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Biodiesel Industry Makes Strong Case Before International Trade Commission on Harm Suffered Due to Biodiesel Imports

Nov 09, 2017
NBB and Member Companies Testified with Concrete Examples of Harm Suffered Because of Imports

NEWS
FOR IMMEDIATE RELEASE

 Contact: Rosemarie Calabro Tully
202-641-6209
rcalabrotully@biodiesel.org

WASHINGTON, D.C. – Today, the National Biodiesel Board (NBB) Fair Trade Coalition testified before the International Trade Commission (ITC) on the harm that the industry has suffered because of unfairly subsidized and dumped imports of biodiesel from Argentina and Indonesia. A mix of large and small producers testified on the volume and price effects of these imports, and the related impacts to the industry.

“While U.S. energy policy sought to create a level playing field for domestic and imported biodiesel, foreign government subsidies have made it nearly impossible for U.S. producers to compete,” said Donnell Rehagen, chief executive officer of the National Biodiesel Board. The biodiesel industry supports roughly 64,000 jobs nationwide.

This flood of imports is killing jobs, as we learned from White Mountain Biodiesel’s Wayne Presby: “White Mountain is located in an area with a high rate of unemployment. Every job matters in our community. When we were operating, we employed 24 people, paying full benefits. We are now down to four people. Twenty families in our corner of the world are now struggling because White Mountain shut down its plant.”

In the absence of a remedy, U.S. producers cannot charge prices that allow them to earn a return on their biodiesel sales. NBB’s Rehagen testified: “Without a remedy, there will be nothing to stop these foreign producers from destroying America’s biodiesel industry.

The NBB Fair Trade Coalition filed petitions with the Commerce Department and the ITC in March to address a flood of subsidized and dumped imports from Argentina and Indonesia that has resulted in market share losses and depressed prices for domestic producers. Biodiesel imports from Argentina and Indonesia surged by 464 percent from 2014 to 2016, taking 18.3 percentage points of market share from U.S. manufacturers. Imports of biodiesel from Argentina again jumped 144.5 percent following the filing of the petitions. These surging, low-priced imports prevented producers from earning adequate returns on their substantial investments and caused U.S. producers to pull back on further investments to serve a growing market.

Elias Petersen of Kolmar Americas, Inc., a company that purchases large volumes of biodiesel from domestic producers, testified that: “many [domestic producers] report that they have available supply and unutilized capacity. These producers see little purpose in producing additional volumes to sell at the low prices permeating the market due to subsidized imports. Kolmar’s own experience purchasing low-priced biodiesel from Argentina supports this view.”

Petersen went on to testify that only poor economics thanks to imports were to blame for reduced outputs from domestic producers: “Since our entry into the biodiesel market a decade ago, Kolmar has purchased and sold domestically produced biodiesel throughout the country. There are no significant impediments, logistical or otherwise in delivering fuel to all corners of the country. There is only one reason biodiesel sales are challenged—economics. Domestic producers are forced to operate at uneconomical prices based on unfairly subsidized, low import prices.

White Mountain Biodiesel’s Presby confirmed this firsthand: “The importers are arguing about challenging logistics and high transportation costs for domestic product. These arguments make no sense in our case. White Mountain produces biodiesel from used cooking oil, and there is more of that in New England than anywhere in the country. We can truck our fuel to New York in a 4-hour drive, and deliver the fuel to large terminals just like imports do. The reason distributors prefer getting biodiesel from Argentina and Indonesia rather than four hours up the Interstate is because it’s cheaper.”
 
“Our capacity utilization in 2016 was in the 75 percent range. We had the ability to supply over 30 million gallons more, and the only reason we failed to sell more biodiesel was because we could not compete against subsidized import prices from Argentina and Indonesia. Imports from Argentina and Indonesia continued to undercut us on price, and we could not increase prices to a level that will restore us to profitability,” said Paul Soanes, president and chief executive officer at RBF Port Neches LLC.

RBF’s Jonathan Phillips added: “We have the largest plant in the Western Hemisphere, and at full capacity, we’d be the most efficient. But in an environment of growing demand, we are not prospering. We’re fighting every day just to survive in this commodity market where the lowest price wins. If the imports were not subsidized, we’d be able to charge a fair price and succeed.”

“REG is a low-cost producer. We have an efficient, centralized shared services organization covering all of our plants, we are a leader in using a broad array of lower-cost feedstocks, and we have made investments to enhance the efficiency of our production process. From 2014 to 2016, we constantly had to choose between selling at low prices to meet the cheap import prices or losing sales volumes. We are looking for fair pricing so that we can generate adequate returns on our investments, reinvest in our business and play an important role in this growing market,” said Chad Stone, chief financial officer at Renewable Energy Group, Inc. (REG).

But all hope is not lost. “Since preliminary duties were imposed the market has begun to recover, and customers have come back to us, willing to pay us fair prices. In a healthy market, we can reopen and move forward with our expansion plans,” Presby testified.

NBB’s Rehagen agreed: “I know that a remedy will create a level playing field and put our industry back on solid footing.”

The National Biodiesel Board is one of the members of the NBB Fair Trade Coalition. Last week, the coalition won a preliminary antidumping determination from the Commerce Department; the department found that biodiesel imports from Argentina and Indonesia are sold into the United States below fair value. Just today, the Commerce Department affirmed its early decision that these countries unfairly subsidize biodiesel. As a result of these decisions, importers of Argentinian and Indonesian biodiesel will be required to pay two sets of cash deposits on biodiesel imported from those countries. A final determination by the ITC on the countervailing duty case is expected in December.  

Made from an increasingly diverse mix of resources such as recycled cooking oil, soybean oil and animal fats, biodiesel is a renewable, clean-burning diesel replacement that can be used in existing diesel engines without modification. It is the nation’s first domestically produced, commercially available advanced biofuel. The National Biodiesel Board is the U.S. trade association representing the biodiesel and renewable diesel industries, including producers, feedstock suppliers and fuel distributors.

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For more information on biodiesel, visit www.biodiesel.org