Argentina's biodiesel industry warns it would be destroyed by EU's proposed duty hikes on Argentinian biodiesel, with producers fearing they will not be able to resume exports to Europe before 2016

Allison Oesterle

BUENOS AIRES , October 19, 2013 (AFP World News (English)) – Argentina's biodiesel industry warned Friday it faces collapse if Europe makes good on a threat to impose stiff duties on their product next month.

The European Commission earlier this month moved to raise duties on Argentine and Indonesian biofuels in response to alleged dumping.

The increases would be on top of temporary duties the Commission imposed on Argentina in May.

"The European Commission confirmed its decision to close the biodiesel market for Argentina, putting the whole Argentine soya chain in check," the Argentine Biofuel Chamber said in a statement.

Argentina is the world's top producer of biodiesel, which is made from soybeans, producing 2.5 million tons in 2012, of which 1.6 million tons are exported.

The trade dispute first flared in April 2012, when Spain cut back its biodiesel imports after President Cristina Kirchner nationalized the Argentine holdings of Spain's Repsol oil company.

The Argentine biofuels chamber said the EC met with Argentine industry representatives and foreign ministry officials on Wednesday in Brussels.

The EC has scheduled a vote Tuesday on a proposal to impose duties of between 22 and 25 percent on Argentine biodiesel, to go into effect November 28.

"The application of this measure would cause the collapse of the Argentine biodiesel industry," the chamber said.

The group denied that Argentine producers were dumping product below cost, and accused the EC of protectionism.

The European policy "will have economic and social repercussions in Argentina and will negatively impact the price of diesel in Europe," it warned.

Argentina has threatened to file a complaint with the World Trade Organization but producers fear they won't be able to export to Europe again before 2016.

The eight percent duties in place since May have already led to a 75 percent drop in Argentine exports to Europe compared to levels during same period last year, according to the chamber.

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(c) 2013 Agence France-Presse

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