Commission Regulation (EC) No 194/2009 of 11 March 2009 imposing a provisional countervailing duty on imports of biodiesel originating in the United States of America
Date: 2009-03-11
Institutions: European Commission
Subjects: United States, biofuel, countervailing charge, import, motor fuel, originating product

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COMMISSION REGULATION (EC) No 194/2009

of 11 March 2009

imposing a provisional countervailing duty on imports of biodiesel originating in the United States
of America

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

therefrom, which was considered sufficient to justify the
initiation of the AS investigation.

Having regard to the Treaty
Community,

establishing the European

(4)

Having regard to Council Regulation (EC) No 2026/97 of
6 October 1997 on protection against subsidised imports
from countries not members of the European Community (1)
(‘the basic Regulation’), and in particular Article 12 thereof,

After consulting the Advisory Committee,

Whereas:

1. PROCEDURE

the European Union (2),

On 13 June 2008, the Commission announced, by a
notice (‘notice of
initiation’) published in the Official
the initiation of an
Journal of
anti-subsidy proceeding (‘AS investigation’ or ‘the inves­
tigation’) with regard to imports into the Community of
biodiesel originating in the United States of America
(‘USA’ or ‘country concerned’).

(5)

On the same day,
the Commission announced by a
notice published in the Official
the European
Journal of
Union (3), the initiation of an anti-dumping proceeding
with regard to imports
into the Community of
biodiesel originating in the USA and commenced a
separate investigation (‘AD proceeding’).

(1)

(2)

(3)

to the

initiation of

causing material

Prior
the proceeding and in
accordance with Article 10(9) of the basic Regulation,
the Commission notified the Government of the USA
that it had received a properly documented complaint
alleging that subsidised imports of biodiesel originating
in the USA were
injury to the
Community industry. The Government of the USA was
invited for consultations with the aim of clarifying the
situation as regards the contents of the complaint and
arriving at a mutually agreed solution. The Government
of
the USA accepted the offer of consultations and
consultations were subsequently held on 2 June 2008.
During the consultations, no mutually agreed solution
could be arrived at. However, due note was taken of
comments made by the authorities of the USA high­
lighting
in the
complaint, it was not always clear from the information
contained therein that there were countervailable benefits
to producers/exporters of biodiesel in the USA. Having
examined the available information,
it was decided to
exclude the following state schemes from the scope of
investigation even though they are listed in the notice of
initiation: Florida renewable energy technology grants
program, Texan new technology research and develop­
ment program, Washington state
freedom
program (second part), Alabama alternative fuels and
research development
fund, North Dakota biodiesel
sales equipment tax credit and Nebraska alternative fuel
vehicle and refuelling infrastructure loans.

state programmes

energy

some

that

for

the authorities of

complainant Community producers

The Commission officially advised exporters/producers in
importers, suppliers, users and associations
the USA,
the USA,
known to be concerned,
the
and other
Community producers known to be concerned of the
initiation of
Interested parties were
given the opportunity to make their views known in
writing and to request a hearing within the time limit
set in the notice of initiation. All interested parties who
so requested and showed that
there were particular
reasons why they should be heard were granted a
hearing.

the proceeding.

The AS investigation was initiated following a complaint
lodged on 29 April 2008 by the European Biodiesel
Board (‘the complainant’) on behalf of producers rep­
resenting a major proportion,
in this case more than
25 % of the total Community production of biodiesel.
The complaint contained prima facie evidence of subsidi­
sation of the said product and of material injury resulting

(1) OJ L 288, 21.10.1997, p. 1.
(2) OJ C 147, 13.6.2008, p. 10.
(3) OJ C 147, 13.6.2008, p. 5.

1.1. Sampling of exporters in the USA

(6)

the apparent

In view of
large number of exporters/
producers in the USA, sampling was provided for in
the notice of initiation for the determination of subsidi­
sation in accordance with Article 27 of the basic Regu­
lation.

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(7)

(8)

(9)

if so,

In order to enable the Commission to decide whether
sampling would be necessary and,
to select a
sample, exporters/producers in the USA were requested
to make themselves known within 15 days of the date of
the initiation of the investigation and to provide basic
information on their export and domestic sales, their
precise
to the production,
blending and trading of biodiesel and the names and
activities of all their related companies involved in the
the product
production, blending
the period 1 April 2007 to
concerned
31 March 2008 (‘IP’), as also defined in recital
(17)
below.

activities with regard

and trading of

during

More than 50 companies identified themselves in the
context of
the sampling exercise and provided the
requested information within the 15 day period. These
companies accounted for more than 80 % of the total
imports of biodiesel from the United States of America
to the Community.

Selection of the sample of cooperating companies in the USA

In

the

time

available.

In accordance with Article 27(1)(b) of the basic Regu­
lation, a sample was selected based on the largest rep­
resentative volume of exports of the product concerned
to the Community that could be reasonably investigated
accordance with
within
the companies
the basic Regulation,
Article 27(2) of
who requested to be included in the sample, the profes­
sional association of biodiesel producers in the United
States of America (the National Biodiesel Board) as well
as the Government of the United States of America were
consulted on the proposed sample. Based on the
comments received from the interested parties, seven
companies were originally chosen to constitute the
sample. It has been provisionally decided, however, that
one of the companies originally selected in the sample
should be excluded therefrom in order to ensure paral­
lelism with the sample chosen in the AD proceeding
concerning imports of biodiesel
is
noted that
said company was merely a trader of
biodiesel in contrast with the other sampled companies
who produce biodiesel. This company is, however, being
granted individual
in accordance with
examination,
Article 27(3) of the basic Regulation, and will have its
own anti-subsidy duty established. The six companies
that constitute the sample accounted for 50 % of the
total export volumes
from the USA during the IP
based on US export statistics and accounted for 73 %
of imports of biodiesel from the companies that made
themselves known as explained in recital (8).

from the USA.

It

(11)

the questionnaire within the set deadline. However, the
application was subsequently withdrawn.

1.2. Sampling of Community producers

Regarding the Community producers, in accordance with
Article 27 of the basic Regulation, a sample was selected
after consultation of the complainant on the basis of the
largest representative volume of production and sales
within the Community as mentioned in recital
(164)
below. This selection also allowed for a certain geogra­
phical spread of producers in the Community. As a
result, eleven Community producers were selected in
the sample. The Commission sent questionnaires to the
eleven companies
selected. However, one producer
originally considered for the sample had to be excluded
as
failed to provide a meaningful questionnaire
ten complete replies were received
response. Hence,
from the other companies within the set time limits.
These
sample were
considered to be representative of the overall producers
in the Community.

selected in the

ten producers

it

1.3. Parties concerned by the proceeding

(12)

The Commission sent questionnaires to all parties known
to be concerned and to all the other companies that
made themselves known within the deadlines set out in
the notice of initiation. Questionnaires were thus sent to
to the seven companies
the authorities of
originally chosen in the sample of US companies, to
the ten companies referred to in recital (10), to the 11
sampled Community producers, to 18 users as well as to
90 raw material suppliers.

the USA,

(13) Questionnaire replies were received from the authorities
of the USA, from the seven companies originally chosen
in the sample of US companies as well as from one
company requesting individual examination, referred to
in recital (10) above, ten sampled Community producers,
one user and six raw material suppliers.

(14)

The Commission sought and verified all the information
deemed necessary for a provisional determination of
subsidisation, resulting injury and Community interest.

(15)

Verification visits were carried out at the premises of the
following authorities of the United States of America:

Federal authorities of the United States of America

Individual examination of companies not selected in the sample

— Department of the Treasury (DOT)

(10)

Ten cooperating companies not selected in the sample
requested the calculation of individual margins with a
view to the application of Articles 27(3) and 15(3) of
the basic Regulation. Questionnaires were sent to the
companies concerned. Only one company replied to

— Department of Agriculture (USDA)

— Office of the United States Trade Representative

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State authorities

(b) E x p o r t i n g p r o d u c e r s i n t h e U S A

— Illinois State Authorities, Springfield

— Missouri State Authorities, Jefferson City

— North Dakota State Authorities, Bismarck

— Texas Comptroller of Public Accounts, Austin

— Texas Department of Agriculture, Austin

— Washington State Authorities, Olympia

(16)

Verification visits were also carried out at the premises of
the following companies:

— Archer Daniels Midland Company, Decatur,

Illinois

— Cargill Inc, Wayzata, Minnesota

— Green Earth Fuels of Houston LLC, Houston,

Texas

— Imperium Renewables Inc., Seattle, Washington

— Peter Cremer North America LP, Cincinnati, Ohio

— Vinmar Overseas Limited, Houston, Texas

— World Energy Alternatives LLC, Boston, Massa­

chusetts

(a) P r o d u c e r s l o c a t e d i n t h e C o m m u n i t y

(c) R e l a t e d i m p o r t e r s i n t h e C o m m u n i t y

— Biopetrol Industries AG, Schwarzheide, Germany

— Cremer Energy GmbH, Hamburg, Germany

— Diester Group

— Diester Industries SAS, Paris, France

— Mannheim Bio Fuel GmbH, Mannheim,

Germany

— Natural Energy West GmbH, Neuss, Germany

— Novaol Austria GmbH, Bruck an der Leitha,

(17)

Austria

— Novaol Srl, Milan, Italy

— Ecomotion group

— Ecomotion GmbH, Sternberg, Germany

(18)

— Daka Biodiesel a.m.b.a, Løsning, Denmark

— GATE Global Alternative Energy Germany GmbH,

Wittenberg and Halle, Germany

— Neochim SA, Feluy, Belgium

— Cargill NV, Ghent, Belgium

— ADM Europoort BV, Rotterdam, The Netherlands

— ADM Hamburg AG, Hamburg, Germany

— ADM International, Rolle, Switzerland

1.4. Investigation period

The investigation of subsidisation and injury covered the
period from 1 April 2007 to 31 March 2008 (‘investi­
gation period’ or ‘IP’). The examination of trends relevant
for the assessment of injury covered the period from
January 2004 to the end of the IP (‘period considered’).

2. PRODUCT CONCERNED AND LIKE PRODUCT

2.1. Product concerned

In the notice of initiation, the product allegedly being
subsidised was defined as fatty-acid monoalkyl esters
and/or paraffinic gasoils from synthesis and/or 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 USA (‘the product concerned’), normally declared
ex 3824 90 97,
within
ex 2710 19 41,
ex 1518 00 91,
ex 1518 00 99.

ex 1516 20 98,

3824 90 91,

codes

CN

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(19) According to the US Internal Revenue Code (4)

(d),

is defined as the monoalkyl esters of

(US.
the term
CODE), Title 26, Section 40A, point
biodiesel
long
chain fatty acids derived from plant or animal matter
which meet (a) the registration requirements for fuels
and fuel additives established by the Environmental
Protection Agency under section 211 of the Clean Air
Act (42 U.S.C 7545), and, (b) the requirements of the
American Society of Testing and Materials D6751.

(20)

(21)

(22)

Based on market and publicly available information (5),
all
types of biodiesel and biodiesel blends (a mix of
biodiesel with mineral diesel as explained in recital (22)
below), which are produced and sold in the USA are
considered to be biodiesel fuels and are part of a legis­
lative
and
energy
renewable energy and alternative fuels.

concerning

efficiency

package

The investigation showed that biodiesel produced in the
is predominantly ‘fatty acid methyl ester’ (FAME)
USA,
derived from a wide range of vegetable oils which serve
as a biodiesel feedstock (6). The term ‘ester’ refers to the
trans-esterification of vegetable oils, namely, the mingling
the oil with alcohol. The term ‘methyl’ refers to
of
in the
the most commonly used alcohol
methanol;
process, although ethanol can also be used in the
production process, resulting in ‘fatty acid ethyl esters’.
The trans-esterification is a relatively simple chemical
process but it requires the highest industrial standards
to ensure a high quality of biodiesel.

The investigation confirmed that biodiesel produced in
the USA is generally blended by the producers with
mineral diesel to produce various types of blends (here
referred to as biodiesel blends or mixtures), which are
then sold on the market to various types of customers.
It also appeared that biodiesel was sold in its pure form
to independent companies, which purchased or imported
it for blending with mineral diesel. Blending biodiesel
with mineral diesel
is a relatively simple operation
which may be accomplished for instance by mixing in
tanks at the manufacturing point prior to delivery to a
tanker truck or by a splash mixing in the tanker truck
adding the desired percentages of biodiesel and mineral
diesel or
in-line mixing with the two components
arriving at the tanker truck simultaneously.

(4) The Government of

the USA provided the complete Internal
Revenue Code updated to reflect
tax legislation up to
15 December 2006 (version December 2006), which is relevant
for the current IP.

all

(5) For

renewable

(c) Public news,

instance (a) Biodiesel handling and use guide issued on
energy
the NREL (National
September 2008 by
(b) Biomass oil analysis issued in June 2004 by the
laboratory),
NREL,
information and specifications issued on
biodiesel by the American Society of Testing Material (ASTM), (d)
Public news and information issued on biodiesel by NBB, (e) fact
sheets issued by the US Department of energy under the Clean cities
actions, etc.
(6) Virgin oils,

including esters derived from various agricultural
commodities such as corn, soybeans, sunflower seeds, cottonseeds,
canola, crambe, rapeseeds, safflowers, flaxseeds, rice bran, mustard
seeds, etc., or animal fats.

(23)

(24)

(25)

(26)

To clearly identify the various types of biodiesel blends
or mixtures, there is an internationally recognised system
known as the ‘B’ factor, which states the exact amount of
biodiesel
in any biodiesel blend: for instance, a blend
containing ‘X’% biodiesel would be labelled B‘X’, while
is referred to as B100, meaning 100 %
pure biodiesel
it was common to see 99 % (7)
biodiesel. In the USA,
of biodiesel and 1 % mineral diesel (B99) being blended
and sold on the market. Contrary to mineral diesel, pure
biodiesel should be used relatively quickly and cannot be
in stock for more than three to four months
kept
otherwise
for
consumption. Blending biodiesel with mineral diesel
allows a longer preservation of
the fuel. The 1 %
mineral diesel in the B99 is sufficiently toxic to retard
mould of the biodiesel.

and become unfit

it would oxidise

The investigation showed that whilst biodiesel and the
high-level biodiesel blends (8) are generally intended to be
sold in the US market for further blending, the low-level
biodiesel blends (9) are typically produced to be sold for
there is a
consumption in the US market. Hence,
distinction between the market
for high-level blends
and the market for low-level blends in the USA.

facie

evidence

complaint

contained prima

The
that
biodiesel and certain blends produced and sold in the
USA and exported to the Community were affecting
the complaining biodiesel
the economic situation of
producers in the Community. Consistent with the charac­
the relevant US producers and domestic
teristics of
market,
concerned
intended to cover biodiesel also when incorporated into
the
the relevant biodiesel blends. The definition of
product concerned as mentioned in the notice of
initiation and in recital (18) above, should be clarified
in order to identify the products which were intended
to be covered by the investigation.

the definition of

the product

The investigation showed that most of
the biodiesel
blends sold for direct consumption in the USA are
B20,
i.e. blends with 20 % biodiesel as explained in
recital (22) above, which can be used for Energy Policy
Act of 1992 (EPAct) (10) compliance, B6, B5 and B2.
that any diesel
Publicly available information states
engine can operate on these blends with basically no
modifications and keeping the warranty from car manu­
facturers. When used in low-level blends (between 2 % to
20 % of biodiesel) the performances of the mixture is
similar to that of mineral diesel. When a biodiesel fuel
above B20 is used in an engine, the user may experience
a certain decrease in power, torque and fuel economy
and the warranty of car manufacturers would generally
not apply in case of damages caused to the engine.

(7) In fact 99,9 % as it suffice to add 0,1 % mineral diesel to avail the

blender's credit in the USA.

(8) Basically, the blends from B99 down to B50.
(9) Basically, the blends from B2 up to B20.
(10) See Energy Policy Act of 1992.

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(27)

The investigation has shown that pure biodiesel and
high-level blends are generally not used for direct
consumption in the USA. The pure biodiesel
is
generally intended to be blended before it is sold on
the market. These blends are ultimately used in the
transport sector as a fuel
in diesel-power engines of
road vehicles such as cars, trucks, busses and also in
trains. Biodiesel can also be used as a heating fuel
in
domestic, commercial or industrial boilers and as a fuel
for generators to produce electricity. Tests are currently
being conducted as to the possibility to use biodiesel
blends in aircrafts.

esters

(28) Hence, the product concerned by the investigation should
be defined as
and/or
fatty acid monoalkyl
paraffinic gasoil obtained from synthesis and/or hydro-
treatment, of non-fossil origin, commonly known as
‘biodiesel’, whether in pure form or in blends, which
are above B20. In other words, the product concerned
covers pure biodiesel (B100) originating in the USA and
all blends above B20, namely blends which contain more
that 20 % biodiesel originating in the USA (‘the product
concerned’). This threshold is considered to be appro­
priate to allow a clear distinction between the various
types of blends which are available on the US market.

(29)

(30)

(31)

It has been found that all types of biodiesel and the
biodiesel
in the blends covered by this investigation,
despite possible differences in terms of raw material
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
in the
the same purposes. The possible variations
product concerned do not alter its basic definition,
its
characteristics or the perception that various parties have
of it.

The product concerned is
3824 90 91,
ex 1516 20 98, ex 1518 00 91, ex 1518 00 99.

falling within CN codes
ex 2710 19 41,

ex 3824 90 97,

2.2. Like product

It was found that the products produced and sold on the
domestic market of the USA, which are covered by this
investigation, have similar basic physical, chemical and
technical characteristics and uses as
those exported
from this country to the Community market. Similarly,
the products manufactured by the Community industry
and sold on the Community market have similar basic
physical, chemical and technical characteristics and uses
when compared to those exported to the Community
from the country concerned.

(32)

It has been claimed that certain users,
in particular in
Germany, are directly using pure biodiesel (B100) as a
cheaper alternative to the use of mineral diesel or the
consumption in the
usual blends used for direct
this claim
Community market. The examination of

of

by

the

that most

sales made

the
showed
Community producers in the Community market were
mainly intended to companies which were blending it
with mineral diesel. The fact that certain fleet owners
the
rather
revert
an exception at
Community level. Rather
than substituting mineral
diesel, biodiesel
is a complementary product on the
Community market.

to B100 is

(33)

This does not change the fact that the various types of
the product concerned produced in the USA and
exported to the Community are interchangeable with
those produced and sold in the Community by
Community biodiesel producers. There is no significant
difference in the uses and the perception by operators
and users in the market which are such as to alter the
definition of the like product.

(34) One interested party alleged that the product concerned,
in particular pure biodiesel, has different physical and
chemical characteristics than the biodiesel produced in
the Community. While the EC production of biodiesel
would be based on rapeseed oil, US producers would
use only soybean oil. Therefore these two types of
product would not be interchangeable and would not
directly compete with each other in the Community
market. The interested party pointed in particular to
the fact that the cold flow properties and the iodine
values would be different.

(35)

The Commission investigated this claim and found the
following:

(a) The product concerned and the Community like
product share very similar basic characteristics and
sales channels,
are sold via similar or
in the Community
namely to similar customers
market;

identical

(b) The product concerned and the Community like
product both serve the same or very similar end-
uses (see recital (27) above);

the CFPP of

(c) As to the cold flow properties, it should be clarified
that it refers to the Cold Filter Plugging Point (CFPP)
which is the temperature at which a fuel will cause a
fuel filter to plug due to fuel components, which
have begun to crystallize or gel. The investigation
revealed that
the Community like
product is lower than that of the biodiesel exported
from the USA. However, this is a minor difference
which can easily be compensated either by mixing
different types of biodiesel or by using additives in
pure biodiesel,
time. The
difference in CFPP practically does not play any
role in most of the blends sold in the Community
market.

in particular

in winter

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(d) Regarding the iodine value which is a measurement
for the stability of the fuel against oxidation, it was
found that
the values between rapeseed oil and
soybean oil correlate to some extent: numbers
range from 94 to 120 for rapeseed oil and from
soybean oil. While the main
117 to 143 for
feedstock used in the Community is rapeseed,
it
has to be noted that both Community and US
producers use also a wide variety of feedstock to
produce biodiesel. Often various types of biodiesel
are mixed to obtain a more homogeneous product.

(36) Given that ‘likeness’ does not require that products are
identical in all respects according to Article 1(5) of the
basic Regulation, any minor variation in the various
product
to change the overall
finding of likeness between the product concerned and
the Community like products.

types is not sufficient

(37)

Therefore no differences were found between the various
types of the product concerned and the Community like
products sold on the Community market which would
lead to the conclusion that the products produced and
sold on the Community market is not a like product,
sharing the same or very similar basic physical, chemical
the
and technical characteristics as to the types of
product concerned produced in the USA and exported
to the Community. It is therefore provisionally concluded
that all
types of biodiesel are considered to be alike
within the meaning of Article 1(5) of the basic Regu­
lation.

3. SUBSIDISATION

State Schemes

(a)

Illinois

Illinois biodiesel tax exemption

(b) Missouri

Missouri qualified biodiesel producer incentive fund

(c) North Dakota

(i) North Dakota biofuels partnership in assisting

community expansion loan Program

(ii) North Dakota biodiesel production equipment

tax credit

(iii) North Dakota biodiesel income tax credit

(iv) North Dakota biodiesel equipment tax exemption

(d) Texas

(i) Texas ethanol and biodiesel blend tax exemption

(ii) Texas

fuel ethanol and biodiesel production

incentive program

3.1. Introduction

(e) Washington

(38) On the basis of

the information contained in the
complaint and the replies to the Commission's ques­
schemes, which
tionnaire,
allegedly involved the granting of subsidies, were inves­
tigated:

following

federal

the

(i) Washington State energy freedom program

(ii) Washington
exemption

State

biofuels

production

tax

Federal Schemes

(iii) Washington state biofuels retail tax exemption

(a) Excise tax/Income tax credit

(iv) Washington State biofuels tax deduction

(b) Small Agri-biodiesel Producer Income tax credit

(40)

(c) The U.S. Department of Agriculture Bioenergy

Program

(39) On the basis of

the information contained in the
complaint and the replies to the Commission's ques­
tionnaire, the following state schemes, which allegedly
involved the granting of subsidies, were also investigated:

with

pre-initiation

consultations

In regard to the other state schemes listed in point 3 of
the notice of initiation, as explained in recital (4) above,
some of
them were excluded from the investigation
the
following
Government of the United States of America. In respect
of the remaining state schemes, the companies in the
sample and the company referred to in recital (9) that
has been granted individual examination stated that they
had not received any benefits thereunder during the IP
and no evidence was found to the contrary.
It was
therefore provisionally decided that
there were no
grounds to further
investigate these schemes in this
investigation.

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FEDERAL SCHEMES

3.2. Excise tax/Income tax credit

(a) Legal basis

(41)

Title 26, Section 40A of the US Code (U.S.C.) is the legal
basis for a tax credit scheme for biodiesel blenders,
retailers and end-users.
It provides for the following
biodiesel fuel credits:

(46)

(42)

(43)

(44)

(i) the biodiesel mixture credit;

(ii) the biodiesel credit;

(iii) the small agri-biodiesel producer credit.

The small agri-biodiesel producer income tax credit is a
tax credit which applies only to small agri-biodiesel
producers. This scheme is dealt with in recitals (64) to
(72) below.

Section 202(a) of
Extension Act 2008 provides
mentioned in recital
31 December 2009.

the Energy and Improvement and
tax credits
(41) above are available until

that

the

(b) Eligibility

identifies

in recital

the product

In order to be eligible for the biodiesel mixture credit
(41) above, a company
referred to under (i)
fuel,
must create a mixture of biodiesel and diesel
which mixture is sold as a fuel or for use as a fuel.
The person claiming the incentive must obtain a certifi­
cation from the producer or importer of the biodiesel
and the percentage of
that
in the product. This credit
biodiesel and agri-biodiesel
takes
if a
tax credit or,
company's excise tax liability is less than the total
excise tax credit,
the company may then claim the
residual credit as a refundable income tax credit. A
the
refundable income tax credit
taxpayer’s
is
refundable because the excess credit can be disbursed
to the taxpayer as a direct cash payment if the credit is
greater than the individual’s tax liability.

income taxes or a direct payment.

form of an excise

is a credit against

the

It

(45)

The biodiesel credit referred to under (ii) in recital (41)
above is a non-refundable income tax credit for retailers
or end-users of neat (pure) biodiesel. The neat biodiesel
credit is available only to the person who places the
gallon of neat biodiesel into the fuel tank of a vehicle
or uses it as fuel. It should be noted that also biodiesel
producers, producing their own biodiesel, would be able

the
to receive this credit. Thus to claim the credit,
biodiesel producer must be acting as either a retailer
(putting the gallon of biodiesel
into the end-user's gas
tank) or an end-user (e.g. putting the biodiesel into his
own vehicles).

(c) Practical implementation

the retailer

In regard to the biodiesel credit with respect to unmixed
(neat) biodiesel,
(or a biodiesel producer
acting as a retailer) or end user of unblended biodiesel
can claim USD 1,00 per gallon for unmixed (neat) agri-
biodiesel or USD 0,50 per gallon for other unmixed
(neat) biodiesel as a non-refundable general business
income tax credit. A non-refundable general business
credit is a credit against the business’s income tax. It is
the business’s credits are
non-refundable because,
if
greater than its tax liability, the excess credit cannot be
disbursed to the business as a direct cash payment.

(47)

The investigation revealed that none of the companies in
the sample or the company granted individual examina­
tion as referred to in recital (9) availed themselves of the
biodiesel credit with respect to unmixed (neat) biodiesel.
Consequently, this part of the scheme (biodiesel credit) is
not further evaluated in the context of the present inves­
tigation.

(48) All the investigated companies received tax credits under
the biodiesel mixture credit for biodiesel mixtures sold
for use as fuel.

(49)

Biodiesel that is mixed with mineral diesel fuel is entitled
to a biodiesel mixture excise tax or income tax credit.
The credit prevailing during the investigation period was
USD 1 per gallon of unmixed agri-biodiesel (11), or USD
0,50 (12) for each gallon of other unmixed biodiesel, used
in the fuel mixture. Thus the final tax credit for the
blended fuel depends on the proportion of biodiesel it
contains. The minimum requirement, and what is the
most common practice,
is to add 0,1 % mineral diesel
to 99,9 % biodiesel (this blended product is referred to as
B99 in the USA), as this ensures that the maximum tax
in a
is obtained. The proportion of biodiesel
credit
blended product qualifies for the tax credit (e.g. 100
gallons of B99 will contain 99,9 gallons of biodiesel
and be eligible for a tax credit of USD 99,90). The
conversion of biodiesel from a pure product (B100) to
a mixed product (B99) is a simple process. It implies the
into pure biodiesel
addition of 0,1 % of mineral diesel
and does not entail a major
the
product concerned.
It is the activity of blending that
triggers the eligibility for the credit.

transformation of

(11) In the U.S.C., the term agri-biodiesel refers to a biodiesel derived
solely from virgin vegetable oils,
including esters derived from
corn, soybeans, sunflower seeds, cotton seeds, canola, crambe,
rapeseeds, safflowers, flaxseeds, rice bran, and mustard seeds, and
from animal fats. The investigation showed that more than 98 % of
the biodiesel exported from the USA to the Community in the IP
was agri-biodiesel.

(12) The credit of USD 0,50 per gallon has been increased to USD 1,00
per gallon by the Energy Improvement and Extension Act of 2008
(effective from 1 January 2009).

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(50)

(51)

(52)

The producers of biodiesel can claim the incentive when
they are themselves performing a blending activity. The
producer must blend the neat biodiesel with mineral
diesel
to the incentive,
there are no differences between blended biodiesel
destined for domestic sale and sale for export.

In terms of entitlement

fuel.

(55)

Companies that do not produce but rather purchase pure
biodiesel and blend it into a biodiesel mixture are also
entitled to the tax credit. Such companies must obtain a
certificate from the producer (and if applicable any inter­
vening resellers) of the biodiesel in which the producer
effectively certifies not to have claimed the tax credit.
This certificate is transferable entitling the holder to a
USD 1 per neat biodiesel gallon tax credit.

The incentive can be claimed either as a credit against
excise or income tax liability or as a direct cash payment.
The total amount of
the incentive remains the same
(USD 1 per gallon) whether the incentive is claimed as
an excise tax credit, an income tax credit, a direct
payment
to the taxpayer, or any combination of the
foregoing.

(56)

(57)

(53) During the period of

investigation, most of

the
companies
received direct payments based on the
quantity of biodiesel blended while others received both
a tax reduction (in the sense that the biodiesel mixture
credit partly was used to offset an excise or income tax
liability) and a direct payment. For
the concerned
companies, the tax liabilities were small compared to
the amount of biodiesel mixture credit claimed; conse­
quently, most of the incentive was received as a direct
payment and a smaller amount as a tax reduction.

(54)

the biodiesel

the tax credit,

in which the producer certifies,

The U.S.C. provides that the biodiesel mixture credit will
not be granted unless the company (blender) that makes
the mixture of biodiesel and mineral diesel obtains a
certificate (‘Certificate for Biodiesel’) from the producer
of
inter
alia, the quantity of biodiesel to which the certificate
is agri-biodiesel or
relates and whether the biodiesel
biodiesel other than agri-biodiesel.
If a company that
produces biodiesel subsequently blends that biodiesel
that
with mineral diesel and claims
company will provide the Certificate for Biodiesel with
the required documentation to make a claim for credit. A
person that receives a Certificate for Biodiesel, and subse­
quently sells the biodiesel without producing a biodiesel
mixture, is to provide the Certificate for Biodiesel to the
purchaser as well as providing a ‘statement of biodiesel
reseller’. In other words, the company that blends the
mixture and claims the tax credit may obtain the Certifi­
cate for Biodiesel either directly from the producer of the
biodiesel or indirectly from a biodiesel reseller. Thus, this
certificate is transferable entitling the holder to a USD 1
the number of gallons of
per gallon tax credit
biodiesel used by the
in producing any
biodiesel mixture.

claimant

for

The investigation revealed that there was a clear price
difference between pure biodiesel
(B100) and blended
biodiesel (B99). Though the only difference between the
two types of products is the addition of 0,1 % mineral
fuel to create B99, sales of B100 were in the
diesel
region of USD 1 per gallon more expensive than B99.
The US biodiesel market appeared to be very transparent.
The economic operators on the biodiesel market in the
United States of America know that
the biodiesel
blenders receive a USD 1 per gallon tax credit. For
invoices for sales of
some of the sampled companies,
indicated the price of
B100 on the domestic market
the product as well as the blender's credit,
the
credit was effectively sold to the purchaser of B100.
is
it
On this basis,
subsidised through this tax credit.

is considered that all biodiesel

i.e.

(d) Conclusion

The biodiesel mixture credit has to be regarded as a fiscal
incentive whether or not it is given as a cash payment or
has to be offset against tax liabilities.

This scheme is considered to be a subsidy in the sense of
Article 2(1)(a)(i) and Article (2)(1)(a)(ii) of the basic Regu­
lation as the scheme provides a financial contribution by
the Government of the United States of America in the
(cash payments) and revenue
form of direct grants
foregone which is otherwise due
(tax offset). The
incentives confer a benefit on the companies receiving
them.

(58)

The scheme is limited to companies that are involved in
the biodiesel industry and is therefore considered to be
specific under Article 3(2)(a) of the basic Regulation and
therefore countervailable.

(e) Calculation of the subsidy amount

(59)

The biodiesel mixture credit was granted by reference to
the quantities of biodiesel used in a blend, i.e. USD 1 per
gallon as all the companies concerned used agri-biodiesel.
The amount of benefit in the IP has been calculated on
the basis of USD 1 per gallon of neat biodiesel sold in
the IP, whether sold as pure biodiesel
(B100) or in a
blend. In order to establish the benefit, the addition of
mineral diesel in the blend was taken into account when
calculating the amount of subsidy.

(60) One of

sampled biodiesel producers

indirectly
the
received benefits under
it used a
this
factoring system to cash the biodiesel credit to which it
was
entitled. The blending was outsourced to an
unrelated company which claimed the credit and then
paid cash to the company concerned less a factoring fee.

scheme as

(61)

The amount of subsidy has been allocated over the total
sales of the product concerned in the IP.

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(62)

Traded products have been excluded from the above
calculation.

(69)

The scheme is
biodiesel and is
under Article 3(2)(a) of
therefore countervailable.

that produce
limited to companies
therefore considered to be specific
the basic Regulation and

(63)

The amount of countervailable subsidies obtained under
this scheme, expressed ad valorem, for the investigated
companies, ranged from 28,4 % to 41,1 %.

3.3. Small Agribiodiesel Producer Income tax credit

(a) Legal basis

(64)

Title 26, U.S.C., Section 40A also provides for a small
agri-biodiesel producer income tax credit.

(b) Eligibility

(65)

This scheme is only available to small producers of neat
trader who
agri-biodiesel. Any mixer, blender, or
purchases but does not produce biodiesel is not eligible
for the credit. A small producer is any person whose
than 60 million
production capacity is not more
gallons of agri-biodiesel per year. The
small agri-
biodiesel producer can claim a USD 0,10 non-refundable
general business income tax credit for each gallon of
agri-biodiesel produced. The qualified production of a
producer may not exceed 15 million gallons in any
taxable year. For the producer to claim the credit, the
agri-biodiesel must be used as a fuel, sold for use as a
fuel, or used to create a mixture of biodiesel and diesel
fuel that is used as a fuel or sold for use as a fuel.

(c) Practical implementation

(66)

Claims for the non-refundable general business income
is
tax credits are made annually when the claimant
making its
for each
income tax return. The credit
gallon of biodiesel produced by the claimant during the
tax year, up to a maximum of 15 million
relevant
gallons,
liability for
is offset against
If the claimant’s tax liability is
corporate income tax.
less than the amount of credit claimed,
the excess
amount can be carried forward to subsequent tax years.

the claimant’s

(67) During the investigation period, one of the companies in
the sample availed itself of the scheme. The company
used the credit to reduce its income tax liability.

(70)

(71)

(e) Calculation of the subsidy amount

The subsidy amount was calculated on the basis of the
amount of income tax reduction for the fiscal tax year
ending during the period of investigation.

then been
The amount of
allocated over the total sales of the product concerned
during the IP.

subsidy (numerator) has

(72)

The company concerned obtained subsidies from this
scheme during the investigation period of 0,4 %.

3.4. The US Department of Agriculture Bioenergy

Program

(a) Legal basis

(73)

The US Department of Agriculture (‘USDA’) Bioenergy
Program was originally authorized and funded by the
USDA's Commodity Credit Corporation (‘CCC’) under
its general authority under Section 5 of
the CCC
Charter Act, codified in the U.S. Code (Title 15,
Chapter 15, Subchapter II, Section 714c(e)). This statute
sets forth the exclusive purposes for which the CCC is
authorized by law to use its general powers. Specifically,
the scheme was based on the authority in section 5(e) of
the Act, which authorizes the CCC to:

‘Increase the domestic consumption of agricultural commodities
(other than tobacco) by expanding or aiding in the expansion
of domestic markets or by developing or aiding in the devel­
opment of new and additional markets, marketing facilities,
and uses for such commodities.’

(74)

The CCC published a final rule that established regu­
lations for
the scheme, which were codified in the
Code of Federal Regulations as 7 C.F.R. § 1424.

(75) As originally conceived,

the

the CCC used Section 5(e)
year
funding
for
2002 (13). However,
in 2002, the US Congress speci­
fically authorized and funded the continuation of the
scheme up to and including fiscal year 2006.

scheme only up to fiscal

(d) Conclusion

(68)

This scheme is considered to be a subsidy in the sense of
Article (2)(1)(a)(ii) of the basic Regulation as the scheme
provides a financial contribution by the Government of
the United States of America in the form of revenue
foregone which is otherwise due. The incentive confers
a benefit on the companies receiving them.

(76)

The scheme was in operation from 1 December 2000 to
June 2006. It was administered by USDA's Farm Service
Agency (FSA).

(13) Fiscal years for the purpose of the Bioenergy Program ran from 1

October to 30 September of the following year.

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(b) Eligibility

producers were

(77) When the program was in operation, all commercial
participate.
evidence of
the purchase and
that
related
In particular, biodiesel producers were

bioenergy
Producers were
production, as well as evidence of
use
commodities
of
production.
required to produce and sell biodiesel commercially.

eligible
to provide

agricultural

required

to

to

(78)

standard of

The statute defined ‘biodiesel’ as a monoalkyl ester
meeting an appropriate
the American
Society for Testing and Materials. To be eligible, a
producer had to meet certain requirements with regard
to the keeping of records and to provide required infor­
mation, as well as granting permission to CCC to verify
such information. The relevant regulations set forth the
details of the procedures to be followed for signing up
for the program, applications for payments and reporting
procedures that recipients were required to follow in
order to be eligible for payments.

(79)

The 2002 statute established that eligible commodities
that
could be used to produce bioenergy (either
biodiesel or fuel grade ethanol) included:

— Whet,

rice,
corn, grain sorghum, barley, oats,
soybeans, sunflower see, rapeseed, canola, safflower,
flaxseed, mustard,
and
crambe,
cottonseed;

sesame

seed,

producers had to provide documentation of their net
purchases of eligible commodities and net production
of biodiesel during the relevant periods.

(83)

combination of

The scheme provided payments to biodiesel producers
based on a
their base biodiesel
production and increased biodiesel production in the
corresponding period of the prior fiscal year. For fiscal
year 2006, companies only received incentives from
increased biodiesel production. Based on each recipient's
biodiesel production and increased biodiesel production
from eligible agricultural commodities, USDA calculated
the payments amount as set forth in the regulations.

(84) As the scheme was terminated in June 2006, none of the
companies in the sample or the company referred to in
recital (9) that has been granted individual examination
received incentives under this scheme during the period
of
investigation. When the scheme was in operation,
three of the sampled companies received payments in
the period from 2002 to 2006. One company received
company
direct payments
received indirect payments under
scheme, as a
company that benefited from this scheme passed some
of the amounts received to a company in the sample as a
profit-sharing agreement due to tolling arrangements
between the two companies. A third company only
received a small amount in fiscal year 2006.

from the FSA. Another

this

— A cellulosic commodity, such as hybrid poplar or

switch grass;

(85)

— Fats, oils, greased (whether or not recycled) derived

from agricultural products; and

— Any animal by-product, other than fats, oils and
greases, that it's determinated to be used to produce
bioenergy.

(80) According to the authorities of

the United States of
America, most of the biodiesel producers who received
incentives under this scheme used soybeans.

(81) All commercial biodiesel producers were eligible to parti­
cipate, provided they followed the application and
reporting procedures described above. The government
did not exercise any discretion besides ensuring that
the eligibility criteria were met.

(c) Practical implementation

(82)

In each fiscal year biodiesel producers could sign up for
the scheme by submitting the relevant
forms. After
signing up, biodiesel producers submitted quarterly appli­
incentives. The biodiesel
cations

for payment of

(d) Conclusion

It was found that incentives were provided under this
scheme to certain biodiesel producers over a number
of years based on their production of biodiesel and
there was clearly a financial contribution from the
Government of the USA in the form of grants which
were specific to the biodiesel
industry. The subsidies
are, however, considered to be recurring and considered
to be expensed each particular year; consequently, no
benefit was received during the period of investigation.

(86)

It was also found that the scheme was re-introduced for
the fiscal year 2009 (October 2008-September 2009).
However, given that
investigation runs
from April 2007 to March 2008, there are no grounds
to countervail any benefits that might accrue under the
re-introduced scheme.

the period of

STATE SCHEMES

I n t r o d u c t i o n

Four of the state schemes that were investigated were not
used by any of the companies in the sample nor the
In these
company granted individual
circumstances,
these schemes have not been further
analysed. These schemes are: North Dakota biodiesel
equipment
tax exemption; Washington State energy
freedom program; Washington state biofuels retail tax
exemption and Washington State biofuels tax deduction.

examination.

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(87)

(88)

(89)

(90)

3.5. Illinois biodiesel tax exemption

‘sales tax’
In the state of Illinois,
is comprised of two
separate but complementary taxes. A retailer of tangible
personal property (14) incurs a Retailers’ Occupation Tax
(‘ROT’) liability and the purchaser of tangible personal
property incurs a corresponding Use Tax liability.

The legal basis for the ROT is 35 Illinois Compiled
Statutes (‘ILCS’), Chapter 120, Section 2 while the basis
for the Use Tax is 35 ILCS, Chapter 105, Section 3-45.
‘a tax is
In accordance with the former provisions,
imposed upon persons engaged in the business of selling at
tangible personal property…’. The latter provisions
retail
state that
tax from users by
adding the tax to the selling price of tangible property, when
sold for use, …’.

retailers ‘shall

collect

the

The rate of ROT during the IP was 6,25 % of gross
receipts from sales of tangible personal property made
in the course of business, plus any applicable local taxes
in counties in Illinois (35 ILCS, Chapter 120, Section 2-
10).

The rate of Use Tax during the IP was 6,25 % of either
the selling price or the fair market value, if any, of the
tangible personal property, plus any applicable local taxes
in counties in Illinois (35 ILCS, Chapter 105, Section 3-
10).

(91)

In effect, a company that would collect the Use Tax on
its sales would pay this tax to the Illinois Department of
Revenue as ROT.

(a) Legal basis

(92)

In regard to the imposition of ROT on biodiesel and
biodiesel blends, 35 ILCS, Chapter 120, Section 2-10
provides that the proceeds of sales made on or after
1 July 2003 and on or before 31 December 2013 shall,

(94)

Exemptions from ROT and the Use Tax are also provided
for in the above mentioned legislation for proceeds from
sales of other products.

(b) Eligibility

(95) Anyone that is a retailer or purchaser of biodiesel fuel is
eligible to claim the exemptions mentioned in recitals
(92) and (93) above.

(96)

(97)

(c) Practical implementation

The exemption provisions mentioned in recitals (92) and
(93) above provide that the Use Tax is not collected on
retail sales of biodiesel/biodiesel blends. By virtue of the
that retail sales of biodiesel/biodiesel blends are
fact
exempt from Use Tax, companies that sell biodiesel/bio­
diesel blends (including producers/blenders) to retailers
are not liable to pay ROT on their sales of biodiesel/bio­
diesel blends.

(d) Conclusions

It is clear that the exemption from the Use Tax and the
ROT is triggered by retail sales of biodiesel/biodiesel
blends. In this regard, the benefit from the exemptions
is therefore received by consumers of the product.
In
these circumstances,
in accordance with Article 1(1) of
the basic Regulation, no countervailing duty may be
imposed for the purpose of offsetting this subsidy as it
was not granted, directly or indirectly, for the manu­
facture, production, export or transport of the product
concerned.

(98) One of

the sampled cooperating companies did not
collect the Use Tax on its sales of biodiesel/biodiesel
blends to retailers and consequently did not pay ROT
on these sales. However,
the conclusions
reached in recital (97) above, no countervailable benefit
is considered to have accrued to this company.

in light of

(i) for blends with no less than 1 % and no more than
10 % biodiesel, only be liable for the tax on 80 % of
the proceeds, and

fund

(a) Legal basis

3.6. Missouri qualified biodiesel producer incentive

(ii) for 100 % biodiesel and biodiesel blends containing
more than 10 % but no more than 99 % biodiesel,
not be liable to ROT.

(99)

In 2002, under Missouri State Law (‘RSMo’)
(Chapter
142, Section 142.031), the ‘Missouri Qualified Biodiesel
Producer Incentive Fund’ (‘the Fund’) was established. The
purpose of the Fund is to ‘…provide economic subsidies to
Missouri qualified biodiesel producers…’.

(93)

In regard to the imposition of the Use Tax on biodiesel
the same partial/full exemptions
and biodiesel blends,
apply as for the ROT above (35 ILCS, Chapter 105,
Section 3-10).

(14) “Tangible personal property” is not defined in Illinois legislation but is

taken to be any physical property.

(100) Each fiscal year (which runs from 1 July of one year to
30 June of the following year) the Missouri Department
of Agriculture makes available to Missouri Qualified
Biodiesel Producers (‘MQBPs’) all monies appropriated
to the Fund by the Missouri legislature and signed into
law by the Governor of Missouri.

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(b) Eligibility

(101) As at the start of the IP (1 April 2007), a MQBP was a

facility that produced biodiesel and

licence takes effect from the date all requested infor­
mation has been received and approved by the MDA
and expires when the MQBP has received sixty months
of grants or no longer complies with the eligibility
provisions.

(i) was registered with the United States Environmental

Protection Agency (‘USEPA’) and

(ii) was at least fifty-one percent owned by agricultural
producers who were residents of
the state of
Missouri and who were actively engaged in agri­
cultural production for commercial purposes; or

(iii) at least eighty percent of the feedstock used by the
facility originated in the state of Missouri. Feedstock
means a Missouri agricultural product as defined in
definition
section 348.400 RSMo. This
includes,
vegetable
products, either in their natural or processed states,
that had been produced, processed, or otherwise had
value added to it in the state of Missouri.

latter
and

agricultural

inter

alia,

(102) These eligibility criteria were amended, effective from
28 August 2007, by replacing (iii) above with the
following and adding an additional condition ((iv) below):

(iii) at least eighty percent of the feedstock used by the
facility originated in the state of Missouri. Feedstock
viticultural,
means
vegetable,
or
poultry product either in its natural or processed
state.

an agricultural, horticultural,

aquacultural,

livestock,

forestry,

(iv) met all of the following:

— had registered with the Missourian Department

of Agriculture by 1 September 2007;

(104) Once a licence has been issued, a MQBP may apply for a
producer incentive grant by requesting a monthly grant
application form from the MDA, Qualified Biodiesel
Producer
producer
Fund. To
incentive grant for a particular month, a MQBP must
complete the prescribed grant application form.

obtain a

Incentive

(105) The MQBP must submit the completed grant application
form to the MDA no later than fifteen days following the
last day of the month for which the grant is sought.
Applications submitted after this deadline are automa­
tically rejected.

is

(106) The amount of each monthly grant is calculated by first
determining the number of gallons of qualified biodiesel
produced from Missouri agricultural products in the
preceding month of the fiscal year, as certified by the
MDA. That number
then multiplied by the per
gallon credit established in Section 142.031, RSMo
(state law) and Title 2 of the Code of State Regulations
(‘CSR’) 110-2.010. Each MQBP shall be eligible for a total
grant in any fiscal year equal to USD 0,30 per gallon for
the first
fifteen million gallons of qualified biodiesel
produced from Missouri agricultural products in the
fiscal year, plus USD 0,10 per gallon for
the next
fifteen million gallons of qualified biodiesel produced
from Missouri agricultural products in the fiscal year.
All such qualified biodiesel produced by a MQBP in
excess of thirty million gallons in a fiscal year shall not
be applied to the computation of a grant.

(107)

If available monies are insufficient to pay all MQBPs the
maximum monthly grant allowed by law, available
monies will be
each MQBP
receives a share of monies proportionate to the eligible
biodiesel production of all MQBPs for that month.

apportioned so that

— had begun construction of
1 November 2007; and

the facility before

(108) The MDA strives to pay all grants for a particular month
within thirty days of receipt and approval of the grant
application form.

— had begun production of biodiesel before

1 March 2009.

(d) Conclusions

(c) Practical implementation

(103) To obtain a grant from the fund, an MQBP must be, inter
alia,
licensed. A license is issued to a MQBP when it
fulfils the above-mentioned criteria and provides ad­
ditional information to the state of Missouri Department
of Agriculture (‘MDA’) including the company’s USEPA
number, federal employer identification number, etc. The

(109) This scheme is considered to a subsidy in the sense of
Article 2(1)(a)(i) of the basic Regulation as the scheme
provides a financial contribution by the government of
the state of Missouri (15) in the form of direct grants. The
grants confer a benefit on the companies receiving them.

(15) The term ‘government’ for the purposes of this regulation is inter­
preted in accordance with Article 1(3), second paragraph, of the
basic Regulation which provides that
is
defined,
this Regulation as a government or any
public body within the territory of the country of origin or export’.

‘The term “government”

for the purposes of

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(110) The scheme is limited to biodiesel producers and is
therefore considered to be specific under Article 3(2)(a)
of the basic Regulation and therefore countervailable.

could qualify for a total maximum of USD 400 000 of
interest buy down funds per loan.

(e) Calculation of the subsidy amount

(111) One of the sampled cooperating exporters benefited from
this scheme in the IP. The amount of the grants received
in the IP has been allocated over the total sales of the
product concerned during the IP. The amount of coun­
tervailable
scheme,
obtained
expressed ad valorem, for this company was 3,8 %.

subsidies

under

this

3.7. North Dakota biofuels partnership in assisting
community expansion (PACE) loan Program

(112) The Biofuels PACE scheme, which became effective from
July 2007, was preceded by the Biodiesel partnership in
assisting community expansion loan scheme (‘Biodiesel
PACE’ which was in place from July 2005 until
June
2007).

(a) Legal basis

(113) The Biodiesel PACE scheme was established by the North
Dakota legislature with the establishment of the North
Dakota Century Code (‘N.D.C.C.’) 6-09.17 ‘Biodiesel Part­
nership in Assisting Community Expansion’
in 2005.
Under this Code, a biodiesel partnership in assisting
community expansion fund (‘the fund’) was established.

(114)

In 2007, following the passing of Senate Bill No 2180,
the above mentioned North Dakota Century Code 6-
09.17 was amended and the Biodiesel PACE scheme
was modified with effect from July 2007 and was re-
named the Biofuels PACE scheme.

(118) The Biofuels PACE scheme, was established to buy down
rate on loans to biodiesel and ethanol
the interest
production facilities,
biofuels
livestsock operations,
retailers and grain handling facilities. Biodiesel production
facilities that meet the relevant criteria are eligible for this
scheme.

(c) Practical implementation

(119) Monies in the fund are used to reduce the borrower's
interest rate on loans made by a local
lender and the
Bank of North Dakota (BND), which is a public entity
owned by the state of North Dakota. The loan is handled
through a local lending institution — bank, savings and
loan, credit union, or farm credit services — which will
request the participation of BND. The local lending insti­
tutions may be either public or private institutions.
the lender and BND
Together with the borrower,
loan,
establish the
terms
including the
then
interest
requests
the fund be used to buy down the
that
interest rate. In effect, the application process is made
by a lead lender (typically a private bank) to the BND.

the
lead lender

and conditions of

rate. The

(120) A company pays the reduced interest repayments to the
lead lender. The lead lender will then receive from the
BND (out of
the difference between the
repayment that would normally be due on the basis of
‘normal’ interest rate and the reduced amount paid by the
company.

the fund),

(121) The implementation of both the Biodiesel PACE and the
Biofuels PACE is as outlined in the preceding two recitals.

(b) Eligibility

(115) Under the Biodiesel PACE scheme, a biodiesel production

facility was eligible for funding from the fund.

(122)

(116) A ‘biodiesel production facility’ was defined as

‘a
corporation, limited liability company, partnership, indi­
vidual or association involved in production of diesel fuel
containing at
five percent biodiesel meeting the
specification adopted by the American society for
testing and materials’.

least

(d) Conclusions

biodiesel

partnership

In regard to the Biodiesel PACE and the Biofuels PACE,
there is a financial contribution by the state authorities of
North Dakota as the authorities make payments to a
funding mechanism (the
in
assisting community expansion fund or the biofuels part­
nership in assisting community expansion fund). Said
fund is used to finance part of the interest repayments
due by a company on loans. Eligibility funding from
both schemes is limited to, inter alia, biodiesel manufac­
turers. In these circumstances, both schemes are specific
under Article 3(2)(a) of the basic Regulation. There is a
benefit to companies availing from this scheme in the
form of reduced interest repayments.

(117) Funding took the form of an interest rate buy down
(reduction in interest rate charged) on loans made by a
lead (commercial)
institution in participation
with the Bank of North Dakota. The latter bank is a
North Dakotan state institution. Recipients of
loans
could receive an interest buy down of 5 % below the
note rate. An individual biodiesel production facility

financial

(e) Calculation of the subsidy amount

(123) One company availed of benefits under the Biodiesel
PACE in the IP. However, the benefit to the company
was considered to be negligible being less than 0,1 %.

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3.8. North Dakota biodiesel production equipment

(c) Practical implementation

tax credit

(a) Legal basis

(124) The legal basis for North Dakota's corporate tax is
contained in the North Dakota Constitution Article X,
§3, and N.D.C.C. §57-38-30. The tax credit under this
scheme, which is available for biodiesel retrofitting of
equipment, is based upon N.D.C.C. §57-38-30.6.

(b) Eligibility

(125) The taxpayer must be a corporation subject to North

Dakota income tax.

(c) Practical implementation

(126) The income tax credit is applied against the tax liability
in the amount of ten percent per year for five years of
the direct costs incurred by a taxpayer after 31 December
2002. Costs are the taxpayer’s direct costs to adapt or
add equipment to retrofit an existing facility or adapt a
new facility within the state for the purpose of producing
or blending diesel fuel containing at least 2 % biodiesel
fuel volume.

(d) Conclusions

(127) This scheme is limited to taxpayers that engage in
to retrofit an existing
adapting or adding equipment
facility or adapting a new facility within the state for
the purpose of producing or blending diesel
fuel
containing at
fuel volume. The
least 2 % biodiesel
scheme is therefore specific under Article 3(2)(a) of the
basic Regulation. This scheme is considered to a subsidy
in the sense of Article 2(1)(a)(i) of the basic Regulation as
government revenue that
is otherwise due (corporate
income tax) is foregone or not collected. The reduced
tax liability of the company confers a benefit.

(e) Calculation of the subsidy amount

(128) One company availed of this scheme in the IP. However,
to the company was considered to be

the benefit
negligible being less than 0,1 %.

3.9. North Dakota biodiesel income tax credit

(a) Legal basis

(131) A taxpayer is entitled to a credit against tax liability of
USD 0,05 per gallon of blended biodiesel fuel, provided
the biodiesel is at least 5 % by volume (B5).

(d) Conclusions

(132) This scheme is considered to be a subsidy in the sense of
Article 2(1)(a)(i) of the basic Regulation as government
revenue that is otherwise due (corporate income tax) is
foregone or not collected. The reduced tax liability of the
company confers a benefit.

(e) Calculation of the subsidy amount

(133) One company availed of this scheme in the IP. However,
to the company was considered to be

the benefit
negligible being less than 0,1 %.

3.10. Texas

ethanol

and

biodiesel

blend

tax

exemption

It

(134) According to the Texan Code, motor fuels including
diesel fuel are subject to a state excise tax. The state
tax paid on diesel fuel is required by law to be added
to the selling price in each subsequent sale so that the tax
is ultimately paid by the person using or consuming the
fuel. Biodiesel
is treated as a separate product under
is not a taxable product. This
Texan state law.
implies that producers of biodiesel do not have to
collect any tax from the purchaser on behalf of and
remit to the State Taxing Authority. It was concluded
that biodiesel producers do not derive a benefit from
the Texas ethanol and biodiesel blend tax exemption
and that, to the extent that Texan law decides not to
tax a particular product would benefit anyone in the
state, such benefit accrues to the end consumer.
In
these circumstances, this scheme is considered not to
be countervailable.

3.11. Texas fuel ethanol and biodiesel production

incentive program

(a) Legal basis

(135) Chapter 16 of Texan Agriculture Code; Rules for Fuel
Ethanol and Biodiesel incentive Program; and Guidelines
for Fuel Ethanol and Biodiesel Incentive Program.

(129) The tax credit for blending of biodiesel

fuel

is based

upon N.D.C.C. §57-38-01.22.

(b) Eligibility

(b) Eligibility

(130) The taxpayer must be subject to North Dakota income
tax and retain a current license through the State Tax
Commissioner’s Office as a fuel supplier who blends
biodiesel fuel according to N.D.C.C. §57-43.2-05(1).

(136) The scheme provided grants

for eligible companies
producing ethanol and biodiesel. A producer seeking to
receive a grant was required to submit an application
establishing that:

1. the plant
biodiesel;

is capable of producing fuel ethanol or

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2. the producer has made a substantial investment in the

plant: and

(142) The amount of subsidy has then been allocated over the
total sales of biodiesel made by the company concerned
during the IP as the appropriate denominator.

3. the plant is a permanent fixture in Texas.

(c) Practical implementation

(137) The scheme established that producer that paid a fee of
USD 0,032 per gallon of biodiesel produced in a
registered plant was entitled to receive USD 0,20 for
each gallon of biodiesel produced in each registered
plant until the 10th anniversary of the date production
from the plant begins.

(138) A registered plant was required to submit monthly
production reports and a quarterly report certified by a
Certified Public Accountant. When the quarterly report
was submitted, the plant would also pay a fee of USD
0,032 per gallon. The amount of this paid fee would be
multiplied 5,25 times such that a USD 0,20 per gallon
incentive was then paid to the plant. The production
limit to receive the incentive was the first 18 million
gallons annually per plant.

(139) The scheme became effective in September 2003 but the
first payments under this scheme were not made until
June 2006 because no funds were appropriated until
fiscal year September 2005 to August 2006. The
scheme has not been operational
since 31 August
the Texan Legislature ceased funding the
2007, as
scheme as of
the 2008-09 appropriations biennium
(September 2007 to August 2009). In legal terms, the
scheme still exists in Texas. Moreover, it was established
that one of the companies concerned enjoyed benefits
under this scheme during the period of investigation.

(143) The company concerned obtained subsidies from this
scheme during the investigation period of 0,3 %.

3.12. Washington State biofuels production tax

exemption

(144) The state of Washington provides tax reductions from
the Business and Occupation tax (‘B&O tax’) and tax
exemption from the property tax and leasehold excise
tax.

(145) The state of Washington does not have a system of
corporate income tax. Rather, businesses are liable to a
Business and Occupation tax (‘B&O tax’) which is
tax
imposed on manufacturing activities. The normal
rate imposed on manufacturing activities is 0,484 %
unless otherwise specified in Washington state legislation.

(146)

the applicable rate is
In regard to the property tax,
determined by many overlapping jurisdictions
and
varies among local taxing jurisdictions within the State
of Washington. However,
the state-wide average is
approximately 1,2 % of fair market value.

(147) The leasehold excise tax is a tax imposed in lieu of
property tax when exempt property, such as public
port property, is used by a non-exempt entity, such as
a for profit business. The rate is 12,84 % of the contract
rental price.

(d) Conclusion

(a) Legal basis

(140) This scheme is considered to a subsidy in the sense of
Article 2(1)(a)(i) of the basic Regulation as the scheme
provides a financial contribution by the government of
the state of Texas in the form of direct grants. The grants
confer a benefit on the companies receiving them in
accordance with Article 2(2) of
the basic Regulation.
inter alia, to biodiesel producers
The scheme is limited,
considered to be
and is
specific under
therefore
Article 3(2)(a) of
the basic Regulation and therefore
countervailable.

(e) Calculation of the subsidy amount

(141) One company availed of

this scheme in the IP. The
the
subsidy amount was calculated on the basis of
amount of payments received during the investigation
period. Fees necessarily incurred to obtain the subsidy
were deducted from the payments received to arrive at
the
to
amount
Article 7(1)(a) of the basic Regulation.

as numerator,

pursuant

subsidy

(148) Under the Revised Code of Washington (RCW) Chapter
82.04.260(1)(e), the B&O tax rate for manufacturers of
pure biofuels,
reduced from
0,484 % to 0,138 %. This reduced rate is applicable
until 1 July 2009.

including biodiesel,

is

(149)

In regard to the property tax and leasehold excise tax
exemptions, RCW Chapter 84.36.635 and RCW Chapter
82.29A.135 provide that qualifying real and personal
from property tax and leasehold
property is exempt
excise tax.

(b) Eligibility

(150) All

three of

the above mentioned tax reductions/
exemptions apply to biofuel manufacturers. The reduc­
tions/exemptions
state-wide, with no
available
limitations other than the eligibility requirement.

are

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(151)

In regard to the eligibility for the B&O tax reduction, as
stated above, manufacturers of biodiesel are eligible.

(152)

In regard to the property tax and leasehold excise tax
exemptions, as stated above, qualifying real and personal
property is exempt
from property tax and leasehold
excise tax. Qualifying real and personal property must
be used primarily for manufacturing pure biofuels.
Qualifying property includes buildings, machinery and
equipment, other personal property and land associated
with the manufacture of biofuels, but not the land used
to grow crops. The buildings and equipment must be
new and cannot have existed before July of 2003.

(c) Practical implementation

(153) To avail of the reduced rate of B&O tax that is applicable
to biodiesel manufacturers, an eligible company simply
reports the value of sales of such products on the
relevant tax return.

(154) Application for the property tax and leasehold excise tax
exemptions must be made by 1st November of each year.
Application for property tax exemption is made through
the local county assessor. Application for leasehold excise
tax exemption is made through the Department of
Revenue.

(d) Conclusions

(155) This scheme is considered to be a subsidy in the sense of
Article 2(1)(a)(i) of the basic Regulation as the scheme
provides a financial contribution by the government of
the state of Washington as government revenue that is
otherwise due (B&O tax) is foregone or not collected. The
reduced tax liability of a company using this scheme
confers a benefit. The reduced B&O tax rate that
is
applicable to biofuels manufacturers is specific as it is
limited
including
biodiesel, and certain other specified activities and is
therefore considered to be countervailable.

to manufacturers

biofuels,

of

(156) None of the sampled companies availed of benefits under
the property tax exemption. In these circumstances, no
conclusions are drawn on this tax exemption. One
company availed of benefits under the leasehold excise
tax exemption but the amount of benefit was less than
0,1 % and hence considered to be negligible. In these
circumstances, no conclusions are drawn on this tax
exemption.

(e) Calculation of the subsidy amount

(157) One company availed of benefits under the reduced B&O
tax scheme during the IP. The subsidy amount was
calculated by applying the reduced rate of B&O tax to
the sales turnover of biodiesel produced by the company
in the IP. The amount of subsidy, when expressed as a
percentage of the total sales volume of biodiesel in the IP
was 0,7 %.

3.13. Amount of countervailable subsidies

(158) The amount of countervailable subsidies in accordance with the provisions of the basic Regulation,

expressed ad valorem, for the investigated companies ranges between 29,1 % and 41,1 %.

Small Agri-
biodiesel
Producer
Income tax
credit

Missouri
qualified
biodiesel
producer
incentive fund

Texas fuel
ethanol and
biodiesel
production
incentive
program

Washington
State biofuels
production tax
exemption

3,8

0,4

0,3

0,7

SCHEME

Biodiesel
Mixture Credit

COMPANY

Archer Daniels
Midland Company

Cargill Inc.

Green Earth Fuels of
Houston LLC

Imperium
Renewables Inc.

Peter Cremer North
America LP

Vinmar Overseas
Limited

World Energy
Alternatives LLC

31,3

34,1

38,7

28,4

41,0

41,1

37,6

(%)

Total

35,1

34,5

39,0

29,1

41,0

41,1

37,6

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(159)

In accordance with Article 15(3) of the basic Regulation, the subsidy margin for the cooperating
companies not included in the sample, calculated on the basis of the weighted average subsidy
margin established for the cooperating companies in the sample, is 36,0 %.

(160) With regard to all other exporters in the USA, the Commission first established the level of cooper­
ation. A comparison was made between the total export quantities indicated in the sampling replies
received from all cooperating exporting producers and the total imports from the USA as derived
from US export statistics. The percentage of cooperation found was 81 %. On this basis, the level of
cooperation was deemed to be high. It was therefore considered appropriate to set the subsidy level
for the non-cooperating exporting producers at the level of the highest subsidisation found for the
sampled cooperating exporting producers in order to ensure effectiveness of the measures.

4.1. Community production and standing

4. COMMUNITY INDUSTRY

(161) All available information, including information provided in the complaint and data collected from
Community producers before and after the initiation of the investigation was used in order to
establish total Community production and the support for the investigation.

(162) Based on this information it was found that overall Community production was around 5 400
thousand tonnes during the IP. Three companies belonging to the same group were found to be
related to exporting producers in the USA and the group was also itself importing significant
quantities of
these
companies were excluded from the notion of Community production within the meaning of
Article 9(1) and Article 10(8) of the basic Regulation. As a consequence, the production volume
on the basis of which standing was established was in the range of 4 200 to 4 600 thousand tonnes.

the product concerned from its related exporters in the USA. Therefore,

(163)

It was established that the companies that supported the complaint and agreed to co-operate in the
investigation represented more than 60 % of the Community production of biodiesel during the IP
indicated in recital (162). The company referred in recital (165) below which failed to co-operate
with the investigation was not considered as a supporter of the complaint. It is concluded that the
complaint and the investigation are supported by a major proportion of Community production
within the meaning of Article 9(1) and Article 10(8) of the basic Regulation.

4.2. Sampling

(164) Because of the large number of Community producers,

it was decided to resort to sampling to
establish the existence of material injury. Sampling forms were sent to all potential producers of
the like product in the Community. Initially more than 40 companies provided meaningful infor­
mation to the sampling forms and agreed to cooperate with the proceeding. The three companies
mentioned in recital (162) were not considered for the sampling exercise for the reasons mentioned
in that recital.

(165) From the remaining companies a sample of 11 companies was selected on the basis of the largest
representative volume of production and sales within the Community, as indicated in recital (11)
above. One producer originally considered for the sample had to be excluded as it failed to cooperate
with the investigation. The remaining ten sampled companies are considered to be representative for
the entire Community production.

(166) Reference hereafter to ‘Community industry’ or ‘sampled Community producers’ refers to these ten

sampled producers.

5. INJURY

(167) As mentioned in recital (17) above, the examination of the trends concerning the assessment of
injury covered the period from January 2004 to the end of the IP. However the investigation showed
that the Community industry was practically starting up in 2004. It was, thus, considered more
appropriate to make an analysis based on trends for the period 2005 to the IP (‘period analysed’). The
information collected regarding 2004 is nevertheless also presented in the assessment that follows.

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5.1. Community consumption

Table 1

Community
Consumption

2004

2005

2006

2007

IP

Tonnes

1 936 034

3 204 504

4 968 838

6 644 042

6 608 659

Index 2005=100

60

100

155

207

206

(168) Community consumption was established on the basis of volume of

the overall Community
production on the Community market of all Community producers, as ascertained in recital (162)
above, minus their exports plus imports from the country concerned by this investigation and
imports from other third countries.

(169) As to the volumes of imports from the USA, the following sources of information were available:

— the Eurostat data for the different CN codes under which the product was classified;

— the USA export statistics;

— other statistical

information of confidential nature on imports provided by interested parties.

(170) However, analysis of this information showed that the Eurostat data could not be used for the
purpose of assessing consumption since until the end of 2007 there was no distinct CN code
available for the customs classification of the various types of the product concerned. Imports of
the product concerned were classified under a number of codes which also contained import data of
other products. Hence,
it was considered more appropriate to use the US exports statistics for
establishing reliable imports and consumption figures and import trends. In using this source of
information, account was taken of the shipment time needed for the goods to arrive from the USA to
the Community and thus the export statistics were adjusted by one month in order to take account
of this time-lag.

(171) With regard to imports from other countries and exports of the Community producers, in view of
the limitation regarding the use of Eurostat data described above, the investigation relied on the data
reported in the complaint.

(172) Based on the above, it was found that Community consumption of biodiesel increased by 107 %
between 2005 and 2007 and then slightly decreased in the IP by one percentage point. Overall,
consumption more than doubled over the period analysed.

(173) The increase in demand was mainly due to the incentives taken by Member States to promote the use
of bio-fuels following the adoption of Directive 2003/30/EC of the European Parliament and of the
Council of 8 May 2003 on the promotion of the use of bio-fuels or other renewable fuels for
transport (16) and Council Directive 2003/96/EC of 27 October 2003 restructuring the Community
framework for the taxation of energy products and electricity (17).

(16) OJ L 123, 17.3.2003, p. 42.
(17) OJ L 283, 31.10.2003, p. 51.

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5.2. Volume of the imports from the country concerned and market share

Table 2

Imports from USA

2004

2005

2006

2007

IP

Tonnes

2 634

11 504

50 838

730 922

1 137 152

Index 2005=100

Market share

Index 2005=100

23

0,1 %

25

100

0,4 %

100

442

1,0 %

250

6 354

9 885

11,0 %

17,2 %

2 750

4 300

Source: USA export statistics.

(174)

Import volumes from the USA increased significantly from around 11 500 tonnes in 2005 to around
1 137 000 tonnes in the IP.

(175) During the period analysed, the subsidised imports from the USA continuously increased their share
of the Community market from 0,4 % in 2005 to 17,2 % in the IP. Therefore, there has been a
significant increase in subsidised imports both in absolute terms and in relative terms compared to
the Community consumption over that period.

(176) Splash and dash is a term used by biodiesel operators to describe a pattern by which biodiesel of
allegedly foreign origin is transhipped to the Community via the USA where it is mixed with basically
a drop (0,01 % of the final blend) of conventional diesel in order for the blender to avail himself of a
subsidy in the USA.

(177) US parties have claimed that splash and dash explains the surge of US imports into the Community
market, as it allegedly represented 40 % of US imports during the IP. These parties have also claimed
that because the investigation was initiated against imports of biodiesel originating in the USA, the
quantities concerned by the splash and dash should be separated from the injury analysis and treated
as imports from other third countries.

(178) On the other hand the complainant argued that imports of splash and dash, if any, would at most
represent 10 % of the US export volumes, and would thus be insignificant and not alter the findings
that
in
large quantities of subsidised imports from the USA entered the Community market,
particular during the IP.

(179) The investigation has shown that the US export statistics do not allow one to distinguish between
any biodiesel exported under the alleged splash and dash process and the other US exports recorded in
their ‘Exports’ chapter. In the same statistics there were hardly any quantities found to be declared
under the ‘Re-Exports’ chapter. The US authorities also stated that all quantities included in their
‘Exports’ chapter are products deemed to be originating in the USA.

(180) Moreover, most of the US companies investigated declared that it was not possible to differentiate the
quantities exported to the Community or sold on the domestic market between the quantities
produced or sourced in the USA and those exported under the splash and dash process.

(181) Also, it was found in the case of the investigated companies in the USA that all the exports of
biodiesel were declared, both upon exportation by the US exporters and upon importation by the
related importers in the Community, as US origin biodiesel.

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(182) On the basis of the above and taking into account, in particular, that splash and dash exports, if any,
were declared with a US origin and deemed as originating in the USA by the US authorities, it was
considered that there was no ground to treat them as non-US imports.

5.3. Prices of the subsidised imports and price undercutting

5.3.1. Unit selling price

Price in EUR/tonne

Index 2005=100

2004

463

81

Table 3

2005

575

100

2006

600

104

2007

596

104

IP

616

107

Source: US export statistics and questionnaire replies of the sampled US exporters.

(183) The US export statistics were also used to establish the price trends of the subsidised imports
in particular for 2007 and the IP. In order to reflect the price level at
originating in the USA,
Community border, the average export prices were adjusted with the relevant freight and insurance
costs. It should be noted that for earlier periods of the period analysed, namely 2005 and 2006, and
also for 2004, the US export statistics were not fully reliable in terms of sales values as the computed
average export prices were found to be disproportionally high compared to the prices reported by the
cooperating exporting producers. Under these circumstances the average US export price for these
years was based on the questionnaire responses provided by the sampled exporting producers in the
USA.

(184) Average prices for imports from the USA fluctuated during the period considered and overall showed

an increase of 7 % between 2005 and the IP.

5.3.2. Price undercutting

(185) For the purposes of analysing price undercutting, the weighted average sales prices of the sampled
Community producers charged to unrelated customers on the Community market, adjusted to an ex-
works level, were compared to the corresponding weighted average prices of the imports from the
USA, established on a cif basis for the sampled exporting producers in the USA. An adjustment for
the customs duties, post-importation costs and for the differences in feedstock (see next recital) used
for the production of biodiesel was applied where appropriate.

(186) The investigation identified different types of the product concerned in particular based on the
feedstock used in the production process. Whilst the main feedstock used in the Community is
rapeseed, the US producers use other feedstock such as soybeans, canola, palm, etc. Given that
feedstock is by far the main raw material for the production of the product concerned,
it was
considered that an adjustment for feedstock difference should be granted. This adjustment was
thus calculated to correspond to the market value of the difference between the relevant types of
the product concerned compared to the type of products produced from rapeseed. In this way both
the weighted average sales prices of the Community industry and the weighted average price of the
imports concerned were compared on the same feedstock basis, namely rapeseed.

(187) Based on the above methodology, the difference between the US and Community prices, expressed as
a percentage of the Community industry's weighted average ex-works price, i.e. the price undercutting
margin, was found to range from 18,9 % to 33,0 %.

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5.4. Economic situation of the Community industry

(188)

In accordance with Article 8(5) of the basic Regulation, the examination of the impact of subsidised
imports on the Community industry included an evaluation of all economic indicators established for
the Community industry over the period analysed.

5.4.1. Production capacity, production and capacity utilisation

Table 4

2004

2005

2006

2007

IP

Production capacity
(tonnes)

529 000

920 000

1 306 572

2 189 910

2 520 508

Index 2005=100

58

100

142

238

274

Production
(tonnes)

Index 2005=100

Capacity utilisation

Index 2005=100

475 710

813 657

1 214 054

1 832 649

2 016 573

58

90 %

102

100

88 %

100

149

93 %

106

225

84 %

95

248

80 %

91

Source: Questionnaire replies of the sampled Community producers.

(189)

In line with the increased consumption,
the sampled Community
producers continuously increased during the period analysed. It increased by 42 % between 2005
and 2006 followed by a further increase of 68 % in 2007 and a further increase of 15 % between
2007 and the IP. It marked an overall increase of 174 % over the period analysed. The increase in
production capacity resulted from new investments in anticipation of the growth in demand.

the production capacity of

(190)

Indeed the Community industry growth in production capacity has to be seen against the back­
ground of a Community bio-fuels and other renewable fuels consumption target of 5,75 %, set by
Directive 2003/30/EC, which is calculated on the basis of energy content of all petrol and diesel, for
transport purposes, placed on the Community market by 31 December 2010. Moreover, in March
2007, the European Council endorsed a 10 % binding minimum target to be achieved by all Member
States for the share of bio-fuels in the overall Community transport petrol and diesel consumption by
2020 (18). This target would increase the Community consumption of bio-fuels to around 33 million
tonnes of oil equivalent by that year. The production capacity in the whole Community in 2006 was
estimated at 6 million tonnes only. In view of the above,
it is understandable that Community
producers invested in additional capacities in anticipation of the growth in demand.

(191) Production of the like product by the Community industry increased also continually to reach an

overall increase of 148 % over the period analysed.

(192) As a result of the relative slower pace in the increase of production volumes vis-à-vis the increase of
production capacity, the capacity utilisation of the Community industry decreased by 9 % over the
period analysed.

(18) Following this endorsement, the Parliament and the Council have agreed, in December 2008, on a Directive for the
promotion of the use of energy from renewable sources containing a 10 % target for the use of renewable energy in
transport in 2020, which is expected to be met mainly by bio-fuels.

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5.4.2. Sales volume, market share and average unit prices in the Community

Table 5

2004

2005

2006

2007

IP

Sales volumes
(tonnes)

476 552

810 168

1 194 594

1 792 502

1 972 184

Index 2005=100

59

100

147

221

243

Market share

24,6 %

25,3 %

24,0 %

27,0 %

29,8 %

Index 2005=100

Average prices
(EUR/tonne)

Index 2005=100

97

655

86

100

759

100

95

900

119

107

892

118

118

933

123

Source: Questionnaire replies of the sampled Community producers.

(193)

In line with the evolution of consumption, the volume of sales made by the Community industry on
the Community market increased steadily, recording an overall increase of 143 % during the period
analysed. During the same period the Community industry increased also its market share by 4,5
percentage points.

(194) Average sales prices of the Community industry in the Community market increased by 23 % over
the period analysed. The increase in prices was justified in view of the increase of costs of raw
materials and other inputs.

5.4.3. Growth

(195) The growth of the Community industry is reflected in its volume indicators such as production, sales
but, in particular, in its market share. Despite a booming consumption in the Community market
during the period analysed the growth of the market share of the sampled Community producers was
relatively modest. In particular between 2006 and the IP, the sampled Community producers only
gained 5,8 percentage points of market share. During the same time, subsidised imports managed to
gain over 16 percentage points of market share. The fact that the Community industry could not
fully benefit from the market growth had an overall negative impact on its economic situation.
Several
injury factors such as production, utilisation of production capacity, productivity, sales,
investments policy, return on investments, were severely affected.

5.4.4. Stocks

Stocks
(tonnes)

Table 6

2004

2005

2006

2007

IP

11 195

14 663

34 123

55 410

58 566

Index 2005=100

76

100

233

378

399

Source: Questionnaire replies of the sampled Community producers.

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(196) Over the period analysed stocks of biodiesel increased by around 200 %. This growth in inventories
took place throughout the period analysed and followed in a more pronounced manner the growth
in production volumes of the Community industry over the same period. However, it is considered
that because biodiesel cannot be stored for a period of time exceeding 6 months (on average the
storage period is only around three months), data related to stocks have only limited value for
assessing the economic situation of the Community industry.

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

Table 7

Profitability

2004

9,3 %

2005

2006

18,3 %

18,0 %

Index 2005=100

51

100

98

2007

5,7 %

31

IP

5,7 %

31

Investments
in EUR 000

19 497

70 885

237 115

140 014

131 358

Index 2005=100

28

100

335

Return on investments

92 %

114 %

108 %

Index 2005=100

80

100

95

198

23 %

20

185

23 %

20

Cash flow in EUR 000

24 113

131 211

213 560

167 042

180 602

Index 2005=100

18

100

163

127

138

Source: Questionnaire replies of the sampled Community producers.

(197) Profitability of the sampled Community producers was established by expressing the net pre-tax
profit of the sales of the like product in the Community market as a percentage to the turnover
of these sales. Over the period analysed the profitability of the sampled Community producers
decreased from a profit of 18,3 % in 2005 to 5,7 % in the IP. This represents a drop of 12,6
percentage points over the period analysed.

(198) The level of investments in the production of biodiesel made by the sampled Community producers
increased by 235 % between 2005 and 2006. This increase was related to the expansion of
production capacity in anticipation of an increasing demand in the Community. In this regard it
is noted that in most cases investments are planned for at least two years before a biodiesel plant
becomes fully operational. The same producers continued to invest in 2007 and in the IP yet at a
much lower pace. This period coincides with the surge of subsidised imports in the Community
market.

(199) The sampled Community producers’ return on investment, which expresses their pre-tax result as a
percentage of the average opening and closing net book value of the assets employed in the
production of biodiesel
followed the negative trend in profitability. The actual decline was
however more dramatic as it decreased by 91 percentage points over the period analysed. It is
considered that the deterioration of the return on investments is a clear indication of the dete­
rioration of the economic situation of the Community industry.

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(200) The trend of the cash flow, which is the ability of the industry to self-finance the activities, has shown
an increase of 38 % over the period analysed. Despite the fall in profitability over the same period,
this indicator shows a positive trend mainly due to the increase in the depreciation costs which are
included for establishing the level of cash flow. Another reason was that the fall in profits in absolute
terms, over the period considered was not as pronounced as the fall in turnover. Between 2006 and
the IP, however, cash flow has shown a decrease of 15 % signifying a downturn in the latter part of
the period analysed when subsidised imports were more present in the Community market.

5.4.6. Employment, productivity and wages

Table 8

2005

182

2006

278

2007

462

100

153

254

2004

61

34

IP

506

278

7 798

4 470

4 367

3 967

3 985

Employment — Full
time equivalent (FTE)

Index 2005=100

Productivity
(tonnes/FTE)

Index 2005=100

174

100

98

89

89

Wages EUR/FTE

62 374

59 395

54 290

55 433

55 555

Index 2005=100

105

100

91

93

94

Source: Questionnaire replies of the sampled Community producers.

(201)

In line with the increase in production and sales volumes,
employment of the Community industry increased by
It
178 % in the period analysed.
the
is noted that
intensive industry not
industry is a capital
biodiesel
requiring a large labour force in the production process.

volumes and the prices of the subsidised imports, the
impact of the actual margin of subsidisation cannot be
considered to be negligible.

(202) Average wages decreased by 6 % over

the period
analysed. This is explained by the fact that the additional
workforce enrolled by the Community industry for
expanding production towards the end of
the period
analysed required less qualification.

(203) Productivity decreased by 11 % between 2005 and the IP.

5.4.8. Producers in the Community not included in the sample

(205) The analysis of data pertaining to the Community market
suggested that Community producers other than those
included in the sample and the ones mentioned in
lost considerable market share over the
recital
their own produced
period analysed on the sales of
biodiesel on the Community market. The
in
market share by these producers is estimated to be
above 20 percentage points over the period analysed.

(162)

loss

5.4.7. Magnitude of the actual margin of subsidisation and

recovery from past subsidisation

(204) The subsidisation margins for exporting producers in the
USA are specified above in the subsidisation section and
are significantly above de minimis. Furthermore, given the

(206) From the information provided by the complainant,

it
appeared that many of these companies either ceased
or reduced their biodiesel activity and were not able to
adequately cooperate with the investigation.

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in view of

(207) Moreover, a number of companies that submitted infor­
the sampling exercise
mation in the framework of
they had to downsize production and
indicated that
the cheap imports from the USA.
staff
comments were made by other producers
Similar
which were ready to start production but which had to
delay their entering into the market because of the surge
of low-priced imports from the USA, in particular during
the IP.

(208) The above data relating to producers not included in the
sample would reinforce the conclusions regarding injury
suffered by the sampled Community producers.

(209)

5.5. Conclusion on injury

sampled Community producers

In the context of a growing demand, the investigation
showed that the situation of the sampled Community
producers improved with regard to volume indicators
such as production (+150 %), production capacity
(+174 %) and sales volume (+143 %) over the period
analysed. The
also
increased their market share from 25,3 % in 2005 to
29,8 % during the IP, namely a modest increase of 4,5
percentage points. Employment and investments also
increased in view of
increasing demand for
the
biodiesel in the Community market during that period.
However, because the production volume did not follow
the market growth, the utilisation of production capacity
fell by 9 % and productivity decreased by 11 % over the
period analysed.

(210) The main indicators related to the financial situation of
the sampled Community producers worsened during the
period analysed. Profitability decreased from around 18 %
in 2005 and 2006 to below 6 % during the IP. Notwith­
in
standing their ability to self finance their activities,
particular because of
the
return on investments declined dramatically by 80 %
during the IP.

the increase in cash flow,

(211) The

the

that

investigation also showed

sampled
Community producers experienced a sharp increase in
their costs between 2005 and 2007 (+ 36 %) and
between 2005 and the IP (+ 42 %), because of increases
in the feedstock prices (mainly rapeseed and soy bean
oil), which represent close to 80 % of the full costs of
biodiesel. These cost increases could not be fully passed
on to customers on the Community market.

(212)

In the light of the foregoing it can be concluded that the
Community industry as a whole has suffered material
injury within the meaning of Article 8(5) of the basic
Regulation.

6. CAUSALITY

6.1. Introduction

(213)

In accordance with Article 8(6) and Article 8(7) of the
basic Regulation, it was examined whether the subsidised
imports originating in the USA have caused injury to the
Community industry to a degree that enables it to be
classified as material. Known factors other
than the
subsidised imports, which could at the same time be
injuring the Community industry, were also examined
to ensure that possible injury caused by these other
factors was not attributed to the subsidised imports.

6.2. Effect of the subsidised imports

(214) The investigation showed that

low-priced subsidised
imports from the USA significantly increased in terms
of volume, namely by 100 times, during the period
analysed. This resulted in a significant increase in their
market share by 16,8 percentage points, from 0,4 % in
2005 to 17,2 % in the IP. In order to demonstrate the
significance of the impact that the surge of the subsidised
it is
imports from the USA had on the Community,
noted that
share of 16,8
percentage points was achieved within a period of 15
months.

an increase

in market

(215) At

the same time, despite the significant

increase in
consumption,
in its core
the Community industry,
market, was only able to gain around 4,5 percentage
points of market share during the period analysed. The
investigation showed that
the
expense of other Community producers which ceased
to produce or which downsized production in the
period analysed.

this was exclusively at

(216) The average prices of the subsidised imports increased by
7 % between 2005 and the IP, but were significantly
the Community industry during
lower than those of
the subsidised
the same period. Hence,
imports
industry
significantly undercut Community
prices with an average undercutting margin of 25 %
during the IP.

the prices of

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(217) The pressure exercised by the surge of

low-priced
subsidised imports on the Community market did not
allow the Community industry to set its sales prices in
line with market conditions and the cost
increases.
in the IP the average prices of feedstock used
Indeed,
by the Community industry to produce biodiesel, were
25 % higher than in 2006. The Community industry was
only able to pass to its customers a price increase limited
to 4 % while its full costs increased by 20 % over the
same period. It is noteworthy that the price of the main
feedstock used by the US producers, namely soybean oil,
also increased markedly over the same period. However,
as shown in recital (211) above these increases in costs
were not reflected in the prices of the subsidised imports.

(218)

In order to further demonstrate the causal link between
the surge of low-priced subsidised imports from the USA
and the injury suffered by the Community industry, the
situation on the Community market in the period 2005
to 2006, when subsidised imports were not present, was
compared to the situation prevailing in the market
between 2006 to the IP, when the surge of low-priced
subsidised imports took place.

(219)

In the period from 2005 to 2006, when subsidised
imports were absent
from the Community market,
consumption increased by around 1,8 million tonnes.

the producers in the Community could prepare
All
their business plans with a perspective of a fast
In that period prices
growing and healthy market.
increased by 19 % and the Community
industry
achieved profits as high as 18,3 %. In 2007 and during
the IP, the situation changed dramatically. Low-priced
subsidised imports from the USA started to penetrate
the market. Although the market continued to expand
by 1,6 million tonnes, most of this market increase (over
1 million tonnes) was taken by the subsidised imports
from the USA. The Community industry only gained
modest market
to produce
biodiesel significantly increased by around 25 % but its
average sales price increased only by around 4 % in the
its overall economic and
same period. Accordingly,
financial situation deteriorated during the IP as profits
were significantly reduced to less than 6 % on turnover.

its main costs

share,

(220) Based on the above, it is provisionally concluded that the
low-priced subsidised imports from the USA, which
significantly undercut
the Community
industry during the IP and which also significantly
increased in volume, have had a determining role in
the material
the Community
suffered
industry, which is reflected in particular in the dete­
rioration of its financial situation during the IP.

the prices of

injury

by

6.3. Effect of other factors

6.3.1. Imports from other third countries

Table 9

Other third countries

2004

2005

2006

2007

IP

Total imports
(tonnes)

Index

Market share

Index 2005=100

0

0

0 %

0

Source: Information provided by the complainant.

30 000

55 000

144 596

147 812

100

183

482

493

0,9 %

1,1 %

2,2 %

2,2 %

100

122

244

244

(221)

Import volumes from third countries could not be accur-
ately assessed in the investigation for
the reasons
explained in recital (171) above. Thus, the data of the
table above is based on estimates provided by the
complainant.

(222) The imports from third countries not concerned by this
investigation increased from about 30 000 tonnes in
2005 to 147 812 tonnes during the IP. This resulted
in a moderate market share increase of 1,3 percentage
It was therefore provi­
points over the same period.
sionally
third
from other
countries cannot have made more than negligible contri­
bution to the injury suffered by the Community industry.

concluded that

imports

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6.3.2. Development of demand

(223)

In view of the significant growth in demand over the
period considered and the period analysed, the material
injury suffered by the Community industry during the IP
cannot be attributed to the negligible contraction in
demand (–0,5 %) observed on the Community market
between 2007 and the IP.

6.3.3. Public Policy Decisions

(228)

(224) One interested party alleged that the reintroduction of
energy taxes in Germany for biodiesel (19), would have
of
negatively
Community
particular
Member State.

influenced

producers

economic

supplying

situation

that

the

(225) The investigation revealed that indeed pure bio-fuels used
in Germany have benefitted from a tax incentive since
1999 which was reduced as of 1 August 2006. However,
on 1 January 2007 a mandatory blending requirement
was introduced (20) fixing the biodiesel quota to 4,4 %
calculated on the basis of energy content of all petrol
and diesel placed on the German market for transport
purposes. Operators that fail to fulfil this quota have to
pay a fine of EUR 0,60 per litre of biodiesel for which
this
they fall short of
mandatory blending
to have
compensated the alleged sales losses and to have counter­
balanced the reduction in incentives. Indeed, the investi­
gation has shown that the sales volumes of the sampled
Community producers supplying the German market
rose by 68 % between 2006 and the IP.

the quota. To a large extent

requirement

appears

the imports from the USA. As a result,

the
without
relative fixed costs had a negative effect on profitability
and also on the return on investment and cash flow of
Community producers.

that

the production capacity of

In this regard it is noted that the investigation focused on
the situation of the Community producers. Even if it is a
fact
the Community
industry increased (+ 189 %) relatively more than the
demand (+ 106 %), it is noteworthy that the main cost
drivers in the biodiesel production are the variable costs.
Indeed, as mentioned in recital (211) above, raw material
for the production of biodiesel represents 80 % of full
costs. The further examination of this claim showed that
the share of the fixed costs in the production and sales of
the overall costs.
biodiesel
Hence, any alleged impact of increased fixed costs, as a
result of unused capacity, cannot explain the significant
deterioration in the financial situation of the Community
industry during the IP.

represented only 6 % of

(229)

the capacity utilisation rate of

In addition, it is noteworthy that as mentioned in Table
4 above,
the sampled
Community producers was 80 % during the IP. Hence,
the alleged over capacity in the Community was not
the sampled Community
evidenced in the case of
producers.

(226) Based on the above, it is considered that decisions taken
by public authorities in the Community cannot break the
casual
link between the subsidised imports and the
material injury suffered by the Community industry.

(230) On the basis of the above,

it is considered that any
negative impact the idle production capacity may have
had on the Community industry was not such as to
link between the subsidised imports
break the causal
and the injury suffered by the Community industry.

6.3.4. Idle production capacity of Community producers

6.3.5. Increased demand for feedstock and increasing prices

to

the

production

(227) One interested party alleged that, spurred by public
of
promote
policy measures
biodiesel, many companies in the Community decided
to invest
in expanding existing production capacities
and in new plants. That party alleged that the production
capacity for biodiesel in the Community was as high as
11,5 million tonnes during the IP. It further alleged that,
since the development of consumption did not meet the
expectations, a significant part of production capacity
remained idle and would have remained idle even

(19) The ‘Energiesteuergesetz’ entered into force on 1 August 2006

imposing a tax of EUR 0,09 per litre B100.

(20) ‘Biokraftstoffquotengesetz’ BGBl. 2006,

I Nr. 62 of
21.12.2006, p. 3180, implementing Directive 2003/30/EC of the
European Parliament and the Council and Council Directive
2003/96/EC.

part

(231) One interested party claimed that the increased demand
for rapeseed and rapeseed oil led to high raw material
that Community
prices in the Community. The fact
producers
the main raw
as
material would explain why they may have suffered
more than other producers using other vegetable oils
such as soybean oil or palm oil to produce biodiesel.

rely on rapeseed oil

(232)

It is firstly noted that the investigation revealed that the
sampled Community producers were not relying solely
on rapeseed oil for their production of biodiesel but also
other vegetable oils (soybean, palm, sunflower) and occa­
sionally animal fat.

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(233) Moreover,

it

is indeed acknowledged in recital

(211)
above that the Community industry faced a significant
increase in its raw material
(feedstock) costs over the
period analysed. However, this development has to be
increase in prices of agricultural
seen against a general
products worldwide and it is noted in this respect that
the price increase for soybean oil
(the main feedstock
used by the producers in the country concerned) was
more pronounced over the same period. Accordingly,
all types of biodiesel were affected by feedstock price
increase.

(234)

it was

In a market governed by effective competition, it should
be expected that producers would be able to recover the
costs increases and pass it on to the market. However,
the pressure
the investigation showed that
exercised by the surge of low-priced subsidised imports
on the Community market which did not allow the
Community producers to set their sales prices in line
increases. As
with market conditions and the cost
mentioned also the main feedstock used by the US
producers, namely soybean oil, marked a pronounced
price increase in the period analysed. However,
these
increases in costs in the USA were not reflected in the
the subsidised imports in the Community
prices of
market.

(238) On the basis of the above, this argument had to be

rejected.

6.3.7. Importance of the location of the biodiesel plants in the

Community

(239) One interested party claimed that the location of any
biodiesel producer would be an important element in
terms of competitiveness and uses Germany as an
example to demonstrate that
landlocked locations of
biodiesel producers would have to bear high transpor­
in particular re-
tation costs since all big customers,
fineries and their blending facilities are located at the
coast.

for

locations. Moreover,

(240) The investigation showed that only a small number of
Community industry producers were located in land­
these
locked
producers it was found that refineries existed also in
landlocked locations
to these producers. For
others the investigation revealed that any disadvantage
for landlocked biodiesel producers in terms of being far
refineries) was
away from their customers (blenders,
compensated by being close to crushing mills and/or
feedstock providers.

certain of

close

(235) Against this background the raw material price increase
cannot break the casual
link between the subsidised
imports and the injury suffered by the Community
industry.

(241) On the basis of the above, the claim that the location of
plant in landlocked locations is causing material injury to
the Community industry was rejected.

6.3.6. Price development of mineral diesel

6.3.8. Producers related to the US exporters

(236) One interested party argued that because of a strong
correlation between mineral diesel prices and biodiesel
prices, the increase of the biodiesel prices, which was
sharper than the increase of the mineral diesel prices,
especially in Germany, would have caused a drop in
sales for the producers supplying the market of
this
Member State.

(242)

It should be noted that the impact of the imports from
the USA by the three companies referred to in recital
(162) has been taken into account in the analysis of
the effect of subsidised imports from the USA made in
recitals (214) to (220) above. As far as their sales of own
produced biodiesel are concerned, the investigation did
not point to a different pricing or behaviour than that of
the sampled Community producers, in particular during
the IP.

(237)

the investigation revealed that

any information to substantiate

the party in question did not
It is firstly noted that
its
claim.
provide
suggested by this
Moreover, contrary to what was
party,
the Community
industry had increased its sales and market share over
the period analysed. In addition, since crude oil prices are
quoted on a world-wide basis, sales of
the product
concerned should have been affected in the same
manner as
the sales of biodiesel produced in the
Community.

6.4. Conclusion on causation

(243) The above analysis has demonstrated that there was a
substantial increase in the volume and market share of
the low-priced subsidised imports originating in the USA
between 2005 and the IP. At the same time, it was found
that
these imports were significantly undercutting the
price of the Community industry during the IP.

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(244) The various findings of the investigation and the analysis
carried out, for the period 2005 and 2006 compared to
the period 2007 to the IP, showed that there was a clear
coincidence in time between the surge of the low-priced
imports from the USA and the significant deterioration
of the economic situation of the Community industry, in
particular during the IP.

noted that the Community industry's downwards trend
in profitability is the result of its difficulty in competing
with the subsidised,
imports originating in
low-priced,
the USA. The imposition of anti-subsidisation measures
would likely put the Community industry in the position
to maintain its profitability at levels considered necessary
for this capital intensive industry.

(245) Based on the above analysis, which has properly distin­
guished and separated the effects of all known factors on
the situation of
the Community industry from the
injurious effects of the subsidised imports, it was provi­
sionally concluded that the subsidised imports from the
injury to the Community
USA have caused material
industry within the meaning of Article 8(6) of
the
basic Regulation.

(249)

In conclusion, it was expected that measures would be
effective in giving the Community industry the oppor­
tunity to recover from the injurious subsidisation found
during the investigation.

7.3. Interest of unrelated importers/traders in the

Community

7. COMMUNITY INTEREST

7.1. Preliminary remark

(246)

In accordance with Article 31 of the basic Regulation, the
Commission examined whether, despite the conclusion
on injurious subsidisation, compelling reasons existed
for concluding that
in the Community
it was not
interest to adopt measures in this particular case. The
determination of the Community interest was based on
the various interests involved,
an appreciation of all
including
the
importers, the raw material suppliers and the users of
the product concerned.

the Community

those of

industry,

7.2. Interest of the Community industry

7.2.1. Effects of the imposition or non-imposition of measures

on the Community industry

(247) As mentioned above, the Community industry suffered
material injury caused by subsidised imports originating
in the USA. Not taking measures would most likely lead
to a continuation of the negative trend of the financial
situation of the Community industry. The situation of the
Community industry was particularly marked by a
decrease
in profitability of 12,6 percentage points
between 2005 and the IP due to insufficient price
increases.
in view of the downwards trend in
profitability, it is most likely that the financial situation
of the Community industry will deteriorate further in the
absence of any measures. This would ultimately lead to
cuts in production and more closures of production sites,
which would
and
investments in the Community.

threaten employment

therefore

Indeed,

(248)

It is considered that the imposition of measures would
It should be
restore fair competition on the market.

(250) Around

25

unrelated

the
Community were contacted upon initiation. However
no cooperation was received from these parties.

importers/traders

in

(251)

In these circumstances, it was provisionally not possible
to precisely assess the possible impact of the measures on
importers.

7.4. Interest of users

(252) All known user companies involved in mineral diesel
production and distribution, and also involved in the
mandatory blending of mineral diesel with biodiesel
were contacted and questionnaires were sent to them
upon initiation.

(253) Cooperation was obtained from only one user company.
This user submitted a questionnaire response by which it
stated that it is in favour of putting an end to the flows
of cheap USA imports, because they create distortions of
competition in the Community which causes injury to
the companies in charge of manufacture and sale of
diesel, since certain competitors that do not
refrain
from buying this cheap priced product have an unfair
competition advantage when compared to those that
refrain from doing so.
It also claimed that measures
would allow the restarting of ester production factories
(in particular in Germany) and/or will allow projects of
creating new esterification factories in the Community to
continue. As the European ester is made traditionally of
rapeseed (raw material of better quality than the palm or
soya used for the production of B99), the augmentation
in the number of producers in Europe would therefore
mean more products of better quality that would result
in a drop in the prices of the ester, for the consumer's
final benefit.

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(254) One user's association,

It

alleged that diesel

its members.
for 20 to 25 % of

representing the interests of
Shippers in one Member State claimed that the impo­
sition of measures would have an adverse effect on the
is
activity of
the
responsible
transport sector and that given the low profitability of
the sector (0-5 %), the price of diesel is determinant for
the survival of thousands of companies. These allegations
could not, however, be verified as no replies to the users
questionnaire were received from individual members of
the association in question.

costs of

the

(255)

it was provisionally concluded
In these circumstances,
that, on the basis of
the
the information provided,
effect of countervailing measures would appear to be
mixed and thus no clear conclusion can be made
regarding the existence of compelling reasons,
in the
interest of users, not to adopt measures in this particular
case.

7.5. Interest of suppliers of raw materials

imposition of

(256) Six suppliers replied to the questionnaire. Four supported
by
anti-subsidisation measures
if anti-subsidisation measures are not
the
risk. Should this
there would be a clear negative impact on

the
submitting that,
to be
Community industry would be at
happen,
their situation.

long-term presence of

imposed,

the

(257) Two others that were related to exporting producers of
biodiesel in the USA, submitted that possible measures
would not be of significant impact as they would result
to a shift
from
in trade flows
countries not covered by the measures).

(switch to imports

(258) On the basis of the above, it could be concluded that the
imposition of measures would overall have a positive
effect on the situation of raw material suppliers.

7.6. Competition and trade distorting effects

(259) One interested party alleged an incoherence of

the
present proceeding with international and Community
policy decisions to promote bio-fuels production and
sales related to environmental protection and decrease
in the dependency from mineral fuels.

(260)

In this regard it has to be noted that Article 31 of the
basic Regulation requires that special consideration shall
be given to the need to eliminate trade distorting effects
of injurious subsidisation and to restore effective compe­
tition. Against this background, general considerations on
environmental protection and supply of mineral diesel

cannot be taken into account in the analysis and at the
same time cannot justify unfair trade practices.

that

ceased

concerned,

given their

(261) With respect to the Community market, following the
the USA
imposition of anti-subsidisation measures,
strong
exporting producers
their
market positions, would likely continue to sell
products, albeit at non-subsidised prices. It is also likely
that there would still be a sufficient number of major
competitors on the Community market, namely the
Community
temporarily
producers
that have not been able to
production and others
launch their production activities due to the subsidised
imports. It should be noted in this respect that, at the
beginning of the period analysed, sales from Community
producers not represented in this investigation accounted
for at least 30 % of the Community market and this
share decreased dramatically due to the
subsidised
import from the USA. Therefore,
it is likely that users
will continue to have the choice of different suppliers of
biodiesel. If, however, no measures were to be imposed,
the future of the Community industry would be at stake.
Its disappearance would severely reduce competition on
the Community market.

7.7. Conclusion on Community interest

(262) The imposition of measures on imports of biodiesel orig­
inating in the USA would clearly be in the interests of
the Community industry. It would allow the Community
industry to grow and to recover from the injury caused
by the subsidised imports. If, however, no measures were
to be imposed, it is likely that the economic situation of
the Community industry would continue to deteriorate
and more operators would go out of business.
Furthermore, while no clear conclusions could be made
with regard to users and importers, the imposition of
measures was also expected to be in the interests of
raw material suppliers.

(263)

In view of the above, it was provisionally concluded that
there were no compelling reasons of Community interest
against the imposition of countervailing duties in the
present case.

8. PROPOSAL FOR PROVISIONAL ANTI-SUBSIDY

MEASURES

8.1. Injury elimination level

(264)

In view of the conclusions reached with regard to subsi­
disation, injury, causation and Community interest, pro­
visional anti-subsidisation measures should be imposed
in order to prevent further injury being caused to the
Community industry by the subsidised imports.

L 67/80

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12.3.2009

(265) The level of any countervailing measures should be
sufficient
to eliminate the injury to the Community
industry caused by the subsidised imports, without
exceeding the subsidy margins found. When calculating
the amount of duty necessary to remove the effects of
subsidisation it was
injurious
any
measures
should allow the Community industry to
obtain a profit before tax that could be reasonably
achieved under normal conditions of competition,
i.e.
in the absence of subsidised imports.

considered that

(266) For this purpose a profit margin of 15 % on turnover
could be regarded as an appropriate level which the
Community industry could have expected to obtain in
the absence of
injurious subsidisation based on the
performance of the Community industry over the first
part of the period considered (2004, 2005 and 2006)
the
and
productive investment on a long-term basis for this
newly established industry.

guaranteeing

considered

reasonable

for

(267) The necessary price increase was then determined on the
basis of a comparison of the weighted average import
price, as established for the price undercutting calcu­
lations, with the non-injurious price of the like product
sold by the Community industry on the Community
market. The non-injurious price has been obtained by
adjusting the sales prices of the sampled Community
producers by the actual profit/loss made during the IP
and by adding the above mentioned profit margin. Any
then
difference resulting from this comparison was
expressed as a percentage of the total cif import value.

(268) The company granted individual examination referred to
in recital (9) above failed to provide meaningful
infor­
mation regarding its export sales to the Community and
the resales of its related importer in the Community. The
company was requested to provide certain information to
correct the shortcomings in the information submitted
by the company in its questionnaire response. The
the
Commission also informed the company that,
requested information was not provided,
in accordance
the basic Regulation the deficient
with Article 28 of
information provided in its questionnaire response may
be disregarded as it was causing undue difficulties in
arriving at accurate findings for this company.

if

(269) The company was informed about the consequences of
its partial co-operation and given an opportunity to
comment. However, no response was received within
the time limits set for this purpose.

(270) Consequently,

this
the
company was provisionally set at
the
highest injury margin found for the sampled companies.

for
the level of

injury elimination level

8.2. Provisional measures

(271)

it is considered that,

In the light of the foregoing,
in
accordance with Article 12(1) of the basic Regulation,
provisional countervailing measures should be imposed
at the level of the subsidy margin found, but should not
be higher than the injury margin calculated in accordance
with the lesser duty rule.

(272) On the basis of the above, countervailing duty rates have been established by comparing the injury
elimination margins and the subsidy margins. Consequently, the proposed countervailing duties are as
follows:

Company

Injury margin

Subsidy margin

Countervailing duty rate

Archer Daniels Midland Company

54,6 %

Cargill Inc.

58,9 %

Green Earth Fuels of Houston LLC

39,8 %

Imperium Renewables Inc.

41,6 %

Peter Cremer North America LP

69,9 %

Vinmar Overseas Limited

World Energy Alternatives LLC

Co-operating non
sampled companies

69,9 %

41,7 %

51,4 %

35,1 %

34,5 %

39,0 %

29,1 %

41,0 %

41,1 %

37,6 %

36,0 %

35,1 %

34,5 %

39,0 %

29,1 %

41,0 %

41,1 %

37,6 %

36,0 %

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Official Journal of the European Union

L 67/81

(273)

In view of the fact that that the countervailing duty will apply to blends containing by weight more
than 20 % of biodiesel, in proportion to their biodiesel content, it is considered appropriate for the
effective implementation of the measures by the customs authorities of the Member States to
determine the duties as fixed amounts on the basis of the biodiesel content.

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

9. DISCLOSURE

(275) The above provisional findings will be disclosed to all interested parties which will be invited to make
their views known in writing and request a hearing. Their comments will be analysed and taken into
consideration where warranted before any definitive determinations are made. The provisional
findings may have to be reconsidered for the purposes of any definitive findings.

HAS ADOPTED THIS REGULATION:

Article 1

1.
A provisional countervailing duty is hereby imposed on imports of fatty-acid mono-alkyl esters and/or
paraffinic gas oil obtained from synthesis and/or hydro-treatment, of non-fossil origin, commonly known as
‘biodiesel’, in pure form or in a blend containing by weight more than 20 % of fatty-acid mono-alkyl esters
and/or paraffinic gas oil obtained from synthesis and/or hydro-treatment, of non-fossil origin, falling within
CN codes ex 1516 20 98 (TARIC code 1516 20 98 20), ex 1518 00 91 (TARIC code 1518 00 91 20),
ex 1518 00 99 (TARIC code 1518 00 99 20), ex 2710 19 41 (TARIC code 2710 19 41 20), 3824 90 91,
ex 3824 90 97 (TARIC code 3824 90 97 87), and originating in the United States of America.

The rate of the provisional countervailing duty applicable to the products described in paragraph 1

2.
and manufactured by the companies listed below, shall be as follows:

Company

Countervailing duty rate
EUR per tonne net

TARIC additional code

Archer Daniels Midland Company, Decatur

Cargill Inc., Wayzata

Green Earth Fuels of Houston LLC, Houston

Imperium Renewables Inc., Seattle

Peter Cremer North America LP, Cincinnati

Vinmar Overseas Limited, Houston

World Energy Alternatives LLC, Boston

Companies listed in the Annex

All other companies

237,0

213,8

213,4

216,8

211,2

211,2

211,2

219,4

237,0

A933

A934

A935

A936

A937

A938

A939

see Annex

A999

L 67/82

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Official Journal of the European Union

12.3.2009

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

The release for free circulation in the Community of the product referred to in paragraph 1 shall be

3.
subject to the provision of a security, equivalent to the amount of the provisional duty.

4.

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

Article 2

interested parties may request
1. Without prejudice to Article 30 of Regulation (EC) No 2026/97,
disclosure of the essential facts and considerations on the basis of which this Regulation was adopted,
make their views known in writing and apply to be heard orally by the Commission within 16 days of the
date of entry into force of this Regulation.

Pursuant to Article 31(4) of Regulation (EC) No 2026/97, the parties concerned may comment on the

2.
application of this Regulation within one month of the date of its entry into force.

Article 1 of this Regulation shall apply for a period of four months.

Article 3

This Regulation shall enter into force on the day following 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, 11 March 2009.

For the Commission

Catherine ASHTON
Member of the Commission

12.3.2009

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Official Journal of the European Union

L 67/83

ANNEX

US co-operating exporting producers not sampled

Company Name

City

TARIC additional code

AC & S Inc.

Alabama Clean Fuels Coalition Inc.

Amereco

BioPur Inc.

Central Iowa Energy LLC

Chesapeake Custom Chemical Corp.

Delta BioFuels Inc.

East Fork Biodiesel LLC

Ecogy Biofuels LLC

ED&F Man Biofuels Inc.

Freedom Biofuels Inc.

Freedom Fuels LLC

Fuel Bio

FUMPA Bio Fuels

Galveston Bay Biodiesel LP (BioSelect Fuels)

GeoGreen Fuels LLC

Griffin Industries Inc.

Huish Detergents Inc.

Incobrasa Industries Ltd.

Independence Renewable Energy Corp.

Innovation Fuels Inc.

Integrity Biofuels

Iowa Renewable Energy LLC

Johann Haltermann Ltd.

Lake Erie Biofuels LLC

Louis Dreyfus Agricultural Industries LLC

Middletown Biofuels LLC

Musket Corporation

Natural Biodiesel Plant LLC

Nova Biofuels Clinton County LLC

Organic Fuels Ltd.

Nitro

Birmingham

Phoenix

Bethlehem

Newton

Ridgeway

Natchez

Algona

Tulsa

New Orleans

Madison

Mason City

Elizabeth

Redwood Falls

Houston

Houston

Cold Spring

Salt Lake City

Gilman

Perdue Hill

Newark

Morristown

Washington

Houston

Erie

Wilton

Blairsville

Oklahoma City

Hayti

Clinton

Houston

A941

A940

A941

A941

A940

A940

A940

A940

A940

A940

A940

A941

A940

A940

A940

A940

A940

A940

A940

A940

A940

A941

A940

A940

A940

A940

A940

A940

A941

A940

A940

L 67/84

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Official Journal of the European Union

12.3.2009

Company Name

City

TARIC additional code

Owensboro Grain Company LLC

Owensboro

Pacific Biodiesel Inc.

Peach State Labs Inc.

Philadelphia Fry-O-Diesel Inc.

Piedmont Biofuels Industrial LLC

Prairie Pride

RBF Port Neches LLC

REG Ralston LLC

Riksch BioFuels LLC

Sanimax Energy Inc.

Southeast BioDiesel LLC

Soy Solutions

SoyMor Biodiesel LLC

Stepan Company

Trafigura AG

U.S. Biofuels Inc.

United Oil Company

Vitol Inc.

Western Dubque Biodiesel LLC

Western Iowa Energy LLC

Western Petroleum Company

Yokaya Biofuels Inc.

Kahului

Rome

Philadelphia

Pittsboro

Deerfield

Houston

Ralston

Crawfordsville

DeForest

Charlotte

Milford

Albert Lea

Northfield

Stamford

Rome

Pittsburgh

Houston

Farley

Wall Lake

Eden Prairie

Ukiah

A940

A941

A940

A940

A941

A941

A940

A940

A940

A940

A941

A940

A940

A941

A940

A940

A940

A940

A940

A940

A940

A941