Europe Threatens Legal Action Against US Biodiesel Industry

European biodiesel producers have threatened to take legal action over US subsidies which they claim will allow American biodiesel imports to climb nearly tenfold this year.

Non-profit organisation for the European biodiesel industry, The European Biodiesel Board (EBB) says "the massive exports of unfair subsidised US biodiesel is becoming an increasing source of concern for the EU biodiesel industry."

The EBB claims that US biodiesel can be subsidised by up to $264 per cubic meter (approximately €200 per tonne) by only adding a "drop" of mineral diesel to the natural fuel to qualify it as a biodiesel.

US producers can therefore claim the maximum subsidy for a "B99" blend. This blend is then eligible for further subsidies when it reaches Europe for export.

The EBB estimates about 700,000t of US methyl ester (used to make biodiesel) has entered the EU since January this year compared with only 90,000 for the whole of 2006, representing a sharp increase in exports.

The EBB is urging the European Commission to take the necessary actions to counter and eliminate "unfair" B99 subsidised exports.

Biodiesel made from vegetable oil is mixed with petroleum-derived diesel to create a less polluting fuel.

By Ozge Ibrahim