Trade War Over Biofuel Subsidies

Oh the irony, the poor starve, yet the rich squabble over subsidies. European biodiesel producers have triggered a fresh transatlantic trade war by urging the EU to impose punitive duties on cheap imports from the US.

They claim that low-priced imports of biofuels are putting many European producers out of business. Their American rivals immediately hit back by urging the federal government to take action against any protective measures for the European industry.

The European Biodiesel Board (EBB) wants duties on “B99” biodiesel exports (biodiesel with 1% petroleum diesel), claiming they are unfairly subsidised and then dumped in the EU, where they can win new subsidies.

US biodiesel exports are subsidised by up to $300 a tonne. Some trading firms have also been shipping biofuels to the US, where they add a “splash” of mineral diesel to qualify for the subsidy and then send the fuel back to the EU. These exports have risen dramatically since last year, causing what the EBB calls “severe injury” to European producers.

A spokesman for Peter Mandelson, the EU trade commissioner, said: “We’ve had extensive contacts with the EBB over several months. We’re glad that they have finally submitted their request and will examine it thoroughly … We will not tolerate unfair trade.”

But Manning Feraci, vice-president of federal affairs at the National Biodiesel Board in the US, said: “It is hypocritical for the EBB to cry foul while they benefit from a blatant trade barrier.”