer claimed that the
constructed normal value should be calculated on a monthly basis during the IP.

(90)     As the internal transfer
price cannot be considered reliable it is the Commission’s standard practice to
verify whether transactions between related parties are indeed made at arm’s
length. In order to so do the Commission compares the price between related
companies to the underlying market price. Since the underlying domestic market
price is distorted the Commission cannot make such verification. Therefore, the
Commission has to replace such an unreliable price with a reasonable price that
would be applicable under arm’s length in normal market conditions. In this
case, the international price. With regard to the claim for monthly
calculations for the constructed normal value, the information provided and
verified did not contain sufficiently detailed information to allow such a
calculation. Both claims were therefore rejected.

(91)     The Union Industry claimed
that the cost of the own produced CPO within the same legal entity should also
be adjusted under Article 2(5) of the basic Regulation as it is also
affected by the distortion resulted from the DET.

(92)     This claim must be
rejected. While the raw materials are being passed along the biodiesel
production process at various stages of refinery/processing, the costs of these
production stages can be treated as reliable as they are being realised within
the same legal entity and the issue of unreliable transfer pricing as described
above does not occur.

(93)     One exporting producer
claimed that the Commission should have deducted so called price allowances
from the constructed normal value. This claim cannot be accepted. The
constructed normal value was constructed on the basis of costs. It would
therefore be inappropriate to make any allowances on the basis of price
considerations.

3.2.        Export price

(94)     One party questioned the
establishment of the export price, claiming that both the hedging gains and
losses should be taken into account and alleging an inconsistent accounting
treatment of biodiesel hedging gains and losses.

(95)     The claim that both the
hedging gains and losses should be taken into account must be rejected. Article
2(8) of the basic Regulation clearly provides that the export price shall be
the price actually paid or payable for the product when sold for export,
regardless of any separate – albeit related – gain or loss linked to hedging
practices. Therefore, the methodology in recitals (66) and (67) of the provisional
Regulation are hereby confirmed.

(96)     The Commission acknowledges
that an inconsistent accounting treatment of the biodiesel hedging gains and
losses of one party occurred at the provisional stage. This claim is accepted
and the necessary corrections have been made.

(97)     In relation to recital (68)
of the provisional Regulation, one party claimed that the 5% profit margin used
for related trading companies located inside the Union results in an excessive
return on capital and overstates the profit that is usually incurred on sales
of biodiesel by unrelated traders. It claims that a typical return on capital
corresponds to a profit margin of 1.3% - 1.8%.

(98)     Given the absence of
cooperation by unrelated importers and given the fact that trading companies
are service businesses without significant capital investments rendering the
return on capital allegation above as irrelevant, the Commission rejects the
above claim and considers 5% profit margin to be reasonable in this case. Recital
(68) of the provisional Regulation is therefore confirmed.

(99)     In relation to recital (69)
of the provisional Regulation, one party claimed that the premium for
double-counting biodiesel should be added to the export price, given that this
is a mere implementation of the Italian law.

(100)   Even if the Commission would
accept this claim and add the premiums to the export price, the premiums would
have to be deducted again under Article 2(10)(k) in order to compare the export
price with the same normal value with due account taken for differences that
affect price comparability. Given that in Indonesia there is no premium for
double counting biodiesel, the higher export price in Italy would therefore not
be directly comparable. This claim is therefore rejected and recital (69) of
the provisional Regulation is hereby confirmed.

(101)   Following the definitive
disclosure this party repeated its claim. No substantial additional arguments
were however brought forward as to alter the Commission’s assessment. Therefore
recital (69) of the provisional Regulation remains confirmed.

(102)   After the final disclosure several
exporting producers drew the Commission’s attention to alleged clerical errors
in the dumping calculations. These claims were examined and, where warranted,
corrections were made to the calculations.

3.3.        Comparison

(103)   In the absence of any
comments regarding comparison, recitals (70) till (75) of the provisional
Regulation are hereby confirmed.

3.4.        Dumping margins

(104)   Taking into account the
adjustments made to the normal value and to the export price as set out in
recitals above, and in the absence of any further comments, the definitive
dumping margins, expressed as a percentage of the CIF Union frontier price,
duty unpaid, are as follows:

Company || Dumping margin

PT. Ciliandra Perkasa, Jakarta || 8.8%

PT. Musim Mas, Medan || 18.3%

PT. Pelita Agung Agrindustri, Medan || 16.8%

PT. Wilmar Bioenergi Indonesia, Medan and PT. Wilmar Nabati Indonesia, Medan || 23.3%

Other cooperating companies || 20.1%

All other companies || 23.3%

E. INJURY

1.           Union production and Union
industry

(105)   The
provisional Regulation, in recitals (80) to (82), defined the Union industry
and confirmed that three companies were excluded from the definition of the
Union industry due to their reliance on imports from the countries concerned,
that is to say that they imported significantly more biodiesel from the
countries concerned than they produced themselves.

(106)   Two further companies were
excluded from the definition of the Union industry as they had not produced
biodiesel during the investigation period.

(107)   Comments were received after
publication of the provisional Regulation that other companies should be
excluded from the definition of the Union industry for importing biodiesel from
the countries concerned, and also because of their relationship to exporting
producers in Argentina and Indonesia, thereby shielding themselves from the
negative consequences of dumping.

(108)   These
comments are rejected. After analysing the claim regarding relationships
between exporting producers and the Union industry it was found that a holding
company held shares in both an Argentinean exporting producer and a Union producer.

(109)   Firstly, these companies
were found to be openly competing with each other for the same customers on the
Union market, thereby showing that this relationship did not have any impact on
the business practices of either the Argentine exporting producer or the Union
producer.

(110)   Following definitive
disclosure, an interested party requested information as to the Commission’s
conclusion that Argentine exporters and the Union industry were competing for
the same clients on the European market. The investigation of Union producers,
and the investigation of Argentine exporters, showed this fact and no evidence
has been provided to substantiate any allegation that Argentine exporters and
Union producers had agreed not to compete in sales of biodiesel to end users.
The number of end users is relatively small and composed in the main of the
large oil refineries, which purchase both from Union producers and importers.

(111)   Secondly, the main centre of
interest of the Union producer referred to in recital (108) above was found to
be within the Union, in particular their production and related sales
activities as well as research activities. As a result, the conclusion was that
the relationship was not a reason to exclude this company from the definition of
the Union industry under Article 4(1)(a) of the basic Regulation.

(112)   The fact that some of the
Union industry has been importing biodiesel from the countries concerned is in
itself not enough to change the definition of the Union industry. As explained
in the provisional Regulation, the imports of the Union industry from the
countries concerned were made in self-defence. Furthermore, it was found that
the centre of interest of some Union producers who imported from the countries
concerned remained in the Union – these companies were producing more in volume
terms than they were importing and their research functions were carried out in
the Union.

(113)   One interested party alleged
that the Union industry should also contain those companies that were purchasing
biodiesel and blending it with mineral diesel, as these blends were also
product concerned. This claim is rejected. The product concerned is biodiesel, in
pure form or as included in a blend Therefore the producers of the product
concerned are producers of biodiesel and not the companies that mix the
biodiesel with the mineral diesel.

(114)   The definition of the Union
industry as set out in recitals (80) to (82) of the provisional Regulation is
therefore confirmed, along with the volume of production for the IP as set out
in recital (83) of the provisional Regulation.

2.           Union consumption

(115)   After provisional disclosure
the Union industry made a small correction to their sales for 2009, thereby
adjusting the Union consumption for that year. This correction does not change
the trend or the conclusions drawn from the data in the provisional Regulation.
Table 1 is corrected below. In the absence of any comments, recitals (84) to
(86) of the provisional Regulation are hereby confirmed.

Union consumption || 2009 || 2010 || 2011 || IP

Tonnes || 11 151 172 || 11 538 511 || 11 159 706 || 11 728 400

Index 2009 = 100 || 100 || 103 || 100 || 105

Source: Eurostat,
data from the Union industry

3.           Cumulative assessment of
the effects of the imports from the countries concerned

(116)   In recitals (88) to (90) of
the provisional Regulation the Commission determined that the conditions were
met for cumulative assessment of the effects of imports from Argentina and
Indonesia. This was challenged by one interested party who alleged that PME
from Indonesia was not competing with biodiesel made in the Union on the same
basis as SME from Argentina, and that PME was cheaper than Union produced
biodiesel as the raw material (or ‘feedstock’) was cheaper than the feedstock
available in the Union.

(117)   These arguments are
rejected. Both SME and PME are imported into the Union, and are also
manufactured within the Union, and are blended with RME and other biodiesels
manufactured within the Union before being sold or blended with mineral diesel.
The blenders have the choice of purchasing biodiesel from different feedstocks
and different origins to produce their final product, based on the market and
the climatic conditions throughout the year. PME is sold in larger quantities
during the summer months and smaller quantities during the winter months, but
it is still in competition with RME and Union made biodiesel and also SME from
Argentina.

(118)   Recital (90) of the
provisional Regulation is therefore confirmed.

4.           Volume, price and market
share of dumped imports from the countries concerned

(119)   One interested party
challenged the import data set out in table 2 of the provisional Regulation,
stating that imports from Indonesia were much lower than presented in the table.
Import data in table 2 was based on Eurostat data, which was checked carefully
and found to be correct, and in line with the data collected from Indonesian
exporters. Biodiesel is a relatively recent product, and the customs codes applicable
to imports of biodiesel have changed over recent years. Therefore, when
extracting data from Eurostat, codes applicable at the time must be used in
order to ensure that the data is accurate. This explains why the interested
party’s extraction of data is incomplete and it shows lower imports than the
full dataset presented in table 2.

(120)   Given the small change in
the Union consumption in Table 1, the market share for Argentina for 2009 in
Table 2 has also slightly changed, while for Indonesia there was no change. This
does not change the trends of the data or the conclusions drawn from them. The
market share is corrected below.

|| 2009 || 2010 || 2011 || IP

Imports from Argentina || || || ||

Market share || 7.7% || 10.2% || 12.7% || 10.8%

Index 2009 = 100 || 100 || 135 || 167 || 141

Source: Eurostat

5.           Price undercutting

(121)   As set out in recitals (94)
to (96) of the provisional Regulation, in order to determine price
undercutting, the price of imports from Argentina and Indonesia was compared to
the sales price of the Union industry, using data from the sampled companies.
In this comparison the biodiesel imported by the Union industry for resale was
excluded from the calculations of price undercutting.

(122)   Interested parties noted
that the methodology used, being a comparison of the Cold Filter Plugging Point
("CFPP"), was not the same as used in a previous anti-dumping
investigation involving biodiesel from the USA, where the comparison was made
on feedstock.

(123)   Unlike the exporting
producers in Argentina and Indonesia, the Union industry does not sell
biodiesel made from one feedstock, but blends several feedstocks together to
produce the final biodiesel that is sold. The final customer is not aware of,
nor concerned by, the composition of what they are purchasing once the product
meets the required CFPP. What matters for a customer is the CFPP irrespective
of which feedstock is used. In these circumstances, it was found to be
appropriate in this proceeding to make the price comparison on the basis of the
CFPP.

(124)   For imports from Indonesia,
which are at a CFPP of 13 or above, an adjustment was made, being the
difference in price between the Union industry’s sales of CFPP 13 and the Union
industry’s sales of CFPP0, in order to compare the CFPP 13 and above from
Indonesia with the CFPP0 manufactured and blended in the EU. One Indonesian exporting
producer noted that as the sales of CFPP13 by the Union industry were made in
small quantities per transaction, that these prices should be compared to
similar sized transactions of CFPP0. On inspection of transactions of CFPP0 of
a similar quantity per transaction, the difference in price found was in line
with the difference using all transactions of CFPP0, with differences in price
both above and below the average price difference. As a result there was no
change to the level of price undercutting found in the provisional Regulation
in recital (97).

(125)   One Indonesian exporting
producer requested that the Commission disclose the full Product Control Number
(‘PCN’) of the blends sold by the Union industry – the percentages of each
feedstock in the sale made by the Union industry of their own production. Given
that the comparison for injury purposes was made solely on the basis of the
CFPP, this request was denied.

(126)   One interested party claimed
that there was a difference in price between biodiesel that met the criteria
set out in the Renewable Energy Directive (‘RED certified’) and biodiesel that
did not. They claimed that as imports from Indonesia were not RED certified,
and that the price quoted for RED certified biodiesel was higher, an adjustment
should be made.

(127)   This claim was rejected. Almost
all imports from Indonesia during the IP were RED certified. In any case,
member states implemented the sustainability criteria set out in the RED into
their national legislation only during the course of 2012, so during most of
the IP whether biodiesel was RED certified or not had no effect.

(128)   Following definitive
disclosure, one Indonesian exporting producer commented on the price
undercutting calculations and claimed that PME imports from Indonesia should be
compared to all sales of the Union industry. In fact the undercutting
calculation has been to compare sales of PME from Indonesia with all sales of
the Union industry at CFPP0, by increasing the price of Indonesian PME imports
by a price factor calculated by comparing the CFPP0 sales of the Union industry
with the CFPP13 sales of the Union industry. The claim is therefore rejected.
The claim of the same interested party that the injury calculations included
imported product is factually incorrect and is therefore rejected. In any case
imported biodiesel and EU produced biodiesel were blended together and sold at
the same price as blends that did not include any imported biodiesel.

(129)   One Indonesian exporting
producer also challenged the calculation of post-importation costs. However,
these costs were verified as the actual costs of importation of biodiesel minus
delivery costs to the final destination and no change is necessary.

6.           Macroeconomic indicators

(130)   As set out in recital (101)
of the provisional Regulation, the following macroeconomic indicators were
analysed, based on data received covering the entire Union industry:
production, production capacity, capacity utilisation, sales volume, market
share, growth, employment, productivity, magnitude of the dumping margin and
recovery from past dumping.

(131)   Following provisional
disclosure the Union industry noted that the capacity data that had been used
in Table 4 of the provisional Regulation included capacity that had not been dismantled,
but was not in such a state that it would have been available for use during
the IP, or previous years, to manufacture biodiesel. They separately identified
this capacity as ‘idle capacity’ which should not be counted as capacity
available for use. The capacity utilisation figures in Table 4 were therefore
understated. After close scrutiny of this resubmitted data, it was accepted and
Table 4 is restated below. The capacity utilisation rate, which had been from
43% to 41% in the provisional Regulation, was now 46% to 55%. The Union
industry also corrected the production data for 2009 to produce the table below:

|| 2009 || 2010 || 2011 || IP

Production capacity (tonnes) || 18 856 000 || 18 583 000 || 16 017 000 || 16 329 500

Index 2009 = 100 || 100 || 99 || 85 || 87

Production volume (tonnes) || 8 729 493 || 9 367 183 || 8 536 884 || 9 052 871

Index 2009 = 100 || 100 || 107 || 98 || 104

Capacity utilisation || 46% || 50% || 53% || 55%

Index 2009 = 100 || 100 || 109 || 115 || 120

(132)   Recital (103) of the
provisional Regulation analysed the previous capacity utilisation data, noting
that production increased while capacity remained stable. With the revised data
production still increases, but useable capacity decreased during the same
period. This shows that the Union industry was reducing available capacity in
face of increased imports from Argentina and Indonesia and thereby reacting to
market signals. This revised data is now more in line with the public
statements of the Union industry and Union producers, stating that during the
period under consideration production was stopped in several plants and that
the capacity that had been installed was not immediately available for use, or
only available for use with significant re-investment.

(133)   Several interested parties
questioned the revised capacity and capacity utilization data. However, no
alternatives were provided by any interested party. The revision is based on
the revised capacity data provided by the complainant, covering the entire
Union industry. The revised data was cross-referenced to publicly available
data concerning in particular idle capacity as well as capacity of producers
that ceased operations due to financial difficulties. As explained above in
section 6, ‘Macroeconomic indicators’, the revised data provide a more accurate
dataset of capacity available to produce biodiesel during the period under
consideration than the dataset originally provided and published in the
provisional Regulation.

(134)   One interested party stated
that the Union industry was not injured, as production volumes rose in line
with consumption. This argument is rejected, as other important injury
indicators clearly point to the existence of injury, in particular the loss of
market share to imports from the countries concerned and the reduced profitability
trend leading to losses.

(135)   Another interested party argued
that the Union industry was not injured if comparing trends only between 2011
and the IP as opposed to comparing the trends during the period from 1 January
2009 to the end of the IP (‘the period considered’). Given that the IP covers
half of 2011, a comparison between 2011 and IP is not accurate. Besides, for a
comparison to be meaningful it is necessary to examine the trends relevant for
the injury assessment during a period which is long enough as it was done in
the present case. This claim is therefore rejected.

(136)   The same interested party
noted that the Commission had not published the total sales value of the Union
industry in the provisional Regulation and requested that this figure be
published. However, all relevant factors mentioned in Article 3(5) of the basic
Regulation were examined, allowing a full assessment of injury. Sales value was
collected, and verified, from sampled companies, who were representative of the
Union industry as a whole.

(137)   The same party also noted
that the Union industry was able to increase employment and therefore there was
no negative effect on the Union industry during the period of investigation.

(138)   However as explained in
recital (106) of the provisional Regulation, employment in this capital
intensive industry is relatively low. Therefore, small variations in the
numbers can cause a large movement in the indexed data. The increase in overall
employment does not negate the injury suffered by the Union industry as shown
by other indicators.

(139)   In the absence of any
further comments, recitals (103) to (110) of the provisional Regulation are
hereby confirmed.

7.           Microeconomic indicators

(140)   As set out in recital (102)
of the provisional Regulation, the following microeconomic indicators were
analysed, based on data verified at the sampled Union producers: average unit prices, unit
cost, labour costs, inventories, profitability, cash flow, investments, return
on investments and ability to raise capital.

(141)   In the absence of any
relevant comments, recitals (111) to (117) of the provisional Regulation are
hereby confirmed.

8.           Conclusion on injury

(142)   Several parties contested
the conclusion on injury put forward in the provisional Regulation on the basis
that between the year 2011 and the IP some indicators appeared to have improved.
While it is true that some indicators showed an upward trend between 2011 and
the IP (e.g., production and sales), the industry was not in a position to pass
on cost increases during this period as noted in recital (111) of the
provisional Regulation. This resulted in a further worsening of the industry's
position from losses of 0.2% in 2011 to losses of 2.5% in the IP. Therefore, it
is considered that, even if the injury analysis were to be limited to the
period 2011-IP, the industry would still be found to have suffered material
injury.

(143)   In the absence of other
comments, recitals (118) to (120) of the provisional Regulation are hereby
confirmed.

F. CAUSATION

1.           Effect of the dumped
imports

(144)   One interested party claimed
that imports from Argentina could not be a cause of injury, as import volumes
have remained stable from 2010 to the end of the IP, decreasing slightly from
2011 to the end of the IP.

(145)   This data was taken from
Table 2 of the provisional Regulation and is accurate. However the Commission’s
analysis runs from the start of the period considered to the end of the IP and
on that basis imports have risen by 48%, with an increase of 41% in market
share. In addition, as explained in recital (90) of the provisional Regulation,
not only imports from Argentina but also imports from Indonesia were taken into
account.

(146)   Taking a year-on-year price
comparison, the same interested party noted that prices of imports from
Argentina rose at a faster pace than the sales prices of the Union industry.
However, imports from Argentina still undercut those of the Union industry,
which would explain why the Union prices could not rise as quickly.

(147)   In the absence of any other
comments as regards the effect of the dumped imports, recitals (123) to (128)
of the provisional Regulation are hereby confirmed.

2.           Effect of other factors

2.1.        Imports from third countries
other than the countries concerned

(148)   In the absence of comments,
the conclusion that imports from other countries did not cause injury, as set
out in recital (129) of the provisional Regulation is confirmed.

2.2.        Non-dumped imports from the
countries concerned

(149)   Following the application of
Article 2(5) as mentioned in recitals (38) and (70) above, no non-dumped
imports from the countries concerned were found. Therefore, recital (130) of
the provisional Regulation is revised accordingly.

2.3.        Other Union producers

(150)   In the absence of any
comments recital (131) of the provisional Regulation is hereby confirmed.

2.4.        Imports made by the Union
industry

(151)   As set out in recitals (132)
to (136) of the provisional Regulation, the Union industry imported significant
quantities of biodiesel from the countries concerned during the period
considered, up to 60% of all imports in the IP from those countries.

(152)   One interested party alleged
that these imports, far from being in self-defence, were part of a ‘carefully
matured long-term strategy’ by the Union industry to invest in, and source
biodiesel from, Argentina.

(153)   They also allege that there
has never been an economic rationale to import soya bean oil into the EU and
process it into biodiesel within the EU, and that it is only economically
feasible to process the soya bean oil in Argentina and export the resulting
biodiesel.

(154)   These claims should be
rejected. No evidence of such a ‘long-term strategy’ has been provided and this
has been denied by the Union industry. Clearly if the strategy of the Union
industry was to supplement their biodiesel production by producing in Argentina
and importing the finished product, it would be nonsensical and illogical to
then launch a complaint against such imports.

(155)   One interested party
repeated that the imports of biodiesel by the Union industry, that were made in
self-defence, were in fact made as part of a long-term commercial strategy.
This allegation, which was not substantiated, is rejected. No evidence beyond
mere allegations has been provided of such a strategy. Also, it would seem
illogical for the concerned Union producers to support the complaint and, in
some cases, to have increased its capacity in the EU while at the same time
have a strategy to fulfil production needs by imports.

(156)   The same interested party also
argued that the market share of the Union industry should be calculated by
including their imports made in self-defence. This submission was rejected as
market share calculations have to reflect the sales of the Union industry of
goods they produced themselves and not their trading activities in the finished
product made in the face of increasing volumes of dumped imports.

(157)   The Union industry has also
shown that in previous years the importation of soya bean oil – and palm oil –
for processing into biodiesel was economically viable. No evidence of the
contrary was provided by the interested party. Only with the distortive effect
of the differential export tax which makes the export of biodiesel cheaper than
the raw materials does import of the finished product become economically
sensible.

(158)   One interested party alleged
that these imports were a cause of injury because only the Union industry had
the capacity to blend the SME from Argentina and PME from Indonesia with Union produced
biodiesel for resale to diesel refiners. This allegation is incorrect. Blending
is a simple operation that many trading companies are capable of doing in their
storage tanks. No evidence was provided that only the Union producers are
capable of such blending and as such the allegation was rejected.

(159)   One Indonesian exporting
producer further claimed that imports by the Union industry were not made in
self-defence and compared data for the calendar year 2011 with data from the
IP, which contains 6 months of the same year. A comparison between the two is
therefore not accurate without being able to split the IP into two halves.
Therefore this argument is rejected.

(160)   In the absence of any other comments
as regards the exports by the Union industry, recitals (132) to (136) of the
provisional Regulation are hereby confirmed.

2.5.        Capacity of the Union
industry

(161)   Recitals (137) to (140) of
the provisional Regulation noted that the capacity utilisation of the Union
industry remained low throughout the period under consideration, but that the
situation of the sampled companies deteriorated during the period while their
capacity utilisation did not decrease by the same amount.

(162)   The provisional conclusion
was therefore that the low capacity utilisation rate, as a constant feature,
was not responsible for the injury caused to the Union industry.

(163)   One interested party
commented on the data in the provisional Regulation, noting that even in the
absence of any imports at all capacity utilisation of the Union industry would
only have been 53% during the IP. They also point to the increase in production
capacity from 2009 to the end of the IP which has led to a reduction in
capacity utilisation during the period under consideration.

(164)   However, the party did not provide
any evidence to show that this low capacity utilisation was causing injury to
such an extent as to break the causal link between the dumped imports and the
deterioration of the situation of the Union industry. Fixed costs represent only
a small proportion (roughly 5%) of total production costs, which shows that the
low capacity utilisation was only one factor of injury, but not a decisive one.
Also, one of the reasons for this low capacity utilisation rate is the fact
that the Union industry, due to the particular market situation, imported the
finished product itself.

(165)   In addition, following the
inclusion of the revised data on capacity and utilisation, the Union industry
decreased capacity during the period considered, and increased capacity utilisation,
from 46% to 55%. This shows that the capacity utilisation of the Union industry
would be significantly higher in the absence of dumped imports than the 53%
mentioned above.

(166)   Following definitive
disclosure, several interested parties cast doubt on the conclusion that low
capacity utilisation was not the decisive factor causing injury. It was alleged
that fixed costs in the biodiesel industry were much higher than the small
proportion given above. However they gave no evidence to support this allegation
and so it is rejected. In any case fixed costs do not bear any relation to
capacity utilisation rates. Verification of the sampled companies gave a fixed
cost to total cost of production ratio that was between 3% and 10% during the
IP.

(167)   It was also alleged in this
respect that the overcapacity of the Union industry was so high that even in
the absence of imports it would not be able to be adequately profitable. No
evidence was given for this allegation and the fact that the Union industry was
profitable in 2009 with a low capacity utilisation suggests that in the absence
of dumped imports, their profitability would be even higher.

(168)   In addition it was argued
that the reduction in capacity of the Union industry was in itself a cause of
injury due to the costs of closure of plants and reductions in capacity of
plants that continued to operate. This allegation was not substantiated and no
evidence was submitted to show that the costs of reducing capacity, or of
closing entire plants or companies, concerned significant amounts.

(169)   Finally it was alleged with
regard to the capacity that any company increasing biodiesel production
capacity during the period under consideration would be making an irresponsible
business decision. No evidence was provided for this allegation. In addition
the fact that some companies were able to increase their capacity in the face
of increasing imports of dumped biodiesel from Argentina and Indonesia shows
the demand on the market for their particular products.

(170)   The revised macroeconomic
indicators also show that companies were during the period taking capacity out
of possible use, and closer to the end of the IP were starting a process of
closing plants that are no longer viable. Also increases in capacity on a
company-by-company level are mainly due to the expansion of so-called ‘second
generation’ biodiesel plants, manufacturing from waste oils or hydrogenated
vegetable oil (‘HVO’). Therefore the Union industry was, and is, in the process
of rationalising their capacity to meet the Union’s demands.

(171)   In the absence of any further
comments as regards the capacity of the Union industry, recitals (137) to (140)
of the provisional Regulation are hereby confirmed.

2.6.        Lack of access to raw
materials and vertical integration

(172)   In the absence of any new
comments concerning access to raw materials, recitals (141) to (142) of the
provisional Regulation are hereby confirmed.

2.7.        Double-counting

(173)   Recitals (143) to (146) of
the provisional Regulation dealt with the allegation that the system of
‘double-counting’, where biodiesel made from waste oils counts twice towards
the blending mandates in some Member States, has caused injury to the Union
industry, or at least to those Union producers who manufacture biodiesel from
virgin oils.

(174)   One interested party
mentioned a comment by one Union producer that during 2011 they lost sales to
other producers who manufactured biodiesel eligible for double counting.

(175)   The negative impact on this
one producer was however limited, temporary and only relevant for a part of the
investigation period, as the double counting scheme was adopted in the Member
State in which the company is located only in September 2011. Given that the
financial performance of the sampled companies declined after September 2011,
and this company was included in the sample, double counting cannot be
considered a source of injury.

(176)   As the Union industry is composed
of both companies producing biodiesel from waste oils and benefiting from
double-counting in some Member States, and also of companies producing biodiesel
from virgin oils, the movement in demand remains within the Union industry. Due
to a finite supply of used oils which are needed for manufacturing double
counting biodiesel, a large increase in production of double-counting biodiesel
is difficult. Therefore, there is still a strong demand for first generation
biodiesel. No significant imports of biodiesel eligible for double-counting was
found during the investigation period, thereby confirming that double-counting
is shifting the demand within the Union industry and not generating demand for
imports. The Commission received no data from the interested party to show that
double counting biodiesel had caused the price of virgin oil biodiesel to fall
during the period under consideration. In fact data shows that double counting
biodiesel has a small price premium over virgin biodiesel, the price of which
is linked to mineral diesel.

(177)   The decline in performance
of the Union industry, which is composed of both types of producers, cannot be attributed
to the double-counting regime in force in some Member States. In particular,
the fact that companies in the sample producing double-counted biodiesel are
also showing a decline in performance, as mentioned in recital (145) to the
provisional Regulation, shows that injury caused by dumped imports is being
suffered across the industry.

(178)   Several interested parties
argued after definitive disclosure that the amounts of double-counted biodiesel
were underestimated. However, the amounts of double-counted biodiesel available
on the EU market were limited in relation to the total sales of biodiesel
during the period under investigation. Also, should a member state have
double-counting in force, the biodiesel that complies to be counted as
double-counted is produced in the EU and therefore demand remains within the
Union industry. No new evidence was provided that would change this conclusion.

(179)   In the absence of any new
comments concerning regulatory factors, recitals (143) to (146) of the
provisional Regulation are hereby confirmed.

2.8.        Other regulatory factors

(180)   Recitals (147) to (153) of
the provisional Regulation address allegations by interested parties that
restrictions in Member States, such as quota systems and tax regimes, were
designed to restrict imports from the countries concerned, meaning that any
injury caused to the Union industry, in particular in some Member States, could
not be due to imports.

(181)   These arguments were
provisionally rejected, among other things because dumped imports from
countries concerned are present in most Member States. Besides, after being
imported to one Member State, these imports could be transported and sold in
other Member States as well.

(182)   One interested party noted
the small amount of Argentine biodiesel cleared through French customs controls
in 2011, and also the small amount declared as being imported into Germany in
the same period.

(183)   Firstly, as explained above,
biodiesel cleared through customs in one Member State may well be sold in
another Member State, making such data unreliable. Second, the sampled
companies in France and Germany both were able to demonstrate the price
competition between their production and imports from the countries concerned,
and the injury that they were suffering as a result.

(184)   Another interested party
claimed that the withdrawal of schemes designed to benefit the biodiesel
industry in many Member States lowered the revenue of biodiesel companies
during the period considered, thus leading to injury. They point to in
particular the gradual withdrawal of tax incentives in France, and taxes on
‘green fuels’ in Germany.

(185)   However, there is no obvious
coincidence in time between these changes and the deterioration in the
financial performance of the Union industry. Many of these incentives were
directed at users of biodiesel, not manufacturers, and most were still in force
during the IP. No evidence has been provided to show that the changes in policy
of Member States, moving as they have to mandatory blending requirements, has
caused injury to the Union industry.

(186)   One Indonesian exporting
producer noted the ongoing DG Competition investigation into alleged submission
of distorted prices by contributors to Platts oil and biofuels products
assessed prices and requested that the subject this investigation be considered
as a possible cause of injury. This claim was denied as the investigation is
ongoing and no findings have been published.

(187)   In the absence of any new
comments as regards the policies of member states, recitals (147) to (153) of
the provisional Regulation are hereby confirmed.

3.           Conclusion on causation

(188)   Imports of product concerned
from the countries concerned were dumped during the IP and undercut the sales
of the Union industry. There is a clear coincidence in time between the
increasing volumes of dumped imports and the deterioration of the situation of
the Union industry. The dumped imports were in direct competition with the
Union industry’s production and as a result the Union industry lost
profitability and market share during the period under consideration. Whereas
it is possible that other factors mentioned above have affected the performance
of the Union industry to a certain extent, the fact remains that dumped imports
from the countries concerned are causing injury to the Union industry.

(189)   No new evidence was provided
to change that conclusion that the effect of other factors, considered
individually or collectively, was not such as to break the causal link between
the dumped imports and the injury suffered by the Union industry. In the
absence of any other comments regarding the conclusion on causation, recitals (154)
to (157) of the provisional Regulation are hereby confirmed.

G. UNION INTEREST

1.           Interest of the Union
industry

(190)   In the absence of any
comments regarding the interest of the Union industry, recitals (159) to (161)
of the provisional Regulation are hereby confirmed.

2.           Interest of unrelated
importers and traders

(191)   One Indonesian exporting
producer alleged that the proposed duties would have a negative impact on
importers and traders, but provided no evidence for their allegation. In fact
their claim stated the opposite, which was that the duty could be passed on to
users and consumers in higher prices which would presumably lead in fact to no
impact whatsoever on importers and traders.

(192)   No comments were received
from any importers or traders of biodiesel after the publication of provisional
measures.

(193)   In the absence of any
additional new comments as regards the interest of unrelated importers/traders,
recitals (162) to (163) of the provisional Regulation are hereby confirmed.

3.           Interest of users and
consumers

(194)   One Indonesian exporting
producer alleged that the proposed duties would increase the price of
biodiesel, and therefore reduce the incentive for consumers to buy vehicles
that operate on biofuels.

(195)   This allegation is rejected.
The main application of biodiesel is to be blended into mineral diesel for sale
to consumers, so that they do not need to buy a special vehicle that can run on
pure biofuels.

(196)   Although the price of the
biodiesel element would rise, if that biodiesel was imported from Argentina or
Indonesia, as stated in the provisional Regulation, given that the proportion
of biodiesel in the diesel sold to consumers is small, the increase in price is
also small and not noticeable to the consumer.

(197)   The possible effect of the
measures on the final price of diesel to the consumer, which are expected to be
small as set out above, will not undermine the objectives of the Renewable
Energy Directive (‘RED’).

(198)   No users or consumers, or
groups or associations representing users or consumers, commented on the
provisional Regulation.

(199)   In the absence of any
additional comments regarding the interest of consumers, recitals (164) to (166)
of the provisional Regulation are hereby confirmed.

4.           Interest of suppliers of
raw materials

(200)   In the absence of any
comments regarding the interest of raw material suppliers, recitals (167) to
(169) of the provisional Regulation are hereby confirmed.

5.           Conclusion on Union
interest

(201)   No comments were received
that would change the analysis of the Union interest as set out in the
provisional Regulation, and therefore it is still in the Union interest that
measures be imposed. Therefore, recitals (170) to (171) of the provisional
Regulation are hereby confirmed.

H. DEFINITIVE ANTI-DUMPING MEASURES

1.           Injury elimination level

(202)   Several interested parties
contested the use of 15% as the target profit for the Union industry as set out
in recital (175) of the provisional Regulation, stating that this was
unrealistically high for the Union biodiesel industry to expect.

(203)   However most of these
interested parties then suggested replacing the target profit of 15% with other
data from other time periods, or from other investigations, without explaining
why one time period, or one investigation, was more appropriate than another.

(204)   As explained in the
provisional Regulation, the profit margin of 15% was the profit, expressed as a
percentage of turnover, that the Union industry achieved in the absence of
dumped imports between 2004 and 2006. This was the last period where profit was
made in the absence of dumped imports as since 2006 they have always been
present on the Union market, first from the USA and then from Argentina and
Indonesia.

(205)   However, the Union biodiesel
market has matured significantly since 2004-2006 in many respects. Between 2004
and 2006, dumped imports had a negligible market share and other imports were
also low. During the IP dumped imports had a market share of 19%. During the
period 2004-2006 the Union industry consisted of 40 companies, and now this has
expanded to over 200, which has raised the level of competition.

(206)   Between 2004 and 2006
consumption rose dramatically from 2 million MT to 5 million MT, whereas in the
period under consideration consumption rose only slightly, and capacity
utilisation, which was 90% between 2004 and 2006, was 55% in the IP.

(207)   As a consequence, it is
considered appropriate to take into account the market developments described
above and to adjust target profit accordingly as to reflect the profit that the
Union industry could expect to achieve under current market conditions.

(208)   Therefore rather than taking
the percentage profit, the actual profit for these three years in EUR per MT
sold has been calculated. For each year this has been taken to reflect 2011
prices and then averaged. Expressed as a percentage of turnover, the target
profit for the Union industry in the IP is 11.0%.

(209)   The injury elimination
margin has therefore been recalculated on this basis.

(210)   Following definitive disclosure,
with regard to the calculation of the injury margin, one interested party
argued that the 5.1% import duty to which RBD palm oil imported into the EU is
subject, should be removed from the cost of production of the EU producers.
This argument is rejected as this duty represents a cost for EU producers which
import palm oil and should therefore be taken into account.

(211)   One Indonesian exporting
producer challenged the calculation of target profit of the Union industry and
the use of data from 2004 to 2006 and then made a suggestion for calculation of
the target profit using only the year 2004. However, the previous investigation
against imports from the United States determined that an average of the three
years was more accurate than using 2004 alone. No arguments were brought
forward that would lead to a different conclusion.

(212)   Following definitive
disclosure the complainants argued that the target profit of 15% as proposed at
provisional stage should be maintained. However the arguments brought forward
by the complainants do not relate to the objective for which target profit is
to be established, i.e. profit that was realized by the UI in the absence of
dumped imports. Their argument is therefore rejected.

(213)   In the absence of other comments
concerning the injury elimination level, the methodology described in recitals
(176) to (177) of the provisional Regulation is hereby confirmed.

2.           Definitive measures

(214)   In view of the conclusions
reached with regard to dumping, injury, causation and Union interest, and in
accordance with Article 9(4) of the basic Regulation, definitive anti-dumping
measures should be imposed on imports of the product concerned at the level of
the lower of the dumping and the injury margins, in accordance with the lesser
duty rule.

(215)   Anti-dumping
duty rates have been established by comparing the injury elimination margins
and dumping margins. Consequently, the definitive anti-dumping duty rates,
expressed on the CIF Union border price, customs duty unpaid, are as follows:

Country || Company || Dumping margin || Injury margin || Anti-dumping duty rate

Argentina || Aceitera General Deheza S.A., General Deheza, Rosario; Bunge Argentina S.A., Buenos Aires || 41.9% || 22.0% || 22.0% (216.64€)

|| Louis Dreyfus Commodities S.A., Buenos Aires || 46.7% || 24.9% || 24.9% (239.35€)

|| Molinos Río de la Plata S.A., Buenos Aires; Oleaginosa Moreno Hermanos S.A.F.I.C.I. y A., Bahia Blanca; Vicentin S.A.I.C., Avellaneda || 49.2% || 25.7% || 25.7% (245.67€)

|| Other cooperating companies || 46.8% || 24.6% || 24.6% (237.05€)

|| All other companies || 49.2% || 25.7% || 25.7% (245.67€)

Indonesia || PT. Ciliandra Perkasa, Jakarta || 8.8% || 19.7% || 8.8% (76.94€)

|| PT. Musim Mas, Medan || 18.3% || 16.9% || 16.9% (151.32€)

|| PT. Pelita Agung Agrindustri, Medan || 16.8% || 20.5% || 16.8% (145.14€)

|| PT Wilmar Bioenergi Indonesia, Medan; PT Wilmar Nabati Indonesia, Medan || 23.3% || 20.0% || 20.0% (174.91€)

|| Other cooperating companies || 20.1% || 18.9% || 18.9% (166.95€)

|| All other companies || 23.3% || 20.5% || 20.5% (178.85€)

(216)   However
as the anti-dumping duty will also apply to blends that include biodiesel (in
proportion to their biodiesel content by weight), as well as to pure biodiesel,
it will be more accurate, and more appropriate for the correct implementation
of the duty by Customs authorities of the Member States, to express the duty as
a fixed amount in Euro per tonne net and apply this to the pure biodiesel
imported, or the proportion of biodiesel in the blended product.

(217)   Recital
(183) of the provisional Regulation noted that imports of biodiesel from the
countries concerned was subject to registration, so that if necessary duties
could be collected up to 90 days prior to the imposition of provisional
measures.

(218)   This
collection of duties on registered products is only possible if the conditions
set out in Article 10(4) of the basic Regulation are met. Having checked the
import statistics for imports made after registration, rather than seeing a
further substantial rise in imports before the imposition of provisional
measures, imports dropped significantly. The conditions are therefore not met
and no duties will therefore be collected on registered imports.

(219)   The
individual company anti-dumping duty rates specified in this Regulation were
established on the basis of the findings of the present investigation.
Therefore, they reflect the situation found during that investigation with
respect to these companies. These duty rates (as opposed to the country-wide
duty applicable to 'all other companies') are thus exclusively applicable to
imports of product concerned originating in the countries concerned and
produced by the companies and thus by the specific legal entities mentioned.
Imported product concerned produced by any other company not specifically
mentioned in the operative part of this Regulation, including entities related
to those specifically mentioned, cannot benefit from these rates and shall be
subject to the duty rate applicable to 'all other companies'.

(220)   Any claim requesting the
application of these individual company anti-dumping duty rates (e.g. following
a change in the name of the entity or following the setting-up of new
production or sales entities) should be addressed to the Commission[12] forthwith with all relevant
information, in particular any modification in the company's activities linked
to production, domestic and export sales associated with, for example, that
name change or that change in the production and sales entities. If
appropriate, the Regulation will accordingly be amended by updating the list of
companies benefiting from individual duty rates.

(221)   All
parties were informed of the essential facts and considerations on the basis of
which it was intended to recommend the imposition of a definitive anti-dumping
duty on imports of biodiesel originating in Argentina and Indonesia and the
definitive collection of the amounts secured by way of the provisional duty (definitive
disclosure). All parties were granted a period within which they could make
comments on the definitive disclosure.

(222)   The oral and written
comments submitted by the interested parties were considered and taken into
account where appropriate.

3.           Undertakings

(223)   Two Indonesian exporting
producers offered similar price undertakings in accordance with Article 8(1) of
the Basic Regulation. It is noted that in view of the significant price
variations of the raw material, the product is not considered suitable for a
fixed price undertaking. In this context both companies proposed that the
minimum import prices (MIPs) are indexed regularly in relation to the
fluctuations of the prices of the crude palm oil (CPO) by applying a
coefficient to this raw material cost.

(224)   In relation to the offers of
two exporting producers, it is noted that in order to establish a meaningfully
indexed MIP, this should take into account the numerous additional parameters
that play a significant role and demonstrate the volatility of the biodiesel
market. Biodiesel is a highly volatile market and the biodiesel business is
influenced by various additional factors such as the complexity of the biodiesel
trading system, the price differential between gasoil and biodiesel, the
volatility and evolution of the vegetable oil markets and the interdependence
of the different types of vegetable oils as well as the evolution of the
USD/EUR exchange rate. Such factors would require a very complex, multiple
indexation on a daily basis for it to be suitable. Therefore the mere
indexation only on CPO prices on a monthly basis, as offered, is considered
inappropriate and will not achieve the desired result.

(225)   In addition, important cross-compensation
risks were identified with regard to these Indonesian exporters and their
customers as other products besides biodiesel, are also exported to the EU as
well as due to the usual practice in this business of loans and swaps of
biodiesel, CPO or indeed other products between companies.

(226)   Therefore the above factors
render the effective implementation and monitoring of undertakings extremely
burdensome if not impracticable. Consequently for the reasons stated above,
these undertaking offers cannot be accepted.

4.           Definitive collection of
provisional anti-dumping duties

(227)   Following definitive
disclosure, one interested party claimed that at provisional stage some
clerical mistakes occurred in the calculation of the dumping margins and that,
in the absence of such mistakes, the dumping margins would have been de
minimis. As a consequence, that interested party requested that no provisional
anti-dumping duties should be collected. This claim must be rejected as the
definitive anti-dumping duty is clearly higher than the provisional duty.

(228)   In view of the dumping
margins found and given the level of the injury caused to the Union industry,
the amounts secured by way of the provisional anti-dumping duty, imposed by the
provisional Regulation, should be definitively collected,

HAS ADOPTED THIS REGULATION:

Article 1

1.           A definitive anti-dumping
duty is hereby imposed on imports of fatty-acid mono- alkyl esters and/or
paraffinic gasoils obtained from synthesis and/or hydro-treatment, of
non-fossil origin, in pure form or as included in a blend, currently falling
within CN codes ex 1516 20 98 (TARIC codes 1516 20 98 21, 1516 20 98 29 and
1516 20 98 30), ex 1518 00 91 (TARIC codes 1518 00 91 21, 1518 00 91 29 and
1518 00 91 30), ex 1518 00 95 (TARIC code 1518 00 95 10), ex 1518 00 99 (TARIC
codes 1518 00 99 21, 1518 00 99 29 and 1518 00 99 30), ex 2710 19 43 (TARIC
codes 2710 19 43 21, 2710 19 43 29 and 2710 19 43 30), ex 2710 19 46 (TARIC
codes 2710 19 46 21, 2710 19 46 29 and 2710 19 46 30), ex 2710 19 47 (TARIC
codes 2710 19 47 21, 2710 19 47 29 and 2710 19 47 30), 2710 20 11, 2710 20 15,
2710 20 17, ex 3824 90 97 (TARIC codes 3824 90 97 01, 3824 90 97 03 and 3824 90
97 04), 3826 00 10 and ex 3826 00 90 (TARIC codes 3826 00 90 11, 3826 00 90 19
and 3826 00 90 30), and originating in Argentina and Indonesia.

2.           The rate of the definitive
anti-dumping duty applicable to the product described in paragraph 1 and produced
by the companies listed below, shall be as follows:

Country || Company || Duty rate Euro per tonne net || TARIC additional code

Argentina || Aceitera General Deheza S.A., General Deheza, Rosario; Bunge Argentina S.A., Buenos Aires || 216.64€ || B782

|| Louis Dreyfus Commodities S.A., Buenos Aires || 239.35€ || B783

|| Molinos Río de la Plata S.A., Buenos Aires; Oleaginosa Moreno Hermanos S.A.F.I.C.I. y A., Bahia Blanca; Vicentin S.A.I.C., Avellaneda || 245.67€ || B784

|| Other cooperating companies: Cargill S.A.C.I., Buenos Aires; Unitec Bio S.A., Buenos Aires; Viluco S.A., Tucuman || 237.05€ || B785

|| All other companies || 245.67€ || B999

Indonesia || PT Ciliandra Perkasa, Jakarta || 76.94€ || B786

|| PT Musim Mas, Medan || 151.32€ || B787

|| PT Pelita Agung Agrindustri, Medan || 145.14€ || B788

|| PT Wilmar Bioenergi Indonesia, Medan; PT Wilmar Nabati Indonesia, Medan || 174.91€ || B789

|| Other cooperating companies: PT Cermerlang Energi Perkasa, Jakarta || 166.95€ || B790

|| All other companies || 178.85€ || B999

3.           The anti-dumping duty on
blends shall be applicable in proportion in the blend, by weight, of the total
content of fatty-acid mono- alkyl esters and paraffinic gasoils obtained from
synthesis and/or hydro-treatment, of non-fossil origin (biodiesel content).

4.           In cases where goods have
been damaged before entry into free circulation and, therefore, the price
actually paid or payable is apportioned for the determination of the customs
value pursuant to Article 145 of Regulation (EEC) No 2454/93[13] the amount of anti-dumping
duty, calculated on the amounts set above, shall be reduced by a percentage
which corresponds to the apportioning of the price actually paid or payable.

5.           Unless otherwise
specified, the provisions in force concerning customs duties shall apply.

Article 2

The amounts secured by way of the
provisional anti-dumping duties imposed by Commission Regulation (EU) No 490/2013
on imports of biodiesel originating in Argentina and Indonesia shall be
definitively collected.

Article 3

Where any new exporting producer in Argentina
or Indonesia provides sufficient evidence to the Commission that:

— it did not export to the Union the
product described in Article 1(1) during the investigation period (1 July 2011
to 30 June 2012),

— it is not related to any of the exporters
or producers in Argentina or Indonesia which are subject to the measures
imposed by this Regulation,

— it has actually exported to the Union the
product concerned after the investigation period on which the measures are
based, or it has entered into an irrevocable contractual obligation to export a
significant quantity to the Union.

Article 1(2) may be amended by adding the
new exporting producer to the cooperating companies not included in the sample
and thus subject to the weighted average duty rate of the country concerned.

Article 4

This Regulation shall enter into force on
the day following that of its publication in the Official Journal of the
European Union.

This Regulation shall be binding
in its entirety and directly applicable in all Member States.

Done at Brussels,

For
the Council

The
President

[1]               OJ L 343, 22.12.2009, p. 51.

[2]               OJ L 141, 28.5.2013, p. 6.

[3]               OJ C 260, 29.8.2012, p. 8.

[4]               See for instance judgment T-235/08 of 7 February 2013
(Acron OAO and Dorogobuzh OAO against the Council)

[5]               Resolution 331/2001 of the Ministry of Agriculture,
Livestock and Fisheries.

[6]               The main market which is considered to determine the
level of the international price of soya beans and soya bean oil is Chicago
Board of Trade.

[7]               The FAS theoretical value is calculated by
discounting from the official FOB value all costs included in the export
process.

[8]               http://64.76.123.202/site/agricultura/precios_fob_-_exportaciones/index.php

[9]               Judgment T-235/08 of 7 February 2013 (Acron OAO and
Dorogobuzh OAO against the Council)

[10]             Panel Report, China – Anti-Dumping and
Countervailing Duty Measures on Broiler Products from the United States
(WT/DS427/R, adopted 25 September 2013), para. 7.164.

[11]             The HPE price is monthly set by the Indonesian
authorities since September 2011 and averages the price information from the
previous month from three different sources (i) CIF Rotterdam, (ii) CIF Malaysia,
and (iii) the Indonesian commodity exchange market. The HPE price is set on the
basis of the same sources but on a FOB basis. For the part of the IP before
September 2011 (July – August 2011) only the Rotterdam price was used as the
benchmark to establish the HPE for CPO.

[12]             European Commission, Directorate-General for Trade,
Directorate H, 1049 Brussels, Belgium.

[13]             Commission Regulation (EEC) No 2454/93 of 2
July 1993 laying down provisions for the implementation of Council Regulation
(EEC) No 2913/92 establishing the Community Customs Code (OJ L 253, 11.10.1993,
p. 1).