EU to Probe U.S. Biodiesel Tariffs - by Matthew Dalton

The European Commission said Thursday it would investigate whether U.S. biodiesel is being shipped through third countries to avoid tariffs placed last year on direct shipments from the U.S. to the European Union.

The commission, the EU's executive arm, also said it would examine whether U.S. producers are shipping their product in blends that contain less than 20% pure biodiesel to avoid the tariffs, which only apply to blends containing more than 20%.

The investigation was requested by the European Biodiesel Board, the EU industry's main lobby group, in its long-running effort to fight a subsidy the U.S. government gives to its producers. The EU industry says the subsidy—a $1 tax credit for each gallon of biodiesel blended with petroleum-based diesel—has caused the U.S. industry to flood the European market with exports, depressing prices and threatening the viability of European producers. The tariffs were put in place to counter the advantage of the subsidies.

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