The US has effectively blocked its market to cheap imports and now European Union authorities are scrambling to find ways to stem a flood of biodiesel imports after Argentina and Indonesia mounted successful challenges to anti-dumping duties.

Last week the US Commerce Department piled on more import duties on biodiesel from both Argentina and Indonesia, adding anti-dumping duties ranging from 60.44pc to 276.65pc to already steep anti-subsidy duties on the fuels.

Its helped a dramatic reversal of the flow of fuel, with the EU now buying oil that used to go to America and the US market, in effect blocking Argentine and Indonesian sales.

In January the European Commission begun a new investigation into whether biodiesel exporters benefit from unfair subsidies, following a complaint in December by the European Biodiesel Board (EBB).

Biodiesel can be manufactured from vegetable oils, animal fats, and even recycled restaurant grease and can be used in unmodified diesel vehicles.

In the US, the final determination regarding fuel from Argentina and Indonesia is subject to a second ruling by the US International Trade Commission on April 6 on whether US biodiesel producers were injured by dumped imports from the two countries. But the independent panel has already found in the subsidy cases that the imports caused such injuries.

The latest duties make it virtually certain that biodiesel from Argentina and Indonesia will not be sold in the US market, with combined rates of up to 159pc on the Argentine fuel and up to 341pc on Indonesian variety.

In France, oilseed processor Saipol has said it plans to cut its biodiesel production by around half this year, blaming renewed imports of Argentine biodiesel for exacerbating poor market conditions.

The EU’s new investigation would offer another channel for imposing tariffs on imported biodiesel as Argentina, and Indonesia, both major producers, have mounted successful challenges to anti-dumping duties, which the European Union set for five years in 2013.

Argentina and Indonesia have called the trade measures protectionist.

Previously, the General Court of the European Union, the second-highest EU court, delivered a series of rulings in September 2016 to annul duties. The EU initially appealed the ruling, but decided last week to withdraw that appeal.

The European Commission cut the anti-dumping duties for Argentinian biodiesel last year to between 4.5pc and 8.1pc from initial rates of 22pc to 25.7pc. The rates for Indonesia remain those set in 2013 – between 8.8pc and 20.5pc.

The EU’s case was based on export duties both countries impose on the raw material, soybeans in the case of Argentina and palm oil for Indonesia. The EU view was that this gave an unfair advantage to biodiesel producers there, allowing them to “dump” product at unfairly low prices.

In the US, the Commerce Department set final dumping duties for Argentine biodiesel at 60.44pc to 86.41pc, and for Indonesian biodiesel anywhere from 92.52pc to 276.65pc.

It’s a decision Commerce Secretary Wilbur Ross said allows US producers relief from the “market-distorting effects of foreign producers dumping” into the market there.

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