Notice of initiation of an anti-subsidy proceeding concerning imports of biodiesel originating in the United States of America
Date: 2008-06-13
Institutions: European Commission
Subjects: United States, anti-subsidy proceeding, complaint to the Commission, import, originating product, substitute fuel

C 147/10

EN

Official Journal of the European Union

13.6.2008

Notice of initiation of an anti-subsidy proceeding concerning imports of biodiesel originating in the
United States of America

(2008/C 147/05)

complaint pursuant

The Commission has
to
received a
Article 10 of Council Regulation (EC) No 2026/97 on protec-
tion against subsidised imports from countries not members of
the European Community (‘the basic Regulation’) (1), alleging
that imports of biodiesel, originating in the United States of
America (‘the country concerned’), are being subsidised and are
thereby causing material injury to the Community industry.

1. Complaint

The complaint was lodged on 29 April 2008 by the European
Biodiesel Board (‘the complainant’) on behalf of producers repre-
senting a major proportion, in this case more than 25 % of the
total Community production of biodiesel.

2. Product

and/or

paraffinic

from synthesis

The product allegedly being subsidised is fatty acid monoalkyl
esters
and/or
gasoils
hydro-treatment, of non-fossil origin (commonly known as
‘biodiesel’), whether in pure form or in a blend, mainly but not
exclusively used as renewable fuel originating in the United
States of America (‘the product concerned’), normally declared
within CN codes 3824 90 91, ex 3824 90 97, ex 2710 19 41,
ex 1516 20 98, ex 1518 00 91, ex 1518 00 99. These CN
codes are only given for information.

tax deduction,

the Washington State biofuels

ment program,
the Texas ethanol and biodiesel blend tax
exemption, the Missouri qualified biodiesel producer incentive
fund,
the
Washington State biofuels retail tax exemption, the Washington
State biofuels production tax exemption, the Washington State
energy freedom program,
the Alabama alternative fuels and
research development fund, the North Dakota biofuels partner-
ship in assisting community expansion loan program, the North
Dakota biodiesel sales equipment tax credit, the North Dakota
biodiesel production equipment tax credit, the North Dakota
biodiesel income tax credit, the North Dakota biodiesel equip-
ment tax exemption, the Indiana biodiesel production tax credit,
the Indiana biodiesel blending tax credit, the Kentucky alterna-
tive fuel production tax incentive refund, the Kentucky alterna-
tive fuel production tax credit, the Nebraska biodiesel produc-
tion investment tax credit, the Nebraska alternative fuel vehicle
and refuelling infrastructure loans and the Nebraska ethanol and
biodiesel tax exemption.

It is alleged that the above schemes are subsidies since they
involve a financial contribution from the Government of the
United States of America or other state Governments and confer
to exporters/producers of
a benefit
biodiesel. They are alleged to be limited to specific companies
and therefore specific and countervailable.

to the recipients,

i.e.

4. Allegation of injury

3. Allegation of subsidisation

It is alleged that the producers of the product concerned from
the United States of America have benefited from a number of
Federal subsidies granted by the Government of
the United
States of America and from State subsidies granted by the
Governments of several States of the United States of America.
The Federal subsidies consist of tax credits for biodiesel produc-
tion and sale in the form of (i) diesel fuel excise tax credit and
(ii) income tax credits, and the US Department of Agriculture
bioenergy program. The State schemes are the Illinois biodiesel
tax exemption, the Florida renewable energy technology grants
program, the Florida hydrogen and biofuels tax exemption, the
Florida hydrogen and biofuels investment tax credit, the Iowa
alternate energy revolving loan program, the Iowa value-added
agricultural products and processes financial assistance program,
the Iowa enterprise zone program and the high quality job crea-
tion program, the Texas new technology research and develop-

(1) OJ L 288, 21.10.1997, p. 1. Regulation as last amended by Regulation

(EC) No 461/2004 (OJ L 77, 13.3.2004, p. 12).

The complainant has provided evidence that imports of the
product concerned from the United States of America have
increased overall
in absolute terms and in terms of market
share.

It is alleged that the volumes and the prices of the imported
product concerned have, among other consequences, had a
negative impact on the market share held and the level of prices
charged by the Community industry, resulting in substantial
adverse effects on the overall performance and the financial
situation of the Community industry.

It is further alleged that the unfair competition from the United
States of America is causing the material retardation of the
establishment of a Community industry which is at a very early
stage of development.

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Official Journal of the European Union

C 147/11

5. Procedure

Having determined, after consulting the Advisory Committee,
that the complaint has been lodged by or on behalf of the Com-
munity industry and that there is sufficient evidence to justify
the initiation of a proceeding, the Commission hereby initiates
an investigation pursuant to Article 10 of the basic Regulation.

— the names and the precise activities of all related
involved in the production and/or
the product

companies (2)
selling (export and/or domestic) of
concerned,

— any other relevant information that would assist the

Commission in the selection of the sample.

5.1. Procedure for the determination of subsidisation and

injury

The investigation will determine whether the product concerned
originating in the United States of America is being subsidised
and whether this subsidisation has caused injury.

(a) Sampling

In view of the apparent large number of parties involved in
this proceeding,
the Commission may decide to apply
sampling in accordance with Article 27 of the basic Regu-
lation.

(i) Sampling

for
United States of Amer ica

expor ters/producers

in

the

In order to enable the Commission to decide whether
sampling is necessary and, if so, to select a sample, all
exporters/producers, or representatives acting on their
behalf, are hereby requested to make themselves known
by contacting the Commission and providing the
following information on their company or companies
within the time limit set in point 6(b)(i) and in the
format indicated in point 7:

— name, address, e-mail address, telephone and fax

numbers and contact person,

— the turnover in local currency and the volume in
metric tonnes of the product concerned (1) sold for
export to the Community during the period 1 April
2007 to 31 March 2008,

— the turnover in local currency and the sales volume
in metric tonnes for the product concerned sold on
the domestic market during the period 1 April
2007 to 31 March 2008,

— the precise activities of the company with regard to
the product concerned (in particular, please state
whether your company produces and/or blends
biodiesel),

to its possible inclusion in the sample.

the company
By providing the above information,
If
agrees
the company is chosen to be part of
the sample,
this will imply replying to a questionnaire and accepting
an on-the-spot
the
company indicates that it does not agree to its possible
inclusion in the sample, it will be deemed not to have
co-operated in the investigation. The consequences of
non-cooperation are set out in point 8 below.

investigation of

its response.

If

In order to obtain the information it deems necessary
for the selection of the sample of exporters/producers,
the Commission will, in addition, contact the authori-
ties of the exporting country, and any known associa-
tions of exporters/producers.

Since a company cannot be certain that
it will be
selected in the sample, exporters/producers that wish to
claim an individual amount of countervailable subsidi-
sation pursuant to Article 27(3) of the basic Regulation
are advised to request a questionnaire within the dead-
line foreseen in point 6(a)(i) of this notice and file it
within the deadline foreseen in point 6(a)(ii) first para-
graph of this notice. However, attention is drawn to the
last sentence of point 5(b) of this notice.

(ii) Sampling for impor ters

In order to enable the Commission to decide whether
sampling is necessary and, if so, to select a sample, all
importers, or representatives acting on their behalf, are
hereby requested to make themselves known to the
Commission and to provide the following information
on their company or companies within the time limit
set in point 6(b)(i) and in the formats indicated in
point 7:

— name, address, e-mail address, telephone and fax

numbers and contact person,

— the total turnover in euro of the company during

the period 1 April 2007 to 31 March 2008,

— the total number of employees,

(1) Note that the product concerned is pure biodiesel and biodiesel in a
blend. For biodiesel sold in blends, only the proportion of biodiesel
should be reported, e.g. 100 tonnes of blended product consisting of
50 % biodiesel and 50 % mineral diesel should be reported as a sale of
50 tonnes of the product concerned.

(2) For guidance on the meaning of related companies, please refer to
Article 143 of Commission Regulation (EEC) No 2454/93 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).

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Official Journal of the European Union

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— the precise activities of the company with regard to

the product concerned,

— the volume in metric tonnes and value in euro of
imports into and resales made in the Community
market during the period 1 April 2007 to 31 March
2008 of the imported product concerned origin-
ating in the United States of America,

— the names and the precise activities of all related
involved in the production and/or

companies (1)
selling of the product concerned,

— any other relevant information that would assist the

Commission in the selection of the sample.

to its possible inclusion in the sample.

the company
By providing the above information,
If
agrees
the company is chosen to be part of
the sample,
this will imply replying to a questionnaire and accepting
an on-the-spot
the
company indicates that it does not agree to its possible
inclusion in the sample, it will be deemed not to have
co-operated in the investigation. The consequences of
non-cooperation are set out in point 8 below.

investigation of

its response.

If

the selection of

In order to obtain the information it deems necessary
the
for
Commission will, in addition, contact any known asso-
ciations of importers.

the sample of

importers,

(iii) Sampling for Community producers

In view of the large number of Community producers
supporting the complaint, the Commission intends to
investigate
injury to the Community industry by
applying sampling.

In order to enable the Commission to decide whether
sampling is necessary and, if so, to select a sample, all
representatives acting on
Community producers, or
their behalf, are hereby requested to provide the
following information on their company or companies
within the time limit set in point 6(b)(i) and in the
formats indicated in point 7:

— name, address, e-mail address, telephone and fax

numbers and contact person,

— the total turnover in euro of the company during

the period 1 April 2007 to 31 March 2008,

— the precise activities of the company with regard to
the product concerned (in particular, please state
whether your company produces and/or blends
biodiesel),

— the

value

in euro of

the product
concerned (2) made in the Community market
during the period 1 April 2007 to 31 March 2008,

sales of

— the volume in metric tonnes of sales of the product
concerned made in the Community market during
the period 1 April 2007 to 31 March 2008,

— the volume in metric tonnes of the production of
the product concerned during the period 1 April
2007 to 31 March 2008,

— the names and the precise activities of all related
involved in the production and/or

companies (1)
selling of the product concerned,

— any other relevant information that would assist the

Commission in the selection of the sample.

to its possible inclusion in the sample.

the company
By providing the above information,
If
agrees
the company is chosen to be part of
the sample,
this will imply replying to a questionnaire and accepting
an on-the-spot
the
company indicates that it does not agree to its possible
inclusion in the sample, it will be deemed not to have
co-operated in the investigation. The consequences of
non-cooperation are set out in point 8 below.

investigation of

its response.

If

(iv) Final selection of the samples

interested parties wishing to submit any relevant
All
information regarding the selection of the sample must
do so within the time limit set in point 6(b)(ii).

samples

The Commission intends to make the final selection of
the
the parties
concerned that have expressed their willingness to be
included in the sample.

after having

consulted

Companies included in the samples must reply to a
questionnaire within the time limit set in point 6(b)(iii)
and must cooperate within the framework of the inves-
tigation.

forthcoming,

sufficient co-operation is not

If
the
Commission may base its findings, in accordance with
Articles 27(4) and 28 of the basic Regulation, on the
facts available. A finding based on facts available may
be less advantageous
to the party concerned, as
explained in point 8.

(1) For guidance on the meaning of related companies, please refer to
Article 143 of Commission Regulation (EEC) No 2454/93 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).

(2) Note that the product concerned is pure biodiesel and biodiesel in a
blend. For biodiesel sold in blends, only the proportion of biodiesel
should be reported, e.g. 100 tonnes of blended product consisting of
50 % biodiesel and 50 % mineral diesel should be reported as a sale of
50 tonnes of the product concerned.

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Official Journal of the European Union

C 147/13

(b) Questionnaires

information submitted pursuant to Article 31 of the basic Regu-
lation will only be taken into account if supported by factual
evidence at the time of submission.

In order to obtain the information it deems necessary for
its investigation, the Commission will send questionnaires
to the sampled Community industry and to any asso-
ciation of producers in the Community, to the sampled
exporters/producers in the United States of America, to any
association of exporters/producers, to the sampled impor-
ters, to any known association of importers, and to the
authorities of the exporting country concerned.

Exporters/producers
in the United States of America
requesting the calculation of an individual amount of coun-
tervailable subsidisation, with a view to the application of
Articles 27(3) and 15(3) of
the basic Regulation, must
submit a completed questionnaire within the time limit set
in point 6(a)(ii) of this notice. They therefore have to request
a questionnaire within the time limit set in point 6(a)(i).
However, such parties should be aware that if sampling is
applied to exporters/producers, the Commission may none-
to calculate an individual amount of
theless decide not
countervailable subsidisation for them,
the number of
exporters/producers is so large that individual examination
would be unduly burdensome and would prevent the timely
completion of the investigation.

if

(c) Collection of information and holding of hearings

All interested parties are hereby invited to make their views
known, submit information other than questionnaire replies
and to provide supporting evidence. This information and
supporting evidence has to reach the Commission within
the time limit set in point 6(a)(ii).

Furthermore, the Commission may hear interested parties,
provided that they make a request showing that there are
particular reasons why they should be heard. This request
must be made within the time limit set in point 6(a)(iii).

6. Time limits

(a) General time limits

(i) For par ties to request a questionnaire

All interested parties should request a questionnaire as
soon as possible, but not later than 15 days after the
publication of this notice in the Official Journal of the
European Union.

(ii) For par ties

to make themselves known,

to
submit questionnaire replies and any other
infor mation

All interested parties, if their representations are to be
taken into account during the investigation, must make
themselves known by contacting the Commission,
present their views and submit questionnaire replies or
any other information within 40 days of the date of
publication of this notice in the Official Journal of the
European Union, unless otherwise specified. All expor-
ters/producers concerned by this proceeding, who wish
to apply for individual examination in accordance with
Article 27(3) of the basic Regulation, must also submit
a questionnaire reply within 40 days of the date of the
publication of this notice in the Official Journal of the
European Union, unless otherwise specified. Attention is
drawn to the fact that the exercise of most procedural
rights set out in the basic Regulation depends on the
party's making itself known within the aforementioned
period.

selected

Companies
submit
a
questionnaire replies within the time limits specified in
point 6(b)(iii).

sample must

in

5.2. Procedure for assessment of Community interest

(iii) Hear ings

In accordance with Article 31 of the basic Regulation and in the
event that the allegations of subsidisation and injury caused
thereby are substantiated, a decision will be reached as to
whether the adoption of countervailing measures would not be
against the Community interest. For this reason the Commission
may send questionnaires to the known Community industry,
importers, their representative associations, representative users
Such parties,
and representative
including those not known to the Commission, provided that
they prove that there is an objective link between their activity
and the product concerned, may, within the general time limits
set in point 6(a)(ii), make themselves known and provide the
Commission with information. The parties which have acted in
conformity with the preceding sentence may request a hearing
setting the particular reasons why they should be heard within
the time limit set in point 6(a)(iii). It should be noted that any

consumer organisations.

All interested parties may also apply to be heard by the
Commission within the same 40-day time limit.

(b) Specific time limit in respect of sampling

Journal of

(i) The information specified in points 5.1(a)(i), 5.1(a)(ii)
and 5.1(a)(iii) should reach the Commission within
15 days of the date of publication of this notice in the
Official
the European Union, given that the
Commission intends to consult parties concerned that
have expressed their willingness to be included in the
sample on its final selection within a period of 21 days
of the publication of this notice in the Official Journal of
the European Union.

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Official Journal of the European Union

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(ii) All other information relevant for the selection of the
sample as referred to in 5.1(a)(iv) must
reach the
Commission within a period of 21 days of the publica-
tion of this notice in the Official Journal of the European
Union.

(iii) The questionnaire replies from sampled parties must
reach the Commission within 37 days from the date of
the notification of their inclusion in the sample.

Where it is found that any interested party has supplied false or
misleading information, the information shall be disregarded
and use may be made of the facts available. If an interested
party does not cooperate or cooperates only partially and find-
ings are therefore based on facts available in accordance with
Article 28 of the basic Regulation, the result may be less favour-
able to that party than if it had cooperated.

9. Schedule of the investigation

7. Written submissions, questionnaire replies and cor-

respondence

All submissions and requests made by interested parties must be
made in writing (not in electronic format, unless otherwise
specified) and must indicate the name, address, e-mail address,
telephone and fax numbers of the interested party. All written
submissions, including the information requested in this notice,
questionnaire replies and correspondence provided by interested
parties on a confidential basis shall be labelled as ‘Limited’ (1)
and, in accordance with Article 29(2) of the basic Regulation,
shall be accompanied by a non-confidential version, which will
be labelled ‘For inspection by interested parties’.

Commission address for correspondence:
European Commission
Directorate General for Trade
Directorate H
Office: J-79 4/23
B-1049 Brussels
Fax (32-2) 295 65 05

8. Non-cooperation

In cases in which any interested party refuses access to or does
not provide the necessary information within the time limits, or
significantly impedes the investigation, provisional or final find-
ings, affirmative or negative, may be made in accordance with
Article 28 of the basic Regulation, on the basis of the facts
available.

The investigation will be concluded, according to Article 11(9)
of the basic Regulation within 13 months of the date of the
publication of this notice in the Official Journal of the European
Union. According to Article 12(1) of the basic Regulation, provi-
sional measures may be imposed no later than 9 months from
the publication of
the
European Union.

this notice in the Official

Journal of

10. Processing of personal data

It is noted that any personal data collected in this investigation
will be treated in accordance with Regulation (EC) No 45/2001
of the European Parliament and of the Council on the protec-
tion of individuals with regard to the processing of personal
data by the Community institutions and bodies and on the free
movement of such data (2).

11. Hearing Officer

their

they may request

in the exercise of

the intervention of

It is also noted that if interested parties consider that they are
rights of
encountering difficulties
defence,
the Hearing
Officer of DG Trade. He acts as an interface between the inter-
ested parties and the Commission services, offering, where
necessary, mediation on procedural matters affecting the protec-
tion of their interests in this proceeding,
in particular, with
regard to issues concerning access to file, confidentiality, exten-
sion of time limits and the treatment of written and/or oral
submission of views. For further information and contact details
interested parties may consult the Hearing Officer's web pages
of the website of DG Trade (http://ec.europa.eu/trade).

(1) This means that the document is for internal use only. It is protected
pursuant to Article 4 of Regulation (EC) No 1049/2001 of the
European Parliament and of the Council regarding public access to
European Parliament, Council and Commission documents (OJ L 145,
31.5.2001, p. 43). It is a confidential document pursuant to Article 29
of the basic Regulation and Article 12 of the WTO Agreement on
Subsidies and Countervailing Measures.

(2) OJ L 8, 12.1.2001, p. 1.