BIODIESEL IMPORTS : ANTI-DUMPING DUTIES WILL NOT STOP FRAUD

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Farm Europe welcome the imposition of anti-dumping duties to biodiesel imports from China, recently decided by the European Commission following a complaint by the EBB. Biodiesel imports from China have more than doubled since 2020 to reach close to 2 million tonnes, severely undercutting European prices and harming European producers. We encourage the Commission not to exclude any type of biodiesel from the application of the final duties in order not to create loopholes in the application of the measure.

These anti-dumping duties, albeit welcome, will however not curb fraudulent imports. What is at stake here is the fraudulent labelling of biodiesel as an advanced sustainable biofuel derived from raw materials listed in Annex IX of the Renewable Energy Directive, which benefit from double counting towards the targets established in the Regulation. Those raw materials include UCO (Utilized cooking oils), and some derivatives from palm-oil production like palm-oil mill effluent. But very likely the real raw material used is palm-oil coming from any origin including recently deforested areas. 

The economic benefit to fraudsters is high. Unfortunately, there are no easy chemical tests that could be used by customs to expose the fraud, so it strives unchecked. In the end the EU is not importing sustainable biodiesel, on the contrary it is giving a boost to unsustainable practices including deforestation.

The negative consequences for our domestic industries have been harsh. Plants have shut down, new investments scrapped. 

We therefore urge the Commission to thoroughly address the problem of irregular imports of biodiesel by seriously tackling the missing link: fraud.

The Commission should strengthen the certification of advanced sustainable biofuels by enacting an obligatory ex-ante accreditation of the factories willing to export to the EU. Those factories should be physically inspected, rather than just accepting paper certificates as today. Refusal to accept physical inspections should disqualify those products from being certified. The same practice should apply in case of suspicious practices after the certification took place. The factories or blending terminal need to be physically inspected and the involved companies need to disclose all relevant documents to the inspector. As long as the investigation lasts or in case of a refusal to access the sites or documents, the certificate and related PoS (Proof of Sustainability documents) need to be suspended, at the minimum the eligibility for double counting must be suspended.

The Commission should also suspend the benefit of double counting for the most fraud exposed raw materials to remove the economic incentive; and tide-up the customs codes applicable to improve controls. Voluntary schemes should be suspended vis-à-vis China as long as fraud cannot be excluded and the effective equivalence of control with EU cannot be certified. In addition, the setting up of the working group agreed with Transport ministers on the 30th May to take concrete actions to fight fraud should be launched without further delays. As a matter of principle, all imports should be subject to controls at least equivalent to those imposed on EU similar feedstocks and related products. 

The problem with Chinese imports of biodiesel has two sides: one has been taken care of, the other side begs urgent action. Failure to do so would compromise the outcome.