Australian Customs initiates investigation into alleged dumping and subsidisation of Biodiesel exported from the United States of America
Today (22 June 2009), the Australian Customs and Border Protection Service ("Customs") has published a notice confirming that it had resolved to initiate an investigation into alleged dumping of biodiesel exported from the USA. The initiation application was lodged by Biodiesel Producers Limited ("BPL"), an Australian manufacturer of biodiesel.
The Subject Goods
The initiation application describes the subject goods
("Goods") as:
"Fuel manufactured by chemically altering non-fossil
origin feedstocks (including recycled materials from these sources)
through a process of transesterification and/or esterification to
form mono-alkyl esters (commonly known as 'biodiesel')
whether in pure form (B100) or in a blend with a biodiesel
percentage in excess of 20% (B20)."
The Goods have been identified as falling within the following subheadings 2710.11.80, 2710.19.80, 2710.91.80, 2710.99.80, 32824.90.20 and 3824.90.30 in Schedule 3 of the Customs Tariff Act 1995 and all currently attract a general customs duty rate of $0.38143 per litre.
Alleged Dumping
BPL claims that the Goods are being exported to Australia from the USA at dumped prices. BPL relied on information reported by the Australian Bureau of Statistics for shipments exceeding 1ML to estimate export prices of biodiesel from the USA. The information shows four shipments from the USA in January 2009, April 2009, May 2009 and February 2010. In its application, BPL provides estimated dumping margins as a percentage of the FOB export price for the four shipments. Customs has modified BPL's calculations and estimates that the dumping margins are as follows:
| Month | Dumping Margin |
| January 2009 | 38% |
| April 2009 | 18% |
| May 2009 | 19% |
| February 2010 | 26% |
Alleged Subsidisation
BPL also claims that countervailable subsidies have been received in respect of biodiesel exported to Australia through an excise tax/income tax credit scheme. The application notes that the scheme expired on 31 December 2009 but legislation to extend the scheme to 31 December 2010 and to reinstate the scheme retrospectively to 31 December 2009 is likely to be passed in the US Congress. BPL has estimated that the amount of subsidy provided under the scheme would be approximately $0.30 per litre of 40 per cent of the estimated export price.
Alleged Injury to the Australian Industry
BPL alleges that the Goods exported from the USA to Australia at prices below their normal values have caused material injury to the Australian industry through:
- lost market sales volume;
- lost market share;
- price undercutting;
- reduced profits and profitability;
- reduced return on investment;
- reduced capital utilisation;
- lower employee numbers and;
- reduced hours worked.
Invitation for Interested Parties to Provide Submissions
The notice released by Customs invites interested parties to provide submissions concerning the application before close of business on 2 August 2010.
As many of you will be aware, we have extensive experience in acting in anti-dumping and countervailing measures whether for Australian industry in the initiation of measures or acting for overseas exporters and Australian importers of goods the subject of such anti-dumping or countervailing action. As always, we will be pleased to assist parties in relation to this important investigation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
