# EUR-Lex - 52013PC0014 - EN

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# 52013PC0014

**Proposal for a COUNCIL IMPLEMENTING REGULATION imposing a definitive anti-dumping duty on imports of bioethanol originating in the United States of America /* COM/2013/014 final - 2013/0009 (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 bioethanol
originating in the United States of America.

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 not imposed in
this case.

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

The attached proposal for a Council
Regulation is based on the definitive findings on dumping, injury, causation
and Union interest. It is therefore proposed that the Council adopt the
attached proposal for a Regulation which should be published no later than 22
February 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.

2013/0009 (NLE)

Proposal for a

COUNCIL IMPLEMENTING REGULATION

imposing a definitive anti-dumping duty on
imports of bioethanol originating in the United States of America

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(4) thereof,

Having regard to the proposal from the European
Commission (‘the Commission’) after consulting the Advisory Committee,

Whereas:

1.
PROCEDURE

1.1.
Initiation

(1)
On 25 November 2011, the European Commission
('the Commission') announced, by a notice ('NOI') published in the Official
Journal of the European Union[2], the
initiation of an anti-dumping proceeding ('AD proceeding' or 'the proceeding')
with regard to imports into the Union of bioethanol
originating in the United States of America ('USA' or
'the country concerned').

(2)
On the same day, the Commission announced, by a
notice published in the Official Journal of the
European Union[3], the initiation of an anti-subsidy proceeding with regard to
imports into the Union of bioethanol originating in the USA and commenced a
separate investigation ('AS proceeding'). This proceeding will be terminated on
21 December 2012 without imposition of countervailing measures.

(3)
The AD proceeding was initiated following a
complaint lodged on 12 October 2011 by the European Producers Union of
Renewable Ethanol Association (ePURE) ('the complainant') on behalf of
producers representing more than 25%, of the total Union production of
bioethanol. The complaint contained prima facie evidence of dumping of
the said product and of material injury resulting therefrom, which was
considered sufficient to justify the initiation of an investigation.

1.2.
Parties concerned by the proceeding

(4)
The Commission
officially advised the complainant, other known Union producers, the
exporters/producers in the USA, importers, and other parties known to be
concerned, and the authorities of the USA of the initiation of the proceeding.
Interested parties were given an opportunity to make their views known in
writing and to request a hearing within the time limit set in the notice of
initiation.

(5)
All interested parties, who so requested and
showed that there were particular reasons why they should be heard, were granted a hearing.

1.2.1.
Sampling of exporters/producers in the USA

(6)
In view of the
potentially large number of exporters/producers in the USA, sampling was
envisaged in the notice of initiation in accordance with Article 17 of the
basic Regulation.

(7)
In order to enable the Commission to decide
whether sampling would be necessary and if so, to select a sample,
exporters/producers in the USA were asked to make themselves known within 15
days from the date of the initiation of the investigation and to reply to a
sampling form providing, as specified in the notice of initiation, basic
information on their activities related to production and sales of bioethanol
during the period from 1 October 2010 to 30 September 2011 ('the investigation
period' or 'the IP').

(8)
The relevant US authorities were also consulted
for the selection of a representative sample.

(9)
More than 60 exporters/producers made themselves
known and provided the requested information within the 15 days deadline.

(10)
In accordance with Article 17 of the basic
Regulation, the Commission selected a sample based on the largest
representative quantity of exports of bioethanol to the Union which could
reasonably be investigated within the time available. The sample selected
consisted of six US bioethanol producers (US sample).

(11)
During the investigation it was found that the
production of one producer included in the US sample was not exported to the
Union in the IP. This company was therefore removed from the sample.

(12)
Despite the fact that the other sampled
producers mentioned exports of bioethanol to the Union in their sampling form,
the investigation showed that none of them exported bioethanol to the Union
market. In fact they were selling domestically to unrelated traders/blenders
which then blended it with gasoline and resold it domestically and for export
in particular to the Union. During the investigation on-spot, it became clear
that in fact, contrary to the impression that had resulted from the information
provided by the sampled US producers in their sampling forms, those producers
were not systematically aware whether or not their production was intended for
the Union market or any other destination including the US market and had no
knowledge of the traders/blenders sales prices. In effect, this means that the
US producers of bioethanol are not the exporters of the product concerned to
the Union. The exporters are in fact the traders/blenders. Hence, the data
collected and verified at the level of the US sample at provisional stage did
not allow establishing whether or not US bioethanol was exported at dumped
prices to the Union during the IP.

(13)
No anti-dumping measures could thus be imposed
at that time.

(14)
In order to identify the exports of bioethanol
to the Union, the US sample relied mainly on data provided to them by the
unrelated blenders/traders which were not investigated at provisional stage.
Although at provisional stage one such trader cooperated in the investigation
and provided additional data, that data was not sufficient to establish
precisely and reliably the necessary data for the purpose of calculating dumping
margins.

(15)
In order to complete the dumping investigation,
it was thus considered necessary to rather base it on the data of traders and
blenders which were actually exporting the product concerned to the Union.

(16)
Dumping questionnaires were thus sent to the
eight largest US traders/blenders that were identified during the investigation
of the US sample. These traders/blenders represent over 90% of total exports of
bioethanol to the Union. Two agreed to cooperate in the investigation and their
exports represent about 51% of total exports of bioethanol to the Union during
the IP.

1.2.2.
Sampling of Union producers

(17)
In view of the potentially large number of Union
producers, sampling was envisaged in the notice of initiation in accordance
with Article 17 of the basic Regulation.

(18)
In the notice of initiation the Commission
announced that it had provisionally selected a sample of Union producers (EU
sample). This sample consisted of five companies and groups, out of the 19
Union producers that were known prior to the initiation of the investigation.
The sample was selected on the basis of the production volume of bioethanol
during the investigation period and the location of the known producers. This
sample represented 48% of the total estimated Union production during the IP.

(19)
But the investigation revealed that the groups
included in the EU sample consisted of a large number of companies or single
entities producing and selling the like product. In this case it would have
meant to investigate 13 companies and it was not possible to investigate all of
them given the time available for the investigation. It was thus decided to
re-examine the data available for the selection of a representative sample. It
was considered that the sample should be based on the largest individual
producing entities in the Union and in the groups taking also into account a
certain geographical spread amongst Union producers.

(20)
Hence, a definitive EU sample of six individual
producers was ultimately selected based on representativity in terms of the
production and sales volume of bioethanol during the IP and the geographical
location of the producer. These producers located in Belgium, the Netherlands,
France, UK, Sweden and Germany represent 36% of the total estimated Union
production and 44% of the total production reported by the companies that
submitted data for the selection of a sample. This sample was deemed to be
representative for the examination of possible injury to the Union industry.

(21)
Interested parties were given the opportunity to
comment on the appropriateness of the choice of the sample.

(22)
Some parties claimed that the EU sample was less
representative than the one originally selected which included complete groups
of companies. In their view, an objective analysis of the situation of the
Union industry could only be made by including all companies which are part of
groups in the sample. They alleged in particular that costs and revenues could
be allocated to certain companies of a group which are not visited and may thus
not be reflected in the injury analysis.

(23)
In this respect it should be noted that the
Commission duly considered and examined the data provided by all sampled and
non-sampled companies and in particular the companies belonging to groups, in
order to ensure that all costs and revenues involved in the production and sale
by the companies selected in the sample had been fully and correctly reflected
in the injury analysis.

(24)
Some parties contested the inclusion in the EU
sample of Union producers which were in a start-up phase. They also claimed
that one company with important idle capacity in 2011, located in a Member
State that did not implement the Renewable Energies Directive ('RED'), should
not have been included in the sample. It was also claimed that in case these
companies would be finally included in the sample, the Commission should adjust
their data in order to account for these extraordinary circumstances.

(25)
It is considered that the fact that companies
recently started or resumed operations does not preclude them from being part
of the sample. The inclusion of these companies is not in contravention with
the criteria for the selection of a sample as laid down in Article 17 of the
basic Regulation. With regard to the adjustment of their data, parties did not
provide any specific issue or substantiated evidence to support their claim,
nor a basis on how to make the claimed adjustment.

(26)
Furthermore, the investigation did not reveal
any cost, such as for example accelerated depreciations, which should be
adjusted to correct any distortion due to the start-up of activity. Hence, this
claim is rejected.

(27)
Some parties also disputed the fact that one
company that was provisionally selected in the EU sample and located in a
Member State with high consumption and production of bioethanol was no longer
part of the EU sample. They claimed that this economic situation of this
company was good and suggested that this was the reason for its exclusion from
the sample. They further argued that the selection of the sample had been skewed
towards finding injury. According to these parties the Commission should have
sent so called mini-questionnaires to all producers to collect the relevant
data in order to select a sample.

(28)
With regard to the sending of
mini-questionnaires, it should be noted that, prior to the selection of the
sample, the Commission requested information from all Union producers known to
be concerned in order to collect the relevant data for the purpose of the
selection of a sample. As mentioned in point 5.2.1 of the NOI, this information
was available as from the date of the initiation of the investigation in the
file for inspection by interested parties and was not such as to show the state
of the economic situation of the respondents. Hence, the Commission had
sufficient relevant information at its disposal to select a representative
sample respecting the criteria of Article 17 of the basic Regulation but could
not make any result-oriented selection of companies. The above claims were
therefore rejected.

(29)
Finally, it was claimed that the sample should
have included companies producing bioethanol from sugar beet since production
from this raw material can be much more profitable than production from, for
example, wheat. Even though this claim was not substantiated, the information
available has shown that bioethanol produced from sugar beet represents only a
minor part of total Union production, around 12% in 2011 and that two of the
companies included in the sample partially use sugar beet as feedstock to
produce bioethanol. Therefore, the claim is rejected.

(30)
Based on the above, it is considered that the
sample selected as explained above for the purpose of the injury analysis is
representative for the Union industry.

1.2.3.
Sampling of unrelated importers

(31)
In view of the potentially large number of
importers involved in the proceeding, sampling was envisaged
for importers in the notice of initiation in accordance with Article 17 of the
basic Regulation.

(32)
Only three importers provided the requested
information and agreed to be included in the sample within the deadline set in
the notice of initiation. In view of the limited number of cooperating importers, sampling was not deemed to be necessary.

1.2.4.
Questionnaire replies and verifications

(33)
The Commission sent questionnaires to all
parties known to be concerned. Questionnaires were thus sent to the sampled USA
exporters/producers, the sampled Union producers, the three cooperating
unrelated importers in the Union and to all users known to be concerned by the
investigation.

(34)
Replies were received from the sampled USA
exporters/producers, the sampled Union producers, two unrelated importers and
four users.

(35)
The Commission sought and verified all the
information provided by interested parties and deemed necessary for the
purposes of a definitive determination of dumping, resulting injury and Union
interest.

(36)
Verification visits were carried out at the
premises of the following companies:

Exporters/producers in the USA

· - Marquis Energy LLC, Hennepin, Illinois

· - Patriot Renewable Fuels LLC, Annawan, Illinois

· - Platinum Ethanol LLC, Arthur, Iowa

· - Plymouth Energy Company LLC, Merrill, Iowa

· - POET LLC, Wichita, Kansas and Sioux Falls, South Dakota

Unrelated trader in the USA

· - Bio Urja Trading LLC, Houston, Texas

Related trader in Switzerland

· - Cargill International SA, Geneva

Producers in the Union

· - Abengoa Energy Netherlands B.V., Rotterdam, the Netherlands

· - BioWanze, S.A. Wanze, Belgium

· - Crop Energies Bioethanol GmbH, Mannheim, Germany

· - Ensus, Yarm, United Kingdom

· - Lantmännen Energi / Agroetanol, Norrkoping, Sweden

· - Tereos BENP, Lillebonne, France

Unrelated importers in the Union

· - Shell Trading Rotterdam B.V., Rotterdam, the Netherlands

· - Greenergy Fuels Limited, London, United Kingdom

Users in the Union

· - Shell Nederland Verkoopmaatschappij B.V. Rotterdam, the
Netherlands

1.3.
Investigation period and period
considered

(37)
The investigation of dumping and injury covered
the period from 1 October 2010 to 30 September 2011. The examination of trends
relevant for the assessment of injury covered the period from January 2008 to
the end of the IP (‘the period considered’).

2.
PRODUCT CONCERNED AND LIKE PRODUCT

2.1.
Product concerned

(38)
The product concerned is bioethanol, sometimes
referred to as ‘fuel ethanol’, i.e. ethyl alcohol produced from agricultural
products (as listed in Annex I to the Treaty on the Functioning of the European
Union), denatured or undenatured, excluding products with a water content of
more than 0,3 % (m/m) measured according to the standard EN 15376, but
including ethyl alcohol produced from agricultural products (as listed in Annex
I to the Treaty on the Functioning of the European Union) contained in blends
with gasoline with an ethyl alcohol content of more than 10 % (v/v) originating
in the USA, currently falling within CN codes ex
2207 10 00, ex 2207 20 00, ex 2208 90 99, ex 2710 12 21, ex 2710 12 25, ex 2710
12 31, ex 2710 12 41, ex 2710 12 45, ex 2710 12 49, ex 2710 12 51, ex 2710 12
59, ex 2710 12 70, ex 2710 12 90, ex 3814 00 10, ex 3814 00 90, ex 3820 00 00
and ex 3824 90 97.

(39)
Bioethanol can be produced from various
agricultural feedstocks, such as sugar cane, sugar beet, potatoes, manioc and
corn. In the USA a distinction on the basis of the various feedstocks is made,
as described below:

(a) The Conventional Biofuel (mainly
produced from corn feedstock and commonly called corn ethanol) which is defined
as a renewable fuel derived from corn starch produced from facilities that
commenced construction after the date of enactment of the Energy Independence and Security Act in
December 2007[4] and which must achieve in the future a 20% reduction in greenhouse
gas ('GHG') emissions compared to baseline lifecycle GHG emissions of gasoline
and diesel.

(b) The Advanced Biofuel which is defined
as a renewable fuel other than ethanol derived from corn starch, which is
derived from renewable biomass and has lifecycle GHG emissions, as determined
by the Energy Policy Act ('EPA') Administrator, that are at least 50% less than
baseline GHG emissions. This term includes "cellulosic biofuels" such
as bioethanol and "biomass-based diesel." The schedule for Advanced
Biofuels includes the schedule for Cellulosic Biofuels, Biomass-Based Diesel,
and Undifferentiated Advanced Biofuels.

(40)
More specifically, Cellulosic Biofuel[5] is defined as a renewable fuel derived from any cellulose, hemicellulose, or lignin that is derived from renewable biomass
and that has lifecycle GHG emissions, as determined by the EPA Administrator,
that are at least 60% less than the baseline lifecycle GHG emissions.
Cellulosic biofuels include cellulosic bioethanol. There are researches and
pilot projects largely supported by the US Federal Government for producing
Advanced Biofuels and in particular cellulosic bioethanol, produced in
particular out of agricultural and forestry wastes. According to US officials
and publicly available data[6], the production of this type of bioethanol will reach around 4
billion litres in 2014 and more than 50 billion litres by 2021. Production of
cellulosic bioethanol was negligible in the IP.

(41)
During the investigation period up to now corn
has been the main feedstock used in the USA, while the main feedstock used in
the Union is wheat.

(42)
The investigation showed that bioethanol is
generally sold in its pure form to blenders/traders which blend[7] it with gasoline in particular to produce high level blends which
are exported or sold on the domestic market for further blending and used for
fuel consumption. Blending is not a very complex operation and may be
accomplished by mixing the products in special tanks adding the desired
percentages of bioethanol and gasoline.

(43)
To identify the various types of bioethanol,
bioethanol blends or mixtures in use around the world, ethanol fuel mixtures
have "E" numbers which describe the percentage of ethanol fuel in the mixture by volume. For example, E85 is 85% anhydrous ethanol and 15% gasoline. Low ethanol blends, from E5 to E25, are also
known as gasohol, though internationally the most common use of the term
gasohol refers to the E10 blend. Blends of E10 or less have been used in more
than twenty countries around the world by 2011, led by the USA, where almost
all retail gasoline sold in 2010 was blended with 10% of bioethanol.

(44)
The investigation showed that all types of
bioethanol are considered to be biofuels under the current National Renewable Fuel Standard program (RFS1) established
under the Energy Policy Act of 2005, which amended the Clean Air Act by establishing the first national renewable
fuel standard. The U.S. Congress gave the US Environmental Protection Agency (EPA) the
responsibility to coordinate with the US Department of Energy, the US Department of Agriculture, and stakeholders
to design and implement this program.

(45)
As a result of their energy policy the USA
became the largest worldwide producer of bioethanol as from 2005 accounting for
57,5% of global production. In 2009, the requirements under the EPA ensured
that at least 11 billion US gallons of renewable fuels were produced, in
particular to keep up with the targets established by the Energy Independence and Security Act of 2007.
The large scale production also allowed US producers to become exporter of
bioethanol to other markets, including the Union.

(46)
Based on official sources, market and publicly
available information[8], all types of bioethanol and bioethanol in blends, namely mixtures
of bioethanol with mineral gasoline as explained in recital (43) above, which
are produced in the USA and sold either in the USA or exported are considered
to be bioethanol fuels and are part of a legislative package concerning energy
efficiency and renewable energy and alternative fuels in the USA.

(47)
It has been found that all types of bioethanol
and bioethanol in blends covered by this investigation, despite possible
differences in terms of feedstock used for the production, or variances in the
production process, have the same or very similar basic physical, chemical and
technical characteristics and are used for the same purposes. The possible
minor variations in the product concerned do not alter its basic definition,
its characteristics or the perception that various parties have of it.

(48)
Some parties claimed that the definition of the
product concerned was not clear, in particular because it did not allow for
distinguishing the bioethanol for fuel applications from that destined for
other applications. Hence, they claimed that the investigation should
cover ethanol for all uses and ethanol from all sources, including synthetic
ethanol that competes with bioethanol for industrial use.

(49)
Another party claimed the opposite, namely that
the investigation should only cover bioethanol for fuel applications and that
bioethanol for industrial use should thus be excluded.

(50)
In this context, it is noted that the product
concerned should primarily be defined on the basis of its basic physical,
technical and chemical characteristics and not its uses or applications. A
product which has various applications may indeed have the same or similar
basic characteristics notwithstanding its further use and in certain
circumstances it may be necessary to deepen the analysis of the product
definition and the product scope in the light of the specificity of the
industry and the market.

(51)
In the present case, it was clear that the
notice of initiation did not intend to cover synthetic ethanol in the product
definition. Synthetic ethanol has different characteristics than bioethanol and
does not correspond to the above criteria linked to the definition of the
product concerned. There is no producer that focusses on the production of that
product which took part in this investigation. Therefore, synthetic ethanol
cannot be included in the definition of the product concerned and is outside
the scope of the investigation. Contrary to the suggestion made by some
parties, this clarification does not lead to a change in the scope of the
investigation or the definition of the product concerned and did not have any
impact on the quality of the data used.

(52)
Bioethanol for fuel application and bioethanol
destined to other applications may have similar characteristics. However,
during the investigation dumping was examined at the level of USA operators
which produced or blended bioethanol for fuel application, namely bioethanol to
be included in a fuel mixture. Similarly, the investigation of Union producers
focussed on bioethanol destined to fuel applications and not for other uses.
Hence, bioethanol destined to applications other than fuel should not be
covered by the scope of this investigation.

(53)
The importers which will not use the imported
USA bioethanol for fuel application have the possibility to make a declaration
subject to the end use provisions as established by the
Implementing provisions embedded in Articles 291 to 300 of the Union Customs
Code[9].

2.2.
Like product

(54)
It was found that bioethanol manufactured by the
Union industry and sold on the Union market have similar
basic physical, chemical and technical characteristics when compared to
bioethanol exported to the Union from the USA.

(55)
As described in recital (39) above, bioethanol
can be produced from various feedstocks. However, the investigation did not
point to the fact that the feedstock used would lead into any differences in
the characteristics of the end-product. It was found that the product concerned
produced in the USA in particular from corn and exported to the Union is
interchangeable with that produced in particular from wheat and sold in the
Union by Union producers. In addition, there are no significant differences, if
any, in the uses and the perception by operators and users in the market
concerning bioethanol.

(56)
It is therefore confirmed that bioethanol
produced and sold in the Union and the product concerned exported from the USA
should be considered to be alike within the meaning of Article 1(4) of the
basic Regulation.

(57)
Some of the sampled US producers claimed that
the bioethanol produced and sold on the USA market is not like the product
concerned, since it does not strictly correspond to the wording of the product
description as laid out in the notice of initiation. Effectively, the types
bioethanol sold on the USA market have a water content above the threshold of
0,3% and corresponds to the USA standard (ASTM) rather than EN 15376.

(58)
However, the investigation showed that
bioethanol produced for sales on the US market largely shares the same basic
physical, chemical and technical characteristics as the product concerned.
Article 1(4) of the basic Regulation stipulates that a like product should not
necessarily be alike in all respects to the product concerned, but it could be
a product that although not alike in all respects, has characteristics closely
resembling those of the product concerned. This is the
case for the bioethanol sold in the US market and the bioethanol exported to
the Union. There are precedents where products were considered to be like the
product concerned in spite of certain differences[10].

(59)
It was therefore decided to reverse the
provisional finding and consider that the ASTM bioethanol sold in the US market
is a like product to the product concerned within the meaning of Article 1(4) of the basic Regulation.

3.
DUMPING

3.1.
Introduction

(60)
As explained in recitals (6) to (16) above, in
order to investigate the possible existence of dumping,
the investigation covered producers of bioethanol, on the one hand, and
traders/blenders which were exporting the product concerned to the Union
market, on the other hand.

(61)
Pursuant to Article 9(5) of the basic
Regulation, the regulation imposing the duty shall specify the duty for each
supplier or if that is impracticable, the duty for the supplying country
concerned.

(62)
Certain producers claimed that it was possible
to identify and trace their products when sold to US operators for export, in
particular to the Union. They referred to the certification process foreseen by
the RED but they could not in particular make the link between their sales in
the US market and the exports made by other operators to the EU. As mentioned
in recital (12) above and (63) below, these producers were also not aware of
the level of the export price to the Union.

(63)
In the present case it was found that the
structure of the bioethanol industry and the way the product concerned was
produced and sold in the US market and exported to the Union, made it
impracticable to establish individual dumping margins for US producers. More
specifically, the producers in the US sample did not export the product
concerned to the Union and the investigated traders/blenders sourced bioethanol
from various producers, blended it and sold it in particular for export to the
Union, hence, contrary to allegations made by the above parties, it was not
possible to trace all purchases individually and compare the normal values with
the relevant export prices and it is not possible to identify the producer at
the moment of the export to the Union. In other
words, each shipment made to the EU contains bioethanol produced by various US
producers in the US and not only by the US sample. Moreover, the investigation
also showed that the price level at which the US sample charged their US
customers in the USA was not in line with the actual price paid or payable for
the product concerned when exported to the Union.

(64)
Therefore, it is considered that a countrywide
dumping margin should be established.

3.2.
Normal value

(65)
For the determination of normal value in
accordance with Article 2(2) of the basic Regulation, the Commission first
established whether the domestic sales of the product concerned by the two
co-operating traders/blenders to independent customers were made in
representative volumes, i.e. whether the total volume of such sales represented
at least 5% of the total export sales volume to the Union during the IP.

(66)
Given that the sales of the like product in the
domestic market were made in sufficient quantity, normal value was determined
on the basis of the price paid or payable to the two aforementioned
traders/blenders, in the ordinary course of trade, by independent customers in
the USA.

3.3.
Export price

(67)
The cooperating traders/blenders provided data
which allowed establishing an export price on the basis
of their prices that are actually paid or payable in accordance with Article
2(8) of the basic Regulation. For those transactions for which the imports into
the Union were made through a related trading company, the export price was
constructed on the basis of the first resale price of the related trader to
independent customers in the Union, pursuant to Article 2(9) of the basic Regulation.

(68)
As regard the sales made via the related trader
located in Switzerland, selling, general and administrative costs (SG&A)
and profit were not deducted from the export price as they were considered not
to be costs between importation and resale in the Union. The investigation
showed that the principal activity of the related trader consisted of cash
management for the "sugar" business unit to which biofuels belong and
the hedging of the risks inherent in the agricultural business by concluding
derivative contracts on both over the counter and organised financial markets.

(69)
Some US producers claimed that it is the
institutions constant practice to take the exporter's sales price to the first
independent customer as the export price to use for dumping calculations. In
this case, this price would be the US producers' sales price to US unrelated
traders/blenders. However, as mentioned in recitals (62) and (63) above, none
of the US producers of bioethanol exported the product concerned to the Union
and they were not aware of the level of the export price to the EU. Hence,
their domestic price cannot be used as it is not an export price paid or
payable for the product concerned in the Union. Their claim cannot therefore be
accepted.

3.4.
Comparison

(70)
The comparison between the weighted average
normal value and the weighted average export price per product type established
for the cooperating traders/blenders was made on an ex-works basis, taking into
account, in accordance with Article 2(10) of the basic Regulation, differences
in factors which were demonstrated to affect prices and price comparability. One
trader/blender claims that the data on domestic sales was not representative.
As the trader/blenders failed to provide data on all domestic sales, the
calculation is based on the ones provided in the questionnaire and during the
on-spot visit.

(71)
One trader/blender argues that the calculation
of the domestic sales price should be based on spot market data from the NYMEX.
The Commission considers that verified data from the two trader/blenders is
more reliable.

(72)
For this purpose, due allowance in the form of
adjustments was made for differences in transport, insurance, handling, loading
and ancillary costs where applicable and justified.

(73)
The product concerned and the like product
present the particularity that traders/blenders have received a subsidy mainly
in the form of excise tax credits during the IP on their sales of bioethanol
blends. The method used to establish normal value and export price is a method
where the actual sales prices, domestic and export of the said traders/blenders
are fully taken into account. Hence, a comparison of sales made by
traders/blenders in the US market and export prices of traders/blenders to the
EU, in order to calculate the level of dumping on the product concerned,
eliminates any possible impact the subsidy may have had on prices, since the
subsidy equally affected both domestic and export sales during the IP. One trader/blender
claimed that it had not received a subsidy for its domestic sales. However, it
fails to provide proof for this claim; the claim is also difficult to reconcile
with information provided by the US authorities on the use of the subsidy.

3.5.
Dumping

(74)
As provided for in Article 2(11) of the basic
Regulation, the weighted average normal value by product type was compared to
the weighted average export price of the corresponding product type of the
product concerned. Based on that comparison, the cooperating unrelated
traders/blenders were found to have engaged in dumping practices.

(75)
The weighted average dumping margin of 9,5% was
established based on the aggregated data of the cooperating traders/blenders,
and represents the countrywide dumping margin for the USA.

(76)
Some of the US producers included in the sample
claimed that in the case of imposition of definitive anti-dumping measures,
they expected to obtain their individual duty margin. In the light of the contents
of recitals (6) to (16) and the reasoning in recitals (60) to (64) above, this
claim cannot be accepted as the investigation confirmed that for these
operators, in particular because they did not have any exports to the Union
during the IP, it was not possible to trace their products when exported to the
Union and they had generally no idea of the timing of the export and of the
price paid or payable by Union importers, hence an export price and a dumping
margin could not be reliably established for these producers.

(77)
Certain producers requested more information on
the dumping calculations established for the two cooperating traders/blenders. However,
it should be considered on the one hand that the information requested contains
business secret information and cannot therefore be disclosed to other parties
than the party concerned. On the other, it is constant practice of the
institutions to disclose the general method used to establish dumping to all
parties for which no individual data was used in the calculations. This method
was described in the general disclosure document sent to all parties.

4.
INJURY

4.1.
Union production and Union industry

(78)
The Union production was established on the
basis of a market report provided by the complainant during the investigation.
The total Union production of the like product stated in this report was
compared with the information provided by the 17 cooperating Union producers. A
small difference of around 5% was found between the two sets of data. This is
explained by the fact that some relatively small non-cooperating Union
producers did not submit production information. On this basis, the total Union
production was estimated at 3,42 million tonnes during the IP. The Union
producers accounting for the total Union production constitute the Union
industry within the meaning of Articles 4(1) and 5(4) of the basic Regulation
and will therefore be referred to as the "Union Industry".

4.2.
Union consumption

(79)
Union consumption was established on the basis
of the total Union production of the Union industry, adding the volume of
imports from third countries established on the basis of the best available
statistics, whereas the stock variation and exports of the Union industry as
reported by the Union industry were deducted. Some parties claimed that the
statistics used to establish consumption were not complete because significant
imports of bioethanol from other third countries, especially in the IP, were
not taken into consideration. They also considered that the volume of imports
from the US was overestimated by the Commission and that figures for
consumption and market share were therefore unreliable.

(80)
These claims were analysed and cross-checked
with the information available. Regarding the imports from other countries, the
parties did not provide any evidence regarding the volumes of imports of the
product concerned. Nevertheless, imports from other countries were taken into
consideration in the estimation of the imports. For the volume of US imports, a
clerical error was found in the estimation of US imports during the IP. Hence,
the volume of imports has been re-assessed and adjusted where necessary.
However, this has no impact on the conclusions reached in the injury and
causality assessments.

(81)
Regarding the imports of the product concerned,
it should be underlined that there is no specific customs Combined nomenclature
codes for the product concerned. Moreover, the Combined Nomenclature codes
where the product concerned can be declared to the customs authorities include
other products in addition to the product concerned.

(82)
For the imports of bioethanol blends, the
verified questionnaire responses of the unrelated importers have shown that most
of the imports were declared at customs under the TARIC code 3824 90 97 99.
However, the volume of imports cannot be obtained directly from Eurostat
because this TARIC code includes various chemical products in addition to the
product concerned. .

(83)
Regarding the imports declared under the
Combined Nomenclature codes 2207 10 00 and 2207 20 00, it was not possible to
differentiate between the product concerned and other products not concerned by
the investigation due to the absence of sufficient information regarding the
product imported.

(84)
Therefore, in the absence of complete imports
details retrievable from Eurostat, it was decided to use also other sources of
information for the purpose of establishing the imports of the product
concerned in the Union market.

(85)
In order to get the best estimate of the imports
of the product concerned originating in the USA, it was considered that the
most reliable basis were the statistics provided by the US International Trade
Commission (ITC). The volumes of exports reported correspond to the US tariff
codes 2207 10 60 and 2207 20 00.

(86)
A reasonable approach was adopted to estimate
these imports and all the quantities reported by the US International Trade
Commission were taken into consideration for establishing the US imports into
the Union market.

(87)
The estimate concerning the imports in the Union
originating from Brazil was based on the following sources of information:
reports issued by the United Kingdom Renewable Fuels Agency for the imports in
the United Kingdom; extractions of customs import detailed database provided by
the Netherlands, Sweden and Finland and by Eurostat. For the Netherlands,
Sweden and Finland, the volume of imports was estimated on the basis of the
importer and exporter names and the product description when available. To
estimate these imports, a conservative approach was adopted. All the quantities
reported were taken into consideration for the calculation of the imports.

(88)
Finally, Eurostat was also used to estimate the
residual imports into the Union for the Member States other than those
mentioned in recital (87) above. An adjustment to the import volumes was
applied on the basis of the percentage of bioethanol used as fuel in the Union.
The source of this adjustment can be found in the complaint. This percentage
was obtained from the annual ethyl alcohol balance published by the European
Commission[11]. The percentage of bioethanol used for fuel in the Union was 54% in
2008, 66% in 2009, and 68% in 2010. For the IP, the percentage of 2010 was used
for the purpose of estimating the relevant imports made during the IP.

(89)
For the estimation of the imports from other
origins, the sources of information used were Eurostat and the extractions of
customs import detailed database provided by the Netherlands, Sweden and
Finland. The same methodology as that used to establish Brazilian imports was
used.

(90)
Regarding the calculation of the CIF average
unit price for imports from the USA and from Brazil, the source of information
is the extraction of customs import detailed database provided by the
Netherlands, Sweden and Finland. And for the USA, also data from the verified
unrelated importer questionnaire was used. For the USA, the CIF average prices
for 2008 and 2009 were estimated on the basis of the average price reported by
the US ITC for these years, expressed in relation with the CIF average price
unit obtained for 2010.

(91)
The stock variation was established on the basis
of the Union industry information provided by the complainant.

(92)
On this basis Union consumption was found to
have developed as follows:

|| 2008 || 2009 || 2010 || IP

Total Union production (tonnes) (A) || 2.153.118 || 2.797.948 || 3.274.665 || 3.389.503

Total imports from third countries including the country concerned (tonnes) (B) || 1.252.705 || 1.130.703 || 859.605 || 1.031.226

Total exports from Union industry to non-EU countries (tonnes) (C) || 26.263 || 41.023 || 53.085 || 59.633

Stock variation[12] (tonnes) (C) || 0 || 4.730 || -8.415 || -5.458

Union Consumption (tonnes) || 3.379.559 || 3.882.897 || 4.089.600 || 4.366.554

Index: 2008=100 || 100 || 115 || 121 || 129

Source: (A)
market report, (B) Eurostat, the US International Trade Commission, the UK
Renewable Fuels Agency and customs import database provided by the Netherlands,
Sweden and Finland; (C) complaint, questionnaire replies from the sampled Union
producers, Union industry information provided in the complaint

(93)
During the period considered, the Union
consumption increased significantly, by 29%. This increase was stimulated by
the implementation of the Renewable Energies Directive (RED) in the Member
States which established growth targets for the consumption of renewable
energies.

4.3.
Imports into the Union from the country
concerned

4.3.1.
Volume, market share and price of imports
from the country concerned

(94)
In terms of volume, market share and price,
imports into the Union from the USA developed as follows during the period
considered:

|| 2008 || 2009 || 2010 || IP

Volume of imports from the USA (tonnes) (A) || 63.406 || 53.332 || 348.868 || 686.185

Index: 2008=100 || 100 || 84 || 550 || 1082

Market share (%) || 1,9% || 1,4% || 8,5% || 15,7%

Index: 2008=100 || 100 || 73 || 454 || 837

Average price in EUR/tonne (B) || 590,6 || 552,5 || 542,5 || 626,7

Index: 2008=100 || 100 || 94 || 92 || 106

Source: (A) export volume declared by the US
International Trade Commission, (B) Customs import database provided by the Netherlands,
Sweden Finland and a verified unrelated importers' questionnaire reply.

(95)
Imports from the USA significantly increased, in
terms of volume, from 63.406 tonnes to 686.185 tonnes during the period
considered. Similarly, the market share held by the US exporters in the Union
significantly increased from 1,9% to 15,7% over this period.

(96)
Although the average US import prices increased
by 6% over the period considered, prices charged by US exporters were
consistently lower than the average Union producers' prices as explained in
recital (117) below. This systematic price undercutting practiced by the US
exporters explains the significant increase in market share they achieved over
the period considered.

4.3.2.
Price undercutting of imports from the
country concerned

(97)
For the purpose of assessing any price
undercutting during the IP, the weighted average sales prices per product type
of the sampled Union producers charged to unrelated customers on the Union
market, adjusted to an ex-works level, were compared to the corresponding
weighted average prices per product type of the US exporters charged to the
first independent customer on the Union market, established on a CIF basis. In
order to allow a fair price comparison, the appropriate adjustments for the
existing customs duties and post-importation costs were applied to the US
price.

(98)
The results of this comparison, when expressed
as a percentage of the sampled Union producers' sales prices during the
investigation period, showed consistent price undercutting of 5,6% on average.
This price undercutting indicates the price pressure which was exerted by the
imports from the country concerned on the Union market, in particular during
the IP.

4.4.
Economic situation of the Union industry

4.4.1.
Preliminary remarks

(99)
In accordance with Article 3(5) of the basic
Regulation, the examination of the impact of the dumped imports on the Union
industry included an evaluation of all economic indicators for an assessment of
the state of the Union industry over the period considered.

(100)
The injury analysis with regard to macroeconomic
data such as production, production capacity, capacity utilisation, sales
volume, market share, growth, inventories, employment, productivity and
magnitude of the dumping margin is based on the data of the Union industry as a
whole from ePURE.

(101)
The injury analysis with regards to
microeconomic data such as prices, profitability, cash flow, investment, return
on investment, ability to raise capital, wages and inventories have been
established on the basis of data provided by the sampled Union producers
through verified questionnaire replies.

(102) The bioethanol industry is still in a start-up phase in the Union.
Companies have recently invested in new production facilities or have expanded
existing capacities to meet the growing demand in the Union. The fact that new
producers started production during the period considered led to positive
developments for indicators such as production, production capacity, sales
volume and employment.

(103) The investigation also showed that this type of industry needs a
certain time, between two to three years from the moment of start-up, to reach
normal levels of production.

4.4.2.
Production, production capacity and
capacity utilisation

|| 2008 || 2009 || 2010 || IP

Production volume (tonnes) || 2.153.118 || 2.797.948 || 3.274.665 || 3.389.503

Index: 2008=100 || 100 || 130 || 152 || 157

Production capacity (tonnes) || 3.443.766 || 3.992.640 || 4.670.076 || 4.734.915

Index: 2008=100 || 100 || 116 || 136 || 137

Capacity utilisation || 63% || 70% || 70% || 72%

Index: 2008=100 || 100 || 112 || 112 || 114

Source: based
on data from the Union industry provided by the complainant

(104)
As a result of the RED, Union production grew
significantly in the period considered, by around 57%. From 2008 to 2010 the
Union production increased by 36% but subsequently, the growth rate slowed down
significantly and was only 3,5% in the IP compared to 2010.

(105)
Production capacity increased by 37% during the
period considered and followed a similar pattern as production.

(106)
Capacity utilisation increased by 14% during the
period considered and this increase was achieved in the beginning of the period
considered. Given the start-up phase of certain Union producers in 2009, it was
expected that capacity utilisation would have increased further as producers
normally need between two to three years from the start-up to reach normal
levels of production, as explained in recital (103) above. This has however not
been the case.

(107) The investigation thus confirmed that several companies in the EU
started operation in the beginning or during the period considered due to the
expected publication of the RED. This led to positive developments in
particular for the above injury factors especially in the period up to 2010.
But the situation in the Union market changed in coincidence with the surge of
US dumped imports in 2010 and the growth in activity expected during the IP did
not materialise.

4.4.3.
Sales volume and market share

|| 2008 || 2009 || 2010 || IP

Sales volume (tonnes) || 2.035.367 || 2.650.526 || 3.117.410 || 3.229.326

Index: 2008=100 || 100 || 130 || 152 || 159

Market share || 60,2% || 68,3% || 76,2% || 74,0%

Index: 2008=100 || 100 || 113 || 126 || 122

Source: based
on data from the Union industry provided by the complainant

(108)
Sales volume of the Union industry increased by
59% and 13,8 percentage points of market share were gained during the period
considered. Sales volume grew steadily between 2008 and 2010 but between 2010
and the IP the sales volume grew less than consumption which increased by 6,8%
in that period.

(109)
Similarly, the Union industry market share
increased until 2010 but then decreased during the IP. In the period between
2010 and the IP, whilst the US imports almost doubled their market share,
gaining 7,2 percentage points, the Union industry lost 2,2 percentage points.

4.4.4.
Growth

(110)
Union consumption increased significantly during
the period considered, by 29,2%. Although sales volume and market share also
increased during this period, the Union industry did not fully benefit from
this growth in consumption, in particular as from 2010. From 2010 up to the IP,
growth in sales volume of the Union industry slowed down and market share
decreased compared to the previous years.

(111)
Some parties claimed that the growth pattern
shown by certain indicators during the period considered do not reflect the
situation of an injured industry. However, as explained above, the
investigation showed that the slowdown of growth of the Union industry in 2010
and in the IP coincided with the surge of low-priced dumped imports from the
USA.

4.4.5.
Employment and productivity

|| 2008 || 2009 || 2010 || IP

Number of employees || 2.331 || 2.419 || 2.523 || 2.552

Index: 2008=100 || 100 || 104 || 108 || 109

Productivity (unit/employee) || 924 || 1157 || 1298 || 1.328

Index: 2008=100 || 100 || 125 || 141 || 144

Source:based on
data from the Union industry provided by the complainant

(112)
Employment increased by 9% in the period
considered. More specifically, it grew by 8% from 2008 to 2010 but increased
only marginally by 1% during the IP. This trend reflects the trend for capacity
and production in the Union.

(113)
The productivity of the Union industry workforce
was measured as the output per person employed in one year. It increased
significantly over the period considered by 44%, reflecting the learning effect
and increase in efficiency during and after the start-up phase.

4.4.6.
Magnitude of the actual dumping margin

(114)
Given the volume, market share and prices of the
dumped imports from the country concerned, the impact on the Union industry of
the dumping margins established during the IP cannot be considered to be
negligible.

4.4.7.
Recovering from the effects of past
dumping

(115)
This issue is not relevant in this case due to
the absence of past dumping effects.

4.4.8.
Average unit prices of the Union industry

|| 2008 || 2009 || 2010 || IP

Unit prices (EUR) || 702,59 || 634,88 || 657,41 || 768,59

Index: 2008=100 || 100 || 90 || 94 || 109

Source:
questionnaire replies of sampled Union producers.

(116) Prices of the Union industry increased overall by 9% during the
period considered. They decreased in 2009 as compared to 2008 but then steadily
increased until the end of the IP. However, the investigation showed that the
price increases were not sufficient to allow the Union Industry to cover its
costs. The gap between the sale prices and the costs further increased in
particular during the IP. This situation coincides with the increased presence
of low-priced US dumped imports in the Union market.

(117) The investigation showed that Union industry's prices remained
higher (up to 23%) than those of the dumped imports from the USA over the
period considered.

4.4.9.
Profitability, cash flow, investments,
return on investment and ability to raise capital

|| 2008 || 2009 || 2010 || IP

Net profit before tax (EUR) || -33.305.225 || 1.343.823 || -33.932.738 || -82.070.168

Index: 2008= -100 || -100 || 4 || -102 || -246

Profitability of Union sales (% of net sales) || -11,65% || 0,33% || -5,72% || -9,74%

Index: 2008= -100 || -100 || 3 || -49 || -84

Cash flow (EUR) || -2.528.061 || 34.783.260 || 48.733.697 || 36.832.646

Index: 2008=-100 || -100 || 1376 || 1928 || 1457

Cash flow in % of Union Sales to unrelated parties || -0,9% || 8,7% || 8,2% || 4,4%

Index: 2008=-100 || -100 || 980 || 930 || 494

Investments (EUR) || 330.441.830 || 86.279.988 || 38.710.739 || 23.018.175

Index: 2008=100 || 100 || 26 || 12 || 7

Return on investment || -10% || 2% || -88% || -357%

Index: 2008=100 || -100 || 15 || -870 || -3538

Source:
Questionnaire replies of sampled Union producers

(118)
Profitability of the Union industry was established
both in absolute amounts (net profit before tax) and by expressing the pre-tax
net profit or loss as a percentage of the turnover of the sales of the like
product. The profitability of the Union industry has been negative during the
period considered with the exception of 2009, when the companies in the sample
managed to break even.

(119)
Return on investments followed a similar
pattern, staying well behind the necessary returns to allow the Union industry
to survive.

(120)
Cash flow was negative in 2008 and improved in
2009 and 2010. During the IP, however, cash flow started to decrease again,
reflecting a worsening in the Union industry's ability to self-finance its
activities.

(121)
The evolution of profitability, cash flow and
return on investment during the period considered limited the ability of the
Union industry to invest in its activities and undermined its development as
clearly demonstrated by the 93% decrease in investments over this period.

4.4.10.
Wages

|| 2008 || 2009 || 2010 || IP

Wages (EUR) || 45.066.253 || 57.253.228 || 68.711.959 || 76.030.008

Average labour costs per employee (EUR) || 75.691 || 81.233 || 88.638 || 99.646

Index: 2008=100 || 100 || 107 || 117 || 132

Source:
Questionnaire replies of sampled Union producers

(122)
Wages increased by 32% over the period
considered, reflecting the productivity gains of the employees.

4.4.11.
Inventories

|| 2008 || 2009 || 2010 || IP

Closing stocks (tonnes) || 34.585 || 24.022 || 38.649 || 31.408

Index: 2008=100 || 100 || 69 || 112 || 91

Stock in relation to production || 8,3% || 3,5% || 3,8% || 2,5%

Source:
Questionnaire replies of sampled Union producers

(123) Stock levels slightly decreased during the period considered.

4.5.
Conclusion on injury

(124)
The investigation has shown that the surge in
low-priced dumped imports in the Union market occurred in 2010 and in
particular during the IP. In that period, certain injury indicators pertaining
to the economic situation of the Union industry improved, but the growth was
not in line with the increase in consumption during the period considered and
the improvements were thus not sufficient to allow the Union industry to
develop its activities.

(125)
As is normal in a new and growing activity,
certain indicators, such as sales volume, production, and capacity utilisation
showed a positive trend during the period considered. This is explained by the
fact that new Union producers entered the market in that period. Nevertheless,
the investigation showed that the situation in the Union market, as from 2010
when the surge of low-priced imports occurred, did not allow Union producers to
reach a sufficient activity and price level in order to develop and to sustain
the important investments made in the period considered.

(126)
It was found that the low-priced imports
constantly undercut the prices of the Union industry. The level of prices did
not allow that industry to cover its costs and realise the cash flow and
profits, which are necessary to develop the activities.

(127)
Indeed, the injury indicators related to the
financial performance of the Union industry, such as profitability, cash flow
and return on investment deteriorated or remained far below the normal level.
This seriously affected the Union industry's ability to raise capital and to
further invest in its activities.

(128)
In the light of the foregoing, it was considered
that the Union industry suffered material injury during the IP within the
meaning of Article 3(5) of the basic Regulation.

5.
CAUSATION

5.1.
Introduction

(129)
In accordance with Articles 3(5) and 3(6) of the
basic anti-dumping Regulation, it was examined whether the dumped imports of
the product concerned originating in the country concerned caused injury to the
Union industry; Known factors other than the dumped imports, which could at the
same time be injuring the Union industry, were also examined to ensure that
possible injury caused by these other factors was not attributed to the dumped
imports.

5.2.
Effect of the dumped imports

(130)
As mentioned above, Union consumption grew
substantially during the period considered, by 29,%. However, the dumped
imports from the country concerned significantly increased in volume, i.e. from
1,9% share of the Union market at the beginning of the period considered to
15,7% during the IP. This clearly exerted pressure on the Union industry,
particularly from 2010 until the end of the IP, when these imports more than
doubled. From 2010, and in particular during the IP, large volumes of
low-priced imports from the USA were present on the Union market and were
undercutting the prices of the Union industry. This situation did not allow the
industry to develop as expected during the IP.

(131)
Some parties have argued that the situation of
the Union industry improved precisely from 2010 to the IP, coinciding with the
doubling of imports from the USA. As explained above in recitals (102) and (107),
the fact that many Union producers started to enter the market during the
period considered led to positive trends in certain injury factors, such as
production and sales volume. However, the Union industry lost market share in
the IP compared to 2010 while at the same time the Union market experienced the
highest increase of US dumped imports. The existence of price undercutting and
price pressure led to the deterioration of the general financial situation, in
particular the profitability, of the Union industry.

(132)
The low-priced imports thus have played a
significant role in the material injury suffered by the Union industry during
the IP.

5.3.
Effect of other factors

(133)
The following known factors, other than the
dumped imports, which might have injured the Union industry, were examined to
ensure that any injury caused by those factors was not attributed to the dumped
imports: the imports from other countries, the export performance of the Union
industry, the impact of the economic crisis and other factors such as the raw
material prices fluctuations, development of demand and alleged internal
problems of companies in the Union industry.

5.3.1.
Imports from other countries (Brazil)

(134)
According to the information available, apart
from Brazil, there was no other country exporting the product concerned to the
Union in significant quantities in the period considered. In terms of prices,
Brazilian import prices have remained well below those of the Union producers'.
However, imports from Brazil, clearly showed a decreasing trend in volume
(-81%), and market share (-25,8%) during the period considered. In consequence,
since the import volumes were reduced to such a low level during the IP, they
cannot be considered to have broken the causal link between the low-priced
imports from the USA and the injury of the Union industry during the IP.

|| 2008 || 2009 || 2010 || IP

Volume of imports originating from Brazil (tonnes) || 1.022.980 || 884.020 || 396.249 || 195.342

Index: 2008=100 || 100 || 86 || 39 || 19

Market share of imports from Brazil (%) || 30,3% || 22,8% || 9,7% || 4,5%

CIF average unit price (EUR / tonne of imports) || 560,8 || 496,2 || 580,8 || 622,4

Index: 2008=100 || 100 || 88 || 104 || 111

Source: Eurostat,
the UK Renewable Fuels Agency, customs import database provided by the Netherlands,
Sweden and Finland and the complaint.

(135)
Parties claimed that imports from Brazil
remained above the de minimis level throughout the period considered,
and that they were made at dumped prices on the Union market. They further
argued that imports from the USA, only replaced the market share left by the Brazilian
imports. The imports from the USA can therefore allegedly not be considered to
be the cause of the material injury of the Union industry.

(136)
As explained above, Brazilian imports decreased
significantly in the period considered. Their market share decreased from 30,3%
to 4,5% at a time when consumption significantly increased. Given the price
level practiced by Brazilian exporters in the Union market, it cannot be
excluded that the presence of Brazilian bioethanol contributed to some extent
to the injury of the Union industry. However, it is considered that these
imports were reduced to such a level during the IP that they cannot be regarded
as a major cause of that injury. Indeed, in period between 2010 and the IP,
whilst imports from Brazil decrease by about 200 000 tons, the dumped imports
from the USA increased by over 330 000 tons. It is thus considered that the
presence of the Brazilian bioethanol in the Union market, in particular during
the IP, cannot be such as to break the causal link established between the
dumped imports from the USA and the injurious situation of the Union industry
in that period.

5.3.2.
Export performance of the Union industry

|| 2008 || 2009 || 2010 || IP

Sales volume for export (tonnes) || 26.263 || 41.023 || 53.085 || 59.633

Source:
Complaint and questionnaire replies of sampled Union producers

(137)
The investigation showed that small volumes of
bioethanol were exported by the Union industry during the IP at prices largely
above those practiced on the Union market. This has led to the conclusion that
the export performance is not a factor that broke the causal link between the
injury suffered by the Union industry and the dumped imports from the country
concerned.

5.3.3.
The impact of the economic crisis

(138)
The economic crisis was not found to have had a
negative impact on the Union industry. Consumption of bioethanol in the Union
experienced its biggest increase in 2009, the year generally considered to be
the worst year of the economic crisis. In the same period, production and sales
by Union producers also increased.

(139)
Based on the above, it is considered that the
economic crisis did not break the causal link between the low-priced imports
from the country concerned and the material injury suffered by the Union
industry.

5.3.4.
Other factors

(140)
Parties have also mentioned other factors that
could have broken the causal link such as the fluctuation of the raw material
prices, the development of demand which was lower than expected, a regulatory
framework in the Union that allegedly plays against Union producers and certain
alleged internal problems of Union producers.

(141)
Regarding the fluctuations in the raw material
prices, both prices of corn and wheat were found to be volatile during the
period considered. The investigation showed that most producers however hedge
this risk through a specific price setting mechanism with their suppliers or
through the financial markets. Hence even if prices of feedstock did differ in
particular from 2008 until 2010, when the price for corn was lower than the
price of wheat, feedstock prices in the second half of the IP were more or less
the same. This indicates that any price difference is reduced to a minimum and
is not of a lasting nature.

(142)
Some parties have claimed that the
implementation of the RED in Member States has been too slow and that
consumption lagged behind the targets established by the mentioned Directive.
But, even if initial targets were not fully met within the period considered
the fact that consumption has grown significantly, namely by 29,2%, in that
period is a positive factor that cannot be ignored in the analysis. In any
event, the alleged slow implementation of the RED cannot justify the presence
of high volumes of low-priced dumped imports in the Union market undercutting
the prices of the Union industry and causing injury to that industry. Hence,
the claim is rejected.

(143)
Parties have also argued that the Union industry
alone could not meet Union demand as a result of regulatory uncertainty and
that the system of certification is very slow and thus undermine the benefits
for the certified Union producers. Some parties have finally argued that the
fact that many Union producers suffered internal problems during the period
considered explains any injury they suffered. These claims were however not
substantiated and the investigation did not confirm that these claims were
founded. Nevertheless, it should be pointed out that the investigation showed
that any alleged low level of the Union production was mainly justified by a
low level of sales prices in the Union market which was largely affected by the
surge of low-priced US dumped imports undercutting the Union producers prices,
in particular during the IP. It appeared that EU producers had no other choice
than stopping production as prices did not even allow them to cover the cost of
the raw material in particular during the IP. Hence, the above unsubstantiated
claims are not such as to break the causal link between the dumped imports and
the injurious situation of the Union industry during the IP.

(144)
It is thus concluded that all the above factors
could not break the causal link between the injury suffered by the Union
industry and the dumped imports from the USA.

(145)
Parties finally mention the fact that during the
IP, a considerable number of imports were declared under CN heading 3824,
attracting a low customs duty. After the end of the IP, the level of the
respective customs duty was raised. They consider that the injury was caused by
the low customs duty, and not by dumping. In this regard, it suffices to say
that customs duties may change at any time, and that this argument therefore
cannot put into question the presence of injury during the investigation
period.

5.4.
Conclusion on causation

(146)
The above analysis demonstrated that there was a
substantial increase in the volume and market share of the low-priced imports
originating in the country concerned over the period considered. In addition,
it was found that the prices of these imports were below the prices charged by
the Union industry on the Union market.

(147)
This increase in volume and market share of the
low-priced imports from the country concerned coincided with an overall and
continuous increase of consumption in the Union and also with negative results
of the Union industry during the period considered. The exporters from the
country concerned managed to increase their market share by systematically
undercutting Union industry's prices. At the same time, the Union industry was
not able to reach sustained positive levels of profitability despite its
increase in activity.

(148)
The examination of the other known factors which
could have caused injury to the Union industry revealed that these factors do
not appear to be such as to break the causal link established between the
dumped imports from the country concerned and the injury suffered by the Union
industry.

(149)
Based on the above analysis, which has properly
distinguished and separated the effects of all known factors on the situation
of the Union industry from the injurious effects of the dumped imports, it was
concluded that the dumped imports from the USA have caused material injury to
the Union industry within the meaning of Article 3(5) of the basic Regulation.

6.
UNION INTEREST

6.1.
Preliminary remark

(150)
In accordance with Article 21 of the basic
Regulation, it was examined whether, despite the conclusion on injury caused by
the dumped imports from the country concerned, compelling reasons existed for
concluding that it was not in the Union interest to adopt anti-dumping measures
in this particular case. The analysis of the Union interest was based on an
appreciation of all the various interests involved, including those of the
Union industry, importers and users of the product concerned.

6.2.
Interest of the Union industry

(151)
The investigation has shown that the Union
industry suffered material injury caused by the dumped imports from the USA. In
the absence of measures to correct the trade distorting effects of these
imports, a further deterioration in the Union industry's economic situation
appears to be very likely.

(152)
It is expected that the imposition of
anti-dumping duties will restore effective trade conditions on the Union
market, allowing the Union industry's prices to reflect its cost of production.
It can be expected that the imposition of measures would also enable the Union
industry to increase sales volume and thus gain the market share lost due to
the presence of dumped imports. This in turn will have a further positive
impact on its financial situation and profitability.

(153)
It was therefore concluded that the imposition
of anti-dumping measures on imports of the product concerned originating in the
USA would not be against the interest of the Union industry.

6.3.
Interest of importers

(154)
Two companies sent responses to the
questionnaire intended for unrelated importers in the Union. Verification visits
took place at the premises of these cooperating importers. For both companies
visited, the bioethanol business constitutes only a small part of their total
turnover (less than 5%). In addition, they both indicated that they would be
able to pass on any price increase to their customers, the users.

(155)
Based on the information available, it was
concluded that the imposition of measures would not have a significant negative
impact on the importers.

6.4.
Interest of users

(156)
Four companies sent responses to the questionnaire
intended for users in the Union. Verification visits took place at the premises
of one of them.

(157)
For the company visited, the bioethanol business
represents a small part of its turnover, less than 5%. The company has made an
impact assessment considering a blend of E5 and calculated that a duty of 100
Euro/m3 would result in a price increase of EUR 0,5 cents/litre at the pump.

(158)
As concerns the other three users, on the basis
of data contained in their questionnaire replies, it is clear that the impact
would be limited as well. For one company, the volumes purchased from the
country concerned are quite limited and the imposition of an antidumping duty
would only lead to a minimal impact on its profitability.

(159)
The other two cooperating users are related and
have declared that any imposition of antidumping duties can be passed on to
their customers. They also made clear that they have sufficient choice in the
sources of supply and that they do not depend on US imports.

(160)
Parties have claimed that there is not
sufficient capacity in the Union to meet total demand and that the Union will
need imports to secure its bioethanol needs. The verified capacity figures show
that there was idle capacity in the Union given in particular the low level of
sale prices. In consequence, the Union producers would be able to increase
their production to fulfil the growing demand particularly when trade
distortions are removed from the market. Furthermore, it is expected that new
plants will be constructed and will come into operation in the near future,
reducing any alleged risk of shortage in the Union.

(161)
In view of the above, it was concluded that the
effect of anti-dumping measures against imports of the bioethanol from the USA
would not have a significant negative impact on the users in the Union.

6.5.
Conclusion on Union interest

(162)
In view of the above, it
was concluded that overall, based on the information available concerning the
Union interest, there are no compelling reasons against the imposition of
anti-dumping measures on imports of bioethanol originating in the USA.

7.
DEFINITIVE ANTI-DUMPING MEASURES

7.1.
Injury elimination level

(163)
In view of the conclusions reached with regard
to dumping, injury, causation and Union interest, definitive anti-dumping
measures should be imposed in order to prevent further injury being caused to
the Union industry by the dumped imports.

(164)
For the purpose of determining the level of
these measures, account was taken of the dumping margins and the amount of duty
necessary to eliminate the injury sustained by the Union industry, without
exceeding the dumping margins found.

(165)
When calculating the amount of duty necessary to
remove the effects of the injurious dumping, it was considered that any
measures should allow the Union industry to cover its costs of production and
to obtain a profit before tax that could be reasonably achieved by an industry
of this type in the sector under normal conditions of competition, i.e. in the
absence of dumped imports, on sales of the like product in the Union.

(166)
In this case, given the observations made in particular
in recitals (102) and (103) above, it is considered that the target profit for
the Union industry, should be based on the profit achieved when the imports
from the USA were negligible, i.e. the average pre-tax profit margin of one of
the sampled Union producers in 2008 and 2009, a producer which was not in a
start-up phase at that time. It is thus considered that a margin of 6,8% of
turnover is reasonable and could be regarded as an appropriate minimum which
the Union industry could have expected to obtain under normal trade conditions in
the absence of injurious dumping during the IP.

(167)
On this basis, a non-injurious price was
calculated for the Union industry for the like product. The non-injurious price
was obtained by adjusting the sales prices of the sampled Union producers by
the actual profit/loss made during the IP and by adding the above mentioned
profit margin.

(168)
The necessary price increase was then determined
on the basis of a comparison of the weighted average import price of the
cooperating exporting producers in the USA, as established for the price
undercutting calculations, with the non-injurious price of the products sold by
the Union industry on the Union market during the IP. Any difference resulting
from this comparison was then expressed as a percentage of the average total
CIF import value.

7.2.
Form and level of the duties

(169)
In the light of the foregoing, it is considered
that, 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. Accordingly, all duty rates should be set at the
level of the dumping margins found.

(170)
The proposed definitive anti-dumping duties are
the following:

|| Dumping margin || Injury margin || Definitive duty %

country-wide dumping margin || 9,5% || 31,1% || 9,5%

(171)
In view of the fact that the anti-dumping duty
will also apply to blends containing by volume more than 10% (v/v) of
bioethanol, in proportion to their bioethanol content, it is considered
appropriate for the effective implementation of the measure by the customs
authorities of the Member States to determine the duty as a fixed amount on the
basis of the pure bioethanol content.

(172)
The anti-dumping duty rate specified in this
Regulation was established on the basis of the findings of the present
investigation. Therefore, they reflect the situation found during that
investigation. This country-wide duty applicable to all companies is applicable
to imports of the product concerned originating in the USA.

(173)
While it was initially
envisaged limiting the duration of measures to 3 years due to the perceived dynamic
market developments regarding the product concerned this issue was reassessed
following the comments received from interested parties. The complainants
in particular claimed that it would be too early to assume at this stage a
major change in the market patterns as the shift to new generation bioethanol
may very likely take a considerable amount of time and should not be taken into
account in the current proposal. Likewise, it would also be premature to assume
what the outcome and the impact of some of the regulatory proposals currently
discussed would be for all the operators in the market. After examining these
arguments it was considered that it was not appropriate to depart from the
normal period of validity of measures as provided in Article 11(2) of the Basic
Regulation. This is without prejudice to the possibility for any interested
party to ask for a review should the circumstances so warrant pursuant to
Article 11(3).

8.
REGISTRATION

(174)
The Commission has received requests from the
complainant for registration of imports of bioethanol originating in the USA.
According to Article 14(6) of the basic Regulation, the Commission may, after
consultation of the Advisory Committee, direct the customs authorities to take
the appropriate steps to register imports, so that measures may subsequently be
applied against those imports from the date of such registration. Imports may
be made subject to registration following a request from the Union industry
which contains sufficient evidence to justify such action. The complainant
argued that, since registration was imposed in the parallel anti-subsidy
proceeding on imports of bioethanol originating in the USA[13], such conditions were automatically met.

(175)
However, it should be underlined that the
registration in the parallel anti-subsidy proceeding has been made in a
completely different set of circumstances. As indicated in recital 10 to the
Regulation 771/2012, despite positive findings of countervailing subsidisation
and material injury caused thereby to the Union industry during the
investigation period, the Commission decided not to adopt provisional
countervailing duties because it was provisionally found that the main subsidy
scheme in force during the investigation period had ceased, in the sense that
it no longer conferred a benefit at the time provisional measures would have
been imposed. However, there was evidence that the USA might reinstate the main
subsidy scheme found to be countervailable in the coming months with
retroactive effects. In that event, the Commission considered that it would
have been entitled to adopt (and eventually collect) provisional countervailing
duties in the present investigation. Thus, in order to preserve the European
Union's rights under these special circumstances, the Commission decided to
direct the Custom authorities to register imports. This specific set of
circumstances does not apply in the current AD proceeding.

HAS ADOPTED THIS REGULATION:

Article 1

1.
A definitive anti-dumping duty is hereby imposed
on imports of bioethanol, referred to as “fuel ethanol”, i.e. ethyl alcohol
produced from agricultural products (as listed in Annex I to the Treaty on the
Functioning of the European Union), denatured or undenatured, excluding
products with a water content of more than 0,3 % (m/m) measured according to
the standard EN 15376, but including ethyl alcohol produced from agricultural
products (as listed in Annex I to the Treaty on the Functioning of the European
Union) contained in blends with gasoline with an ethyl alcohol content of more
than 10 % (v/v) intended for fuel uses currently falling within CN codes ex
2207 10 00, ex 2207 20 00, ex 2208 90 99, ex 2710 12 21, ex 2710 12 25, ex 2710
12 31, ex 2710 12 41, ex 2710 12 45, ex 2710 12 49, ex 2710 12 51, ex 2710 12
59, ex 2710 12 70, ex 2710 12 90, ex 3814 00 10, ex 3814 00 90, ex 3820 00 00
and ex 3824 90 97 (TARIC codes 2207 10 00 12, 2207 20 00 12, 2208 90 99 12,
2710 12 21 11, 2710 12 25 92, 2710 12 31 11, 2710 12 41 11, 2710 12 45 11, 2710
12 49 11, 2710 12 51 11, 2710 12 59 11, 2710 12 70 11, 2710 12 90 11, 3814 00
10 11, 3814 00 90 71, 3820 00 00 11 and 3824 90 97 67) and originating in the
United States of America.

2.
The rate of the definitive anti-dumping duty
applicable to the product described in paragraph 1 shall be 62.3 Euro per tonne
net. The anti-dumping duty shall be applicable in proportion, by weight, of the
total content of pure ethyl alcohol produced from agricultural products (as
listed in Annex I to the Treaty on the functioning of the European Union)
(bioethanol content).

3.
Products described in paragraph 1 shall be
exempted from the definitive anti-dumping duty if they are for other uses than
as use for fuel. Exemption shall be subject to the conditions laid down in the
relevant provisions of the European Union with a view to customs control of the
use of such goods (see Articles 291 to 300 of Commission Regulation (EEC) No
2454/93).

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 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[14],
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

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 C 345, 25.11.2011, p. 7.

[3]               OJ C 345, 25.11.2011, p. 13.

[4]               See www.ethanol.org
– RFS (Renewable fuels standard) under the Energy Independence and Security Act
of 2007.

[5]               See US Internal Revenue Code (IRC) – sec. 40(b)(4)
point E.

[6]               See www.ethanol.org
– RFS (Renewable fuels standard) under the Energy Independence and Security Act
of 2007.

[7]               The investigation showed that to avail the alcohol
mixture credit, as defined in Sec. 40(b)(3) of the IRC in the USA it sufficed
to blend neat bioethanol with as little as 0,1% of gasoline.

[8]               For instance (a) The information published by the
American Coalition for Ethanol (ACE) on the web (b) the Energy Policy Act (EPA)
of 2005, in particular P.L. 109-58 (c) the Energy Independence and Security Act
of 2007 (P.L. 110-140, H.R.6) which amended and increased the Renewable Fuels
Standard (RFS) requiring 9 billion gallons of renewable fuels use in 2008 and
13,9 billion gallons in 2011, (d) fact sheets issued by the US Department of
Energy under the Clean cities actions, etc.

[9]               Commission Regulation (EEC) 2454/93 of 02.07.1993

[10]             For instance, the Council Regulation on persulphates
holding that the Chinese product was "like" the EU one in spite of
quality differences in purity and iron content. OJ L 308 of 21.12.1995, p. 61,
recital 10. See also the ruling of the General Court in T-2/95, Industrie des
Poudres Spheriques, where the Court held that the institutions could lawfully
reach the conclusion that Chinese and Russian calcium metal were
"like" EU calcium metal, in spite of differences in oxygen content
which made the EU product unsuitable for a particular specific application,
representing 11% of EU consumption (T-2/95 paras. 202-221). This point was not
challenged on appeal (C-458/98 P).

[11]             OJ C225, 18.9.2009, p.13, OJ C176, 2.7.2010, p.6, OJ
C236, 12.8.2011, p.16.

[12]             It is assumed that there was no
stock variation in 2008.

[13]             Commission Regulation (EU) No 771/2012 of 23.08.2012,
OJ L229, p. 20.

[14]             OJ L 253, 11.10.1993, p. 1.