Dáil Éireann Debate, Tuesday - 26 February 2019
267. Deputy Brendan Howlin asked the Minister for Business, Enterprise and Innovation if the European Commission is controlling the importation of biofuels specifically biodiesel from Argentina; if Irish and other EU manufacturers of biofuels are at a competitive disadvantage due to EU levies on domestic biodiesel; and if she will make a statement on the matter. [9131/19]
View answerInternational Trade Policy is a competence of the European Commission under the EU Treaties and defined as the Common Commercial Policy. Under this architecture the Commission makes legislative proposals concerning trade defence and engages with Member States through various Committees, including the Trade Defence Instruments Committee where Member States vote to support or oppose the measures proposed by the Commission.
Following a complaint by the European Biodiesel Board on behalf of EU producers, the European Commission launched an anti-subsidy investigation into imports of Argentine biodiesel on 31 January 2018. The Commission issued its final subsidy determination on 3 December 2018, finding that the Government of Argentina provided certain subsidies to its biodiesel industry and that such measures posed a threat of injury to the EU biodiesel industry. To regulate the importation of subsidized Argentine biodiesel into the EU and level the playing field for EU biodiesel manufacturers, the Commission recommended the imposition of definitive ad valorem anti-subsidy duties on imports of Argentine biodiesel of between 25% and 33.4%. In response, Argentine exporters offered a voluntary price undertaking proposal consisting of a Minimum Import Price (MIP) applicable to all Argentine biodiesel imports to the EU below a specified annual threshold; imports above that threshold would be subject to the EU’s anti-subsidy duties.
At a meeting of the Trade Defence Instruments Committee, chaired by the Commission and representative of all Member States, on 30 January 2019, Member States voted to accept the Commission’s proposal to introduce anti-subsidy measures on imports of Argentine biodiesel. Member States also voted to accept the voluntary price undertaking proposed by the Argentine exporters. The measures entered into force on 13 February 2019 (Commission Implementing Regulation (EU) 2019/244 of 11 February 2019 imposing a definitive countervailing duty on imports of biodiesel originating in Argentina).
The Minimum Import Price will be calculated on the basis of the international price of soybean oil, to which a fixed amount will be added. The Commission will monitor the situation on a quarterly basis, adjusting the MIP as necessary and ensuring that the undertaking given is not violated. Any breach of the undertaking will result in its withdrawal and the full application of the anti-subsidy duties.
The annual threshold for tariff-free imports of biodiesel from Argentina has been set at a volume roughly corresponding to its overall market performance and at around 10% of the average annual EU consumption of biodiesel between 2014 and 2017. While this is an annual allocation, Argentina has undertaken not to issue more than 37% of export certificates in any quarter in an effort so as not to create an imbalance in trade flows. Imports will be monitored by the European Commission in conjunction with Member States’ Customs authorities. Once this threshold has been exceeded, imports of Argentine biodiesel will be subject to the anti-subsidy duties laid out in the aforementioned Commission Implementing Regulation (EU) 2019/244.
Insofar as ‘EU levies on domestic biofuels’ are concerned, I assume the Deputy is referring to a sustainability premium, and my Department remains in dialogue with the European Commission and colleague Member States on the interplay of this premium with this dossier.
The Commission considers that the combination of the MIP with the proposed annual level plus the ad valorem duty applicable to imports of biodiesel exceeding the annual level will offset any injurious effects to the EU biodiesel industry resulting from the subsidisation of Argentine exports.
As my Department has had ongoing engagement with Irish producers of biodiesel and the European Biodiesel Board, in relation to this case, as well as to the earlier related anti-dumping investigation (now terminated), we are fully seized of their interests in these matters.
On balance, I am satisfied that industry’s concerns have been addressed by the price undertaking and anti-subsidy duties which entered into force on 13 February. I am further satisfied that these measures do not put EU manufacturers at a competitive disadvantage and that they are WTO-compliant. However, my Department will continue to monitor the situation closely and to make known to the European Commission any issues encountered by Irish producers as a result of these measures.
