Vierhout addresses outcome of anti-dumping, anti-subsidy cases

By Holly Jessen | March 01, 2013

Rob Vierhout, secretary general of ePURE, the European Renewable Ethanol Association, spoke to Ethanol Producer Magazine about the recent European Union decision to impose an $83.03 per metric ton tariff on imported U.S. ethanol. Although a three-year duty period was considered, it was ultimately decided to stick with the five-year time period as provided in the EU regulation. At the end of five years the duty will expire, unless there’s a reason for extending it, he said.

Q: The anti-dumping and anti-subsidy investigations were launched more than a year ago. Is the outcome what you expected?

A: Partly it is. After the European Commission had finished the subsidy investigation and concluded that real damage was done to the EU industry we had hoped that a countervailing duty would be proposed. Unfortunately for purely legal reasons the Commission shied away from applying this trade defense instrument. We feel that the anti-dumping duty is doing justice for the injury we suffered for a number of years.

Q: Are you satisfied with the outcome, given that the anti-subsidy investigation was concluded with no tariff?

A: The anti-subsidy investigation … was conducted to the very end but then the European Commission concluded that no duties should be applied. Not all the EU Member States supported that view, by the way.

Q: Are you satisfied with the $83.03 per metric ton figure? Might it have been higher or lower?

A; Yes, we are happy with the duty but it could have been much higher if one looks at the injury that was brought upon the EU producers. We had to close down some plants and reduce output in others. In view of the injury found we think that the duty applied is really the minimum imaginable.

Q: What are you hearing from the members of your organization, the EU producers, about this decision?

A: Everyone is very happy. No one told me that we should forfeit it.

Q: How will this decision impact the EU ethanol industry?

A: Still too early to tell but we expect prices to increase, and this is really needed. We have seen very low prices in the last two years. Hopefully plants can now start producing full capacity.

Q: What is ePURE’s plan to grow the EU ethanol industry moving forward?

A: Our main concern right now is the risk that the European market will be halved. The recent European Commission proposal to cap 1G biofuels [conventional biofuels made from food crops, including sugarcane ethanol] to 5 percent. If adopted it would have major implications for the European ethanol industry. The impact will be far worse than the imports we have had from the U.S.A. We have already enough production capacity in place to cover 6 percent of the expected 2020 demand. So, if we have to cut down to 5 percent and adding to that the imports the situation would be dramatic. We have therefore called upon the EU decision makers to take up in the law a specific target for renewable energy in gasoline which should be 8 percent to be filled with conventional ethanol reserving at least an additional 2 percent for cellulosic ethanol.

Q: Ethanol exports from the U.S. to the EU jumped from 102 million liters in 2009 to 1.17 billion liters in 2011. Do you have numbers for 2012?

A: The final number of exports to the EU are not yet known but the first eleven months showed a total U.S. exports to the EU of close to 600 million liters. Clearly much less than the previous year but still substantial if you realize that the EU biggest plant has a name plate capacity of 480 million liters. That plant is standing idle now.

Q: How much do you expect imports to drop in the next year? How will that impact the EU ethanol industry?

A: That is really a crystal ball question and difficult to answer. I think that much will depend on who the E15 market in the U.S.A. will develop. We truly hope that this market will develop well. Not just because we would like to avoid imports but more importantly because it will show EU regulators that driving on E15 can be done. It will also depend on how other traditional export markets like Brazil and Canada will develop and whether there is arbitrage with Europe or not. But obviously: less imports mean better prices in the EU market.