COMMISSION IMPLEMENTING REGULATION (EU) 2019/244
of 11 February 2019
imposing a definitive countervailing duty on imports of biodiesel originating in Argentina
1.
PROCEDURE
1.1.
Initiation
1.2.
Registration of imports
1.3.
Investigation period and period considered
1.4.
Interested parties
1.5.
Sampling
1.5.1.
Sampling of Union producers
1.5.2.
Sampling of importers
1.5.3.
Sampling of exporting producers in Argentina
1.5.4.
Individual examination
1.6.
Questionnaire replies and verification visits
1.7.
Non-imposition of provisional measures and subsequent procedure
2.
PRODUCT CONCERNED AND LIKE PRODUCT
2.1.
Product concerned
2.2.
Like product
2.3.
Claims regarding product scope
3.
SUBSIDISATION
3.1.
Subsidies and subsidy programmes within the scope of the current investigation
3.2.
Government's support to the biodiesel industry including through the provision of soybeans for less than adequate remuneration
3.2.1.
The application of the provisions of Article 28(1) of the basic Regulation
3.2.2.
Analysis
3.2.2.1.
Financial contribution
3.2.2.2.
Entrustment or direction of the soybean growers by the Government of Argentina
Graph 1
Argentinian production of soybeans, corn, and wheat per harvesting year
3.2.2.3.
Entrustment or direction of private bodies within the meaning of Article 3(1)(a)(iv) of the basic Regulation
3.2.2.4.
Provision of soybeans by soybean growers for less than adequate remuneration
|
Soybean production (MT) |
Soybean exports (MT) |
Soybean imports (MT) |
Soybean crushing (MT) |
Soybean oil production (MT) |
Domestic consumption soybean oil (MT) |
Biodiesel production (MT) |
2007 |
47 482 787 |
11 843 248 |
2 245 391 |
36 268 044 |
6 962 206 |
474 078 |
|
2008 |
46 238 890 |
11 733 588 |
2 891 771 |
31 709 219 |
6 024 101 |
1 078 022 |
711 864 |
2009 |
30 989 474 |
4 292 321 |
823 924 |
30 285 623 |
5 772 026 |
1 348 922 |
1 179 103 |
2010 |
52 676 218 |
13 616 012 |
189 |
36 824 921 |
7 000 075 |
2 118 336 |
1 820 385 |
2011 |
48 878 774 |
10 420 216 |
12 862 |
37 339 854 |
7 113 681 |
2 996 512 |
2 429 964 |
2012 |
40 100 197 |
6 158 407 |
1 428 |
33 333 313 |
6 353 359 |
2 841 121 |
2 456 578 |
2013 |
49 306 202 |
7 784 236 |
1 615 |
34 040 869 |
6 432 942 |
2 448 560 |
1 997 809 |
2014 |
53 397 720 |
7 360 901 |
2 227 |
37 936 186 |
7 096 392 |
3 184 146 |
2 584 290 |
2015 |
61 446 556 |
11 509 272 |
566 |
40 940 319 |
7 895 905 |
2 407 954 |
1 810 659 |
2016 |
58 799 258 |
8 910 323 |
853 849 |
44 482 510 |
8 670 493 |
3 137 953 |
2 659 275 |
2017 |
54 971 626 |
7 369 126 |
1 897 833 |
41 824 091 |
8 065 602 |
3 264 784 |
2 871 435 |
Source: Submission of the GOA, coming from different publicly available Argentinian databases. |
Graph 2
Soybean processing in Argentina
Graph 3
Argentinian domestic price versus world market price
3.2.2.5.
The function which would normally be vested in the government and the practice, which, in no real sense, differs from practices normally followed by governments
3.2.2.6.
Conclusion
3.2.2.7.
Price or income support
3.2.2.8.
The GOA's intention to support the domestic biodiesel industry
3.2.2.9.
Supporting measures to the biodiesel industry
3.2.2.10.
The set of measures adopted by the GOA qualifies as ‘any form of income/price support’ in the sense of Article XVI of the GATT 1994
Year |
Production |
Total exports |
Exports to the Union |
Exports (% of production) |
2008 |
711 864 |
680 219 |
n/a |
96 |
2009 |
1 179 103 |
1 142 283 |
n/a |
97 |
2010 |
1 820 385 |
1 342 318 |
n/a |
74 |
2011 |
2 429 964 |
1 649 352 |
n/a |
68 |
2012 |
2 456 578 |
1 543 094 |
1 387 667 |
63 |
2013 |
1 997 809 |
1 149 259 |
478 750 |
58 |
2014 |
2 584 290 |
1 602 695 |
802 415 |
62 |
2015 |
1 810 659 |
788 226 |
6 250 |
44 |
2016 |
2 659 275 |
1 626 264 |
0 |
61 |
2017 |
2 871 435 (*) |
1 650 119 (*) |
638 091 |
57 |
Source: Ministry of Energy, GOA and INDEC, GOA — * = estimation. |
3.2.2.11.
Conclusion
3.2.2.12.
Benefit
3.2.2.13.
Specificity
3.2.3.
Conclusion
3.2.4.
Calculation of the subsidy amount
Company/group |
Subsidy rate |
LDC Argentina SA |
26,14 % |
Group Renova |
25,05 % |
Group T6 |
33,15 % |
3.3.
Government mandated purchase of domestic biodiesel for more than adequate remuneration and/or income or price support (Biodiesel Supply Agreement)
3.3.1.
Introduction
3.3.2.
Findings of the investigation
3.3.3.
Conclusion
3.4.
Provision of loans and export financing on preferential terms and preferential lending
3.4.1.
Introduction
3.4.2.
Findings of the investigation
3.4.3.
Conclusion
3.5.
Government revenue forgone or not collected under the Biofuels Law of 2006
3.5.1.
Introduction
3.5.2.
Findings of the investigation
3.5.3.
Conclusion
3.6.
Provincial tax exemptions provided by the Province of Cordoba
3.6.1.
Legal basis
3.6.2.
Findings of the investigation
3.6.3.
Conclusion
3.7.
Provincial tax exemptions provided by the Province of Buenos Aires
3.7.1.
Legal basis
3.7.2.
Findings of the investigation
3.7.3.
Conclusion
3.8.
Province of Santiago del Estero System of Promotion and Industrial Development (PSPID) — Provincial Law No 6.750
3.8.1.
Legal basis
3.8.2.
Findings of the investigation
3.8.3.
Conclusion
3.9.
Agreement on municipal taxes between Louis Dreyfus Argentina and the Municipality of General Lagos
3.9.1.
Introduction
3.9.2.
Findings of the investigation
3.9.3.
Conclusion
3.10.
Percentage tax rate reduction under the ‘Pacto Fiscal’ (Decree 14/1994)
3.10.1.
Introduction
3.10.2.
Findings of the investigation
3.10.3.
Conclusion
3.11.
Real Estate exemption under the Santa Fe Industrial Law: exemption from paying real estate tax under Provincial Law No 8.478/1979 (Article 4) of Industrial Promotion; Provincial tax exemptions provided by the Province of Santa Fe; Article 183.29 Santa Fe Stamp Tax Exemption and Article 127 Santa Fe turnover tax exemption for export sales
3.11.1.
Introduction
3.11.2.
Findings of the investigation
3.11.3.
Conclusion
3.11.4.
Calculation of the subsidy amount
Company/group |
Subsidy rate |
LDC Argentina SA |
0,06 % |
Group Renova |
2,15 % |
Group T6 |
0,28 % |
3.12.
Conclusion on subsidisation
Company/group |
Amount of countervailable subsidies |
LDC Argentina SA |
26,2 % |
Group Renova |
27,2 % |
Group T6 |
33,4 % |
Other cooperating companies |
28,2 % |
All other companies |
33,4 % |
4.
INJURY
4.1.
Definition of the Union industry and Union biodiesel production
|
2014 |
2015 |
2016 |
Investigation period |
Total Union production |
11 353 223 |
11 789 896 |
11 958 862 |
13 071 053 |
Index |
100 |
104 |
105 |
115 |
Source: EBB. |
4.2.
Union biodiesel consumption
|
2014 |
2015 |
2016 |
Investigation period |
Total Union consumption |
11 907 151 |
11 791 953 |
11 435 468 |
14 202 127 |
Index |
100 |
99 |
96 |
119 |
Source: EBB, EU import statistics. |
4.3.
Imports from the country concerned
4.3.1.
Volume and market share of the imports from the country concerned
|
2014 |
2015 |
2016 |
Investigation period |
Volume of imports from Argentina (tonnes) |
0 |
31 340 |
0 |
394 005 |
Market share |
0 % |
0,3 % |
0 % |
2,8 % |
Source: EU Import statistics based on Surveillance 2 database, EBB. |
|
7/2017 |
8/2017 |
9/2017 |
10/2017 |
11/2017 |
12/2017 |
Volume of imports from Argentina (tonnes) |
0 |
0 |
29 975 |
57 526 |
188 986 |
117 518 |
Source: EU Import statistics based on Surveillance 2 database. |
2018 |
Jan |
Feb |
Mar |
Apr |
May |
Jun |
Jul |
Aug |
Volume of imports from Argentina ('000 tonnes) |
173 |
161 |
131 |
30 |
119 |
161 |
141 |
177 |
Source: EU Import statistics based on Surveillance 2 database. |
4.3.2.
Prices of imports from the country concerned and price undercutting
|
2014 |
2015 |
2016 |
Investigation period |
January-August 2018 |
Import prices from Argentina (EUR per tonne) |
— |
633 |
— |
636 |
613 |
Source: EU Import statistics based on Surveillance 2 database. |
4.4.
Economic situation of the Union industry
4.4.1.
General remarks
4.4.2.
Macroeconomic indicators
4.4.2.1.
Production, production capacity and capacity utilisation
|
2014 |
2015 |
2016 |
Investigation period |
Production capacity (tonnes) |
15 074 688 |
16 009 878 |
16 561 814 |
16 594 853 |
Index |
100 |
106 |
110 |
110 |
Capacity utilisation |
75 % |
74 % |
72 % |
79 % |
Index |
100 |
98 |
96 |
105 |
Source: EBB. |
4.4.2.2.
Sales volume and market share
|
2014 |
2015 |
2016 |
Investigation period |
Sales volume on the Union market (tonnes) |
11 363 729 |
11 305 117 |
10 920 665 |
13 004 462 |
Index |
100 |
99 |
96 |
114 |
Market share |
95,4 % |
95,9 % |
95,5 % |
91,6 % |
Source: EBB, import and export statistics. |
4.4.2.3.
Growth
4.4.2.4.
Employment and productivity
|
2014 |
2015 |
2016 |
Investigation period |
Number of employees |
2 406 |
2 763 |
2 762 |
2 733 |
Index |
100 |
115 |
115 |
114 |
Productivity (tonne/employee) |
4 718 |
4 267 |
4 329 |
4 782 |
Index |
100 |
90 |
92 |
101 |
Source: EBB. |
4.4.2.5.
Magnitude of the amount of the countervailable subsidies and recovery from past subsidisation or dumping
4.4.3.
Microeconomic indicators
4.4.3.1.
Prices and factors affecting prices
|
2014 |
2015 |
2016 |
Investigation period |
Average unit sales price in the Union on the total market (EUR/tonne) |
817 |
715 |
765 |
832 |
Index |
100 |
87 |
94 |
102 |
Unit cost of production (EUR/tonne) |
797 |
728 |
767 |
827 |
Index |
100 |
91 |
96 |
104 |
Source: Sampled Union producers. |
4.4.3.2.
Labour costs
|
2014 |
2015 |
2016 |
Investigation period |
Average labour costs per employee (EUR) |
66 530 |
71 573 |
65 237 |
65 874 |
Index |
100 |
108 |
98 |
99 |
Source: Sampled Union producers. |
4.4.3.3.
Inventories
|
2014 |
2015 |
2016 |
Investigation period |
Closing stocks (tonnes) |
117 074 |
85 725 |
92 291 |
87 864 |
Index |
100 |
73 |
79 |
75 |
Source: Sampled Union producers. |
4.4.3.4.
Profitability, cash flow, investments, return on investments and ability to raise capital
|
2014 |
2015 |
2016 |
Investigation period |
Profitability of sales in the Union to unrelated customers (% of sales turnover) |
5,0 % |
– 0,1 % |
0,9 % |
0,8 % |
Index |
100 |
– 3 |
18 |
16 |
Cash flow (EUR) |
95 181 923 |
23 004 159 |
26 458 832 |
35 102 719 |
Index |
100 |
24 |
28 |
37 |
Investments (EUR) |
8 970 184 |
19 697 707 |
8 039 845 |
38 946 892 |
Index |
100 |
220 |
90 |
434 |
Return on investments |
78 % |
– 3 % |
18 % |
16 % |
Index |
100 |
– 4 |
23 |
21 |
Source: Sampled Union producers. |
4.5.
Economic indicators following the investigation period
|
Investigation period |
January-March 2018 |
April-June 2018 |
Total production (tonnes) |
2 614 770 |
602 303 |
585 734 |
Index (annualised) |
100 |
92 |
90 |
Sales volume on the Union market (tonnes) |
2 657 665 |
591 108 |
648 698 |
Index (annualised) |
100 |
89 |
98 |
Unit cost of production (EUR/tonne) |
827 |
793 |
787 |
Index |
100 |
96 |
95 |
Average unit sales price in the Union on the total market (EUR/tonne) |
832 |
765 |
773 |
Index |
100 |
92 |
93 |
Source: Sampled Union producers. |
4.6.
Conclusion on injury
5.
THREAT OF INJURY
5.1.
Introduction
5.2.
The nature of the subsidy or subsidies in question and the trade effects likely to arise therefrom
5.3.
Significant rate of increase of subsidised imports into the Union market indicating the likelihood of substantially increased imports
5.4.
Sufficient freely disposable capacity and absorption capacity of third countries
Volume of exports from Argentina (tonnes) |
7/2017 |
8/2017 |
9/2017 |
10/2017 |
11/2017 |
12/2017 |
To the USA |
220 360 |
14 483 |
0 |
0 |
0 |
0 |
To the Union |
0 |
60 000 |
30 000 |
200 000 |
185 000 |
163 091 |
Source: Argentinian Export Statistics. |
5.5.
Price level of subsidised imports
5.6.
Level of inventories
5.7.
Conclusion
6.
CAUSATION
6.1.
Effects of the subsidised imports
6.2.
Other known factors
6.3.
Imports from third countries
Country |
|
2014 |
2015 |
2016 |
Investigation period |
People's Republic of China |
Volume (tonnes) |
5 395 |
1 160 |
38 497 |
217 313 |
Index |
100 |
22 |
714 |
4 028 |
|
Market share |
0,0 % |
0,0 % |
0,3 % |
1,6 % |
|
Average price (EUR/tonne) |
941 |
826 |
763 |
812 |
|
Malaysia |
Volume (tonnes) |
340 240 |
349 571 |
273 427 |
378 395 |
Index |
100 |
103 |
80 |
111 |
|
Market share |
2,9 % |
2,9 % |
2,3 % |
2,7 % |
|
Average price (EUR/tonne) |
883 |
880 |
975 |
1 007 |
|
All countries except Argentina, China and Malaysia |
Volume (tonnes) |
197 787 |
104 765 |
202 879 |
207 953 |
Index |
100 |
53 |
103 |
105 |
|
Market share |
1,7 % |
0,9 % |
1,7 % |
1,5 % |
|
Average price (EUR/tonne) |
820 |
791 |
762 |
891 |
|
Source: EU Import statistics based on Surveillance 2 database. |
|
Volume of imports (tonnes) |
Estimated market share |
Average price (EUR) |
Argentina |
1 092 024 |
11,5 % |
613 |
People's Republic of China |
173 693 |
1,9 % |
686 |
Indonesia |
467 769 |
5,0 % |
667 |
Malaysia |
303 421 |
3,2 % |
732 |
All countries except Argentina, the PRC and Malaysia |
150 159 |
1,6 % |
542 |
Source: EU Import statistics based on Surveillance 2 database. |
6.4.
Export performance of the Union industry
|
2014 |
2015 |
2016 |
Investigation period |
Export volume (tonnes) |
98 552 |
111 884 |
190 633 |
217 146 |
Index |
100 |
114 |
193 |
220 |
Source: Eurostat export statistics |
6.5.
Reduction of production of the Union industry
6.6.
Conclusion
7.
UNION INTEREST
7.1.
Interest of the Union industry
7.2.
Interest of unrelated importers
7.3.
Interest of users/consumers
7.4.
Conclusion
8.
DEFINITIVE COUNTERVAILING MEASURES
8.1.
Injury elimination level
8.2.
Retroactive imposition of countervailing duties
8.3.
Definitive measures
Company/Group |
Injury elimination level |
Amount of subsidisation |
Countervailing duty rate |
LDC Argentina SA |
31,7 % |
26,2 % |
26,2 % |
Group Renova |
25,0 % |
27,2 % |
25,0 % |
Group T6 |
33,9 % |
33,4 % |
33,4 % |
Other cooperating companies — COFCO Argentina SA and Cargill SACI |
29,6 % |
28,2 % |
28,2 % |
All other companies |
33,9 % |
33,4 % |
33,4 % |
9.
DISCLOSURE
10.
FORM OF THE MEASURES
Article 1
Company |
Definitive countervailing duty |
TARIC additional code |
Aceitera General Deheza SA |
33,4 % |
C493 |
Bunge Argentina SA |
33,4 % |
C494 |
LDC Argentina SA |
26,2 % |
C495 |
Molinos Agro SA |
25,0 % |
C496 |
Oleaginosa Moreno Hermanos SACIFyA |
25,0 % |
C497 |
Vicentin SAIC |
25,0 % |
C498 |
COFCO International Argentina SA |
28,2 % |
C490 |
Cargill SACI |
28,2 % |
C491 |
All other companies |
33,4 % |
C999 |