EU: No duties on U.S. ethanol now, but door still open

By Holly Jessen | August 28, 2012

Although provisional countervailing duties still haven’t been adopted, the European Commission has decided to proceed with registration of U.S. ethanol imports, according to information published Aug. 24 in the Official Journal of the European Union.

“This decision represents an important step forward for the European ethanol industry and acknowledges the significant damage caused to European ethanol producers by massive quantities of subsidized ethanol imported from the USA,” said Rob Vierhout, Secretary General of ePURE, the European Producers Union of Renewable Ethanol.

Anti-subsidy and anti-dumping investigations were initiated at the request of ePURE in November 2011, claiming that because U.S. ethanol was subsidized it had caused injury to the European biofuels industry, thanks to a surge of imports of U.S. ethanol in a short period of time. The main concern was that U.S. ethanol was benefiting from the U.S. Volumetric Ethanol Excise Tax Credit, or the 45-cent a gallon blenders credit, and then entering the EU. VEETC expired at the end of 2011.

During the investigation, evidence was provided that the volume and prices of U.S. ethanol imported to the EU resulted in “substantial adverse effects on the overall performance and the financial situation of the [EU ethanol] industry,” the journal said. In the end, the commission did find that material injury was caused from October 2010 to September 2011 but decided not to adopt provisional countervailing duties. However, the commission felt there was evidence that the U.S. could reinstate the blenders credit. “Imports of [U.S. ethanol] shall be made subject to registration so that, eventually, measures may retroactively be applied against those imports from the date of such registration,” the journal said. “Should the United States reintroduce the main subsidy scheme with retroactive effect, the commission intends to propose the council to collect definitive duties.”

Neither the anti-subsidy or the anti-dumping investigation has yet concluded, Vierhout told EPM. On the anti-subsidy side, interested parties can submit comments and hearings will be held between now and Dec. 25. The anti-dumping investigation is ongoing and is set to wrap up in February 2013.

The Renewable Fuels Association previously said repeatedly that it had been shown or found no evidence that ethanol that was exported to the EU was first benefiting from VEETC. In addition, VEETC expired at the end of 2011 and when it was in effect it went to gasoline blenders, marketers and other end users, not ethanol producers.