EU imposes anti-dumping duties targeting cheap Chinese biodiesel imports

The EU has pushed ahead with plans to impose antidumping duties of up to 36.4% on Chinese biodiesel imports, it said Aug. 16, after finding that European producers had struggled to breakeven in 2024 due to an influx of supply.

Effective from Aug. 16, provisional measures will impose a 36.4% duty on biodiesel and hydrotreated vegetable oil from Chinese producers, while 40 companies that cooperated with the investigation will benefit from a lower 23.7% duty. Two other Chinese producers -- EcoCeres Group and Zhuoyue Group -- were also granted discounted duties of 12.8% and 25.4%, respectively, the EC said in a statement.

The provisional duties are expected to be replaced with definitive measures Feb. 2025, while sustainable aviation fuel was exempted from existing tariffs.

Citing data from the European Biodiesel Board, the EC reported that import volumes of biodiesel and HVO to the EU from China almost doubled from around 495,000 metric tons in 2022 to 973,000 t in 2022, before jumping close to 1.5 million in the investigation period starting December 2023.

The surge in imports was unmatched by moderate consumption growth within the EU over the same period, the European Commission said, showing that total consumption within the union grew from around 17.6 million t to 18.1 between 2021 and 2022. Consequently, China's market share increased from 5.4% in 2022 to 8% during the 2024 investigation period, while the EU's domestic industry ceded some 10% of its market share.

The erosion in market share was driven by discounts of around 5%-14% for Chinese biodiesel, the EC found, putting pressure on European margins to the extent that producers were struggling to cover operating costs.

While Europe's largest player Neste incurred its steepest profit losses in over a decade and other large producers have scaled back investments, Chinese producers have been kept afloat by generous tax rebates, cheaper wages and other factors, the EC found.

The EC dismissed criticisms that the tariffs would hamper the EU's progress in meeting its renewable energy goals for the transport segment for 2030, claiming that producers within the Union have sufficient capacity to service future demand.

European investment challenge

New measures mark the latest attempt by the EU to protect its domestic biofuels industry as a challenged market environment has caused several prominent producers to scale back on ambitious projects in the sector. In July, Chevron, Shell and BP all halted plans for standalone bio-refining units in Europe.

Industry group European Waste-Based & Advanced Biofuels Association praised the new measures as a remedy to "extremely adverse" market conditions since late 2022, yet warned that exemptions for specific producers and SAF could continue to hamper European producers.

"[The new measures are] a missed opportunity to close the SAF loophole and increase extremely low individual duties for certain producers," EWABA Secretary-General Angel Alvarez Alberdi said Aug. 16. "We hope these will be addressed by the time the Commission imposes definitive early next year."

While European stakeholders hope that the measures will add much-needed stimulus and investment certainty to producers within the Union, Chinese suppliers have been forced to consider alternative outlets. In July, traders noted that export activity had already dovetailed, pointing to a vacuum left by European buyers that had previously accounted to up to 90% of offtake for many suppliers.

Transport and Environment, a lobby group, also applauded the proposed duties when they were first proposed in June, but called for stronger certification measures for Chinese biofuel feedstocks, such as used cooking oil, which remain crucial to the operations of many European biodiesel producers and have made the green credentials of supply chains notoriously difficult to verify.

"Restrictions on imports from China are a step in the right direction, however, anti-dumping tariffs alone won't be enough to tackle UCO fraud. Without a complete overhaul of the certification process, the EU will continue to play out a game of whack-a-mole as fraudsters from other countries will simply fill the gap," said Cian Delaney, biofuels campaigner at T&E.

Platts, part of S&P Global Commodity Insights, assessed the renewable diesel that complies with the EU's Renewable Energy Directive at a $1,535/mt Aug. 16, down 1.32% on the day and 3.2% from when provisional anti-dumping measures were first announced.