UK launches investigations into HVO biodiesel imports from the US

The UK Trade Remedies Authority has launched an antidumping and countervailing investigation into imports of hydrotreated vegetable oil biodiesel from the US in response to concerns from UK biodiesel and renewable diesel producers about market changes since a 2022 review.

The investigations aim to determine if HVO imports from the US are sold at unfairly low prices or are subsidized, potentially harming the UK industry.

HVO biodiesel, also known as renewable or green diesel, is produced through the synthesis or hydrotreatment of non-fossil oils and fats. It can be used in pure form or blended with other fuels and is sourced from the US. Fatty-acid mono-alkyl esters of non-fossil origin, in pure form or included in a blend, are also considered.

HVO has gained attention in the UK as a low-carbon biofuel replacement for fossil diesel, particularly for decarbonizing heating and transport.

The investigation period is from Jan. 1-Dec. 31, 2024, during which the TRA will evaluate market dynamics, including the narrowing price gap between imported HVO and UK-produced biodiesel.

US renewable diesel exports to the UK ended 2024 with 83 million gallons.

The decision to investigate likely stems from tension that while US HVO imports support the UK's decarbonization goals, they threaten local producers' margins. Substantial industry feedback in 2024 noted a "step-up" in US volumes, putting pressure on UK production.

According to market sources, UK producers face higher production costs due to reliance on domestic or European feedstocks (such as used cooking oil), which are scarcer and more expensive than the waste lipids and virgin oils available to US refiners. Industry voices, such as the UK Petroleum Industry Association, have noted that US HVO's price point is sometimes 20-30 pence per liter below UK equivalents, which threatens the viability of the domestic industry.

Some US HVO may derive from virgin oils, such as soybean or palm oil, linked to deforestation and land-use change, rather than waste-based sources. This contrasts with the UK's stricter Renewable Transport Fuel Obligation standards, which prioritize waste-derived biofuels, pushing fears that long-term dependency on US imports could stifle investment in domestic HVO capacity.

The Renewable Transport Fuel Obligation is a key UK government policy aimed at reducing greenhouse gas emissions from transportation fuels. Under the RTFO, fossil fuel suppliers for road transport must provide a specified volume of eligible low-carbon fuel as a percentage of the total fuels they supply. By 2030, fossil fuel companies must ensure that 19.474% of all fuel supplied meets the criteria for approved low-carbon fuel.

US-origin HVO faced trade restriction for the first time in 2009 by the EU, with current duties in place until August 2026.

While the UK removed transposed EU anti-dumping and countervailing duties on imports of HVO from the US and Canada in 2022.

The TRA has also examined biodiesel imports from Argentina. By November 2024, it proposed keeping duties on Argentine biodiesel at a range of 25%- 33.4% until February 2029.

Moreover, In 2024, the TRA launched an investigation into biodiesel imports from China, prompted by a survey in September 2024 to gather evidence from businesses and consumers. This followed the Trade Secretary's acceptance of a TRA recommendation on Oct. 17, to register these imports for potential duties.

If dumping is confirmed, the TRA could impose provisional duties or register imports for retroactive measures. As of now, no final ruling has been widely reported, but given the timeline, market sources say an outcome such as duties ranging up to 36.4% (mirroring EU provisional rates) or a decision to close the case might be expected anytime soon.

The EU has been more proactive and advanced in its response to Chinese biofuel imports. The European Commission launched an antidumping investigation into Chinese biodiesel Dec. 20, 2023, following a complaint from the European Biodiesel Board.

The probe, covering Oct. 1, 2022, to Sept. 30, 2023, examined whether Chinese biodiesel was dumped, harming EU producers. Provisional antidumping duties ranging from 23.7% to 36.4% were imposed Aug. 16, 2024, targeting biodiesel in pure form or blends (excluding sustainable aviation fuel).

The EC finalized these measures Feb. 10, setting definitive duties between 10% and 35.6%, superseding the provisional rates.

Platts, part of S&P Global Commodity Insights, assessed the Los Angeles renewable diesel (99%) price at 255 cents/gal March 17, up 3.36 cents from March 14.