Europe probes biodiesel 'dumping'

http://news.bbc.co.uk/go/rss/-/1/hi/business/7453564.stm

Version 0 of 1.

The European Commission has launched an investigation into claims that the US is "dumping" subsidised biodiesel onto the European market.

The US government supports the production of biofuels from corn and soya, saying it provides an alternative to expensive, foreign crude oil.

It sells the surplus abroad, including to Europe.

But European manufacturers have complained that the artificially cheap imports are damaging their industry.

Promoting biofuels

We have always said that the European Union will not tolerate unfair trade practices EU spokesman

The complaint from the European Biodiesel Board, which sparked the investigation, suggested that the dumping had had an adverse effect on prices and the market share of European producers.

"We have always said that the European Union will not tolerate unfair trade practices and will pursue vigorously any well-founded complaint," said EU trade spokesperson Peter Power.

"The Americans [exported] more than a million tonnes of biofuel to Europe last year, all of it heavily subsidised," said Doug Ward, from Scottish biofuel maker Ardent Energy.

"But because it leaves the country, it does nothing to help them reduce their carbon emissions," he added.

Imports of biodiesel from the US have increased substantially in the last few years. 7,000 tonnes were imported in 2005, whereas an estimated one million tonnes were imported in 2007, according to the EU.

If the European Commission, which will carry out the investigation, finds that the US has broken trade rules, it could respond by imposing duties on the imports.

But according to the BBC's Europe business reporter Duncan Bartlett, the commission is pressing countries throughout Europe to use more renewable energy, such as biofuels.

So if it does take action against the United States, its critics may accuse it of driving up the cost of the very kind of fuel it wants the Europeans to use, he says.

The commission intends to publish its initial findings by next March.