The European Union to Implement Provisional Tariffs on Chinese Biofuels Amid Anti-Dumping Investigation

The European Union Provisional Tariffs on Chinese Biofuels

The European Union (EU) will impose provisional tariffs on biofuels imported from China after an investigation revealed that Chinese companies sold the commodity at unfairly low prices in European markets. The European Commission, the EU’s executive body, has proposed duties ranging from 12.8% to 36.4% to counteract the effects of what it deems as dumping practices by Chinese exporters.

Impact on Domestic Producers

The tariffs are expected to take effect in August. However, the EU’s anti-dumping probe will continue until February 2025, potentially leading to more definitive measures. The decision comes in response to a significant drop in biofuel prices within Europe. Data from Argus Media reveals that the benchmark price for used cooking oil-based biodiesel averaged $1,300 per metric ton for the first seven months of this year, marking a nearly 40% decrease compared to the same period in 2022.

Surge in Chinese Exports

Chinese biofuels have increasingly flooded the European Union market, with imports rising dramatically in 2023. European imports of Chinese biofuels reached approximately 1 million metric tons, up from around 550,000 metric tons the previous year, according to Global Trade Tracker. This influx has contributed to the sharp decline in biofuel prices. As a result, oil companies have been forced to reconsider their investment strategies in the sector.


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Industry Reactions

The downturn in the biofuel market has led to a slowdown in new projects by major oil companies in Europe. Last month, BP announced a halt to the development of two new biofuel projects. In July, Shell suspended construction at a Dutch biofuels plant. The company cited the need to ensure “future competitiveness given current market conditions.”

Previous Investigations and Current Developments

The EU launched its investigation last year following a complaint from the European Biodiesel Board (EBB), which accused China of “highly damaging unfair trading practices.” Earlier this year, a separate probe into the circumvention of duties on Indonesian biodiesel through China was discontinued. This decision came after the EBB withdrew its complaint.

Market Uncertainty

Up until May, biofuel imports from China were roughly 434,000 metric tons, consistent with last year’s figures. However, both domestic and international biofuel trade have recently slowed due to uncertainty surrounding the EU’s proposed tariffs. Sophie Barthel, head of European biofuel pricing at Argus, noted that there is significant uncertainty about the outcome of the investigation. This uncertainty is preventing most market participants from taking on larger positions.

Broader Trade Disputes

The European Union move is part of a broader pattern of trade tensions between Brussels and Beijing. This year, China has initiated anti-dumping investigations into EU pork and brandy imports. In July, the EU announced plans to impose further tariffs on electric vehicles produced in China. This move reflects the ongoing trade disputes between the two economic giants.


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