The European Commission has launched an anti-dumping investigation into Chinese biodiesel imports, a move applauded by European biofuel producers.
This comes after the EU executive announced a probe in December following reports of artificially low prices, a practice known as dumping.
These allegations were put forth by the European Biodiesel Board (EBB), warning of a possible industry collapse due to the cut-rate prices.
Xavier Noyon, EBB secretary general, told Euractiv he was confident that the EU would protect the biodiesel industry from this "existential crisis".
If dumping is established, trade duties may be imposed on Chinese imports to balance prices.
Chinese officials, in response, have critiqued the investigation as protectionist.
Surge in Chinese biodiesel
The EU biodiesel market, which is valued at about €31 billion annually, is viewed by many as a green alternative to fossil fuels.
In recent years, Chinese biodiesel imports have spiked, with the early months of 2023 noting an 80% increase from the same period in 2022.
EBB alleges a dumping margin of about 110%, even without any competitive edge over EU industry.
There are also concerns over mislabelled Chinese exports exploiting EU legislation.
Allegedly, ineligible crop-based biofuels are being fraudulently passed off as advanced biofuels by Chinese companies.
The potential misrepresentation of imports is contributing to the plight of the EU industries, says Xavier Noyon.
However, the EU's investigation will primarily focus on the trade issues arising from dumping, not fraud.
Noyon stressed that the request for the investigation wasn't a stopgap measure against fraud, but rather to handle the dumping issue head-on.
He cited concerns about price hikes in biodiesel leading to costlier decarbonisation if tariffs were placed on Chinese imports.
However, Noyon argued that eliminating unfair Chinese competition would simply amplify rivalry among other biofuel producers, adding that the EU industry is "capable of meeting 100% of EU demand."
This is the second EU probe into Chinese biofuels.
A separate investigation is underway concerning allegations of Indonesian biodiesel being shipped through China and the UK to bypass taxes.
This concern was raised by the EBB in a formal complaint to DG TRADE.
If companies are found guilty of these deceptive practices, they may lose their EU trading certification.
