EU launches US bio-ethanol anti-dumping probe

(BRUSSELS) - The EU announced Friday it has launched an anti-dumping investigation against the United States over federal and state tax credits and other subsidy support for producers of ethanol fuel.

The European Commission has 15 months in which to address the complaint of "material injury" to European Union producers, after an association of renewable ethanol producers, ePURE, claimed a 500-percent rise in EU imports of the fuel from the United States between 2008 and 2010.

The fuel is produced from sugar fermentation using mainly cereals, sugar beet and maize.

The EU's Official Journal, or daily record of law, cited "prima facie" evidence produced by ePURE showing that imported volumes and prices had "among other consequences had a negative effect on the level of prices charged by the (EU) industry."

That resulted in "substantial, adverse effects on the overall performance and the financial situation of the (EU) industry."

The EU spelled out that it will investigate US federal subsidies issued in the form tax credits and a biofuel grant programme, plus state-level support from Illinois, Minnesota, Nebraska and South Dakota.

Should the EU uphold the complaint, it could decide to impose import duties on US bio-ethanol, as it has done with US and Canadian biodiesel.