EU imposes import duties on biodiesel from Argentina and Indonesia

The European Union will impose punitive duties on imports of biodiesel from both Argentina and Indonesia for the next five years, after ruling that producers there were selling at unfairly low prices detrimental to European manufacturers.

According to the European Commission, the EU's executive body, the duties would be set at an average of 24.6% for biodiesel from Argentina and 18.9% from Indonesia and will come into effect at the end of November.

Argentina is the world's biggest biodiesel exporter, and the two countries represent 90% of EU biodiesel imports. Their share of the EU market rose to 22% in 2011 from 9% in 2009.

The Commission says producers from both countries benefited from artificially low raw material prices because of high export taxes imposed on soya beans and soybean oil by Argentina and on palm oil by Indonesia.

Agribusinesses Bunge Ltd and Louis Dreyfus Commodities are just two of the companies set to be affected, facing duties of €217 ($290) and €239 ($320) per tonne, respectively.

Argentina is allegedly preparing to take the European Union to the World Trade Organisation to challenge the punitive duties. The country has already launched a WTO challenge against EU rules for importing biodiesel, and the EU went to the Geneva-based trade body last December to claim that Argentine import restrictions are illegal.

Indonesia's biodiesel companies were also likely to appeal against the EU imposing permanent duties.