Council Regulation (EC) No 599/2009 of 7 July 2009 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of biodiesel originating in the United States of America

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EC) No 384/96 of 22 December 1995 on protection against dumped imports from countries not members of the European Community (1) (the ‘basic Regulation’), and in particular Article 9 thereof,

Having regard to the proposal submitted by the Commission after consulting the Advisory Committee,

Whereas:

(1) The Commission, by Regulation (EC) No 193/2009 (2) (the ‘provisional Regulation’) imposed a provisional anti-dumping duty on imports of biodiesel originating in the United States of America (‘USA’ or ‘country concerned’).

(2) In the parallel anti-subsidy proceeding, the Commission, by Regulation (EC) No 194/2009 (3) imposed a provisional countervailing duty on imports of biodiesel originating in the United States of America.

(3) Subsequent to the disclosure of the essential facts and considerations on the basis of which it was decided to impose provisional anti-dumping measures (‘provisional disclosure’), several interested parties made written submissions making their views known on the provisional findings. The parties who so requested were granted an opportunity to be heard. The Commission continued to seek and verify all information it deemed necessary for its definitive findings. The oral and written comments submitted by the interested parties were considered and, where appropriate, the provisional findings were modified accordingly.

(4) All parties were informed of the essential facts and considerations on the basis of which it was intended to recommend the imposition of definitive anti-dumping measures on imports of biodiesel originating in the USA and the definitive collection of the amounts secured by way of the provisional duty (‘final disclosure’). They were also granted a period within which they could make representations subsequent to this disclosure.

(5) The US Government (USG) and other interested parties expressed their disappointment with the decision to grant only sixteen days to provide comments on the provisional disclosure and also with the decision to decline the requests of certain parties for a meaningful extension of time to file those comments.

(6) Article 20(1) of the basic Regulation provides that interested parties may be provided with the details underlying the essential facts and considerations on the basis of which provisional measures have been imposed. In this regard, it is the Commission's practice to provide disclosure to all interested parties to a proceeding upon publication in the Official Journal of the European Union of a regulation imposing provisional measures and to provide a period of time within which parties may provide comments thereon. This practice was followed in this proceeding. In regard to the time period within which parties were required to provide comments, the basic Regulation does not specify what period should be allowed. In this proceeding, it was considered that a period of sixteen days (subsequently extended to seventeen days) be granted given the complexity of the proceeding and the need to respect the requirement in Article 11(9) of the basic anti-subsidy Regulation that the investigation be concluded within thirteen months of initiation.

(7) Further to the disclosure of the provisional findings in the parallel anti-subsidy proceeding, the USG commented on the duty rate established for ‘all other companies’. In regard to the rate of duty established for US companies that did not make themselves known and cooperate in the investigation, the provisional duty rate was set at the level of the lower of the highest subsidisation margin or highest injury margin found for the sampled cooperating exporting producers. The same method was also applied in the anti-dumping proceeding. The rate of the anti-dumping duty so established was as set out in Article 1(2) of the provisional Regulation (‘all other companies’ rate of EUR 182,4 per tonne). The USG considers that this rate of duty is a rate improperly calculated on the basis of the facts available. The USG considers that, in order to rely on facts available under Article 18 of the basic Regulation, it must first be determined that an interested party has refused or failed to provide the ‘necessary information’ (4). The USG rather considers that the weighted average rate calculated for the non-sampled cooperating companies should be applied instead.

(8) In reply to this it should be noted that, at initiation stage, the Commission sent the sampling form, complaint and the Notice of Initiation to the companies listed in the complaint (more than 150 companies). A copy of the sampling form was also attached to the Note Verbale sent to the Mission of the United States of America to the European Communities at initiation and they were invited to send it to US exporters/producers USA. Moreover, the National Biodiesel Board (‘NBB’), which has been an interested party from the outset of this proceeding, represents a great number of companies in the biodiesel industry in the USA.

(9) The Notice of Initiation as well as the cover letter attached to the sampling form drew the attention of the consequences of non-cooperation. As mentioned in recital (8) of the provisional Regulation, more than 50 companies identified themselves in the context of the sampling exercise and provided the requested information within the 15 day period. These companies accounted for more than 80 % of the total imports of biodiesel from the USA to the Community.

(10) Subsequent to the imposition of provisional measures, the US authorities were asked to provide additional information. In particular, the authorities were asked to invite any additional exporters/producers of biodiesel in the USA beyond those listed in Article 1 and the Annex to the provisional Regulation, who were not known at the time of the initiation and did not previously refuse to cooperate (5), to make themselves known.

(11) The US authorities provided a list containing the names of more than 100 additional companies (producers/exporters) in the USA. It was examined whether any of the companies had been invited to cooperate at the stage of initiation of the proceeding. The investigation revealed that a significant number of the companies on the list had already been invited to cooperate during the sampling exercise but had chosen not to do so at that time. In other words, these companies were aware of the consequences of non-cooperation in accordance with Article 18 of the basic Regulation.

(12) However, as regards those companies (more than 40) on the list who were unknown to the Commission at the time of the initiation of this proceeding, it was noted that the request to the US authorities to provide details of these companies was made after the imposition of provisional measures. It was therefore decided to add these companies to the Annex of this Regulation and apply the same duty rate to these companies as to those who expressly cooperated but were not chosen in the sample. These companies received disclosure of the essential facts and considerations on the basis of which it was intended to impose definitive measures and were invited to comment on the fact that it was proposed to add their names to the Annex of this Regulation.

(13) Following final disclosure, the USG welcomed the proposal to apply the weighted average duty to additional companies. However, the USG considered that no explanation had been provided as to why other companies are made subject to the ‘all other companies’ rate. In this regard it is noted that for the companies that were invited to cooperate during the sampling exercise, explanations have already been given above. Regarding possible US exporters/producers that were not individually notified of the investigation nor mentioned in the list referred to in recital (11), it is noted first of all that extensive efforts were made upon initiation of the proceeding to contact companies in the USA that might be concerned by this proceeding (see recitals (8) and (10) above). Furthermore, additional efforts were made subsequent to the imposition of provisional measures as mentioned in recital (10) above to identify other companies which resulted in the addition of more than 40 companies to the list of those to whom the weighted average duty would apply. It is considered that these extensive efforts have given every opportunity to biodiesel companies in the USA to make themselves known. In this regard, it is noted that the relevant industry association has been involved in the proceeding since its initiation. Consequently, it is considered that the ‘all other companies’ rate of duty should be applied to companies that did not make themselves known.

(14) One company that submitted a reply to the sampling form and was consequently listed in the Annex to the Provisional Regulation requested that its parent company be added to the list of companies in the Annex to this Regulation. This company also requested that the city location of the two companies be changed in the Annex to correctly reflect the address on the invoices of the companies.

(15) Having examined this company's request, it was considered that the parent company should also be listed in the Annex to this Regulation as it was mentioned in the company's reply to the sampling form as the only related company involved in the biodiesel business. The city location for both companies is also being revised.

(16) It is recalled that the investigation of dumping and injury covered the period from 1 April 2007 to 31 March 2008 (‘investigation period’ or ‘IP’). With respect to the trends relevant for the injury assessment, the Commission analysed data covering the period from January 2004 to the end of the IP (‘period considered’).

(17) In the absence of any comments concerning the sampling of exporting producers in the USA the provisional findings in recitals (5) to (10) of the provisional Regulation are hereby confirmed.

(18) Certain parties commented on the representativity of the sample of Community producers. These comments are addressed in recitals (74) to (78) below.

(19) It is recalled that in the notice of initiation, the product allegedly being dumped was defined as fatty-acid monoalkyl esters and/or paraffinic gasoils from synthesis and/or hydro-treatment, of non-fossil origin (commonly known as ‘biodiesel’), whether in pure form or in a blend.

(20) The complaint contained prima facie evidence that biodiesel and all blends, of biodiesel with mineral diesel, produced in the USA and exported at dumped price to the Community had affected the economic situation of the biodiesel producers in the Community. Consistent with the characteristics of the relevant US biodiesel producers and domestic market, the definition of the product concerned intended to cover biodiesel also when incorporated into the biodiesel blends. It was however considered that the definition of the product concerned as mentioned in the Notice of Initiation and in recital (19) above, could give rise to concerns as to what producers and what product types were intended to be covered by the investigation and those that were not.

(21) Similarly, for the investigation of dumping and injury, in particular for establishing the dumping margins and injury elimination levels it was necessary to clearly identify the product types that were concerned by the investigation.

(22) In line with the characteristics of the US market, the product concerned was provisionally defined as fatty acid monoalkyl esters and/or paraffinic gasoil obtained from synthesis and/or hydro-treatment, of non-fossil origin, commonly known as ‘biodiesel’, whether in pure form or in blends, which are above B20. Hence the product concerned covered pure biodiesel (B100) and all blends which contain more that 20 % biodiesel (‘the product concerned’). This threshold was considered to be appropriate to allow a clear distinction between the various types of blends which are intended to be further blended and those intended for direct consumption on the US market.

(23) The investigation showed that all types of biodiesel and the biodiesel in the blends covered by this investigation, despite possible differences in terms of raw material used for the production, or variances in the production process, have the same or very similar basic physical, chemical and technical characteristics and are used for the same purposes. The possible variations in the product concerned do not alter its basic definition, its characteristics or the perception of that various parties have of it.

(24) Claims were received from interested parties on the definition of the product concerned and the like product whereby they contested both the definition of the product concerned and the like product simultaneously with the same arguments without making any distinction between the concept of product concerned and like product in the context of the proceeding.

(25) It is recalled that the concept of the product concerned is governed by the provisions of Article 1(1) to 1(3) of the basic Regulation, the interpretation of the term ‘like product’ is mentioned in Article 1(4) of the basic Regulation. Hence, the claims will be addressed separately below.

(26) One party questioned to what extent blends with low proportion of biodiesel (e.g. B21) should still deem to qualify as biodiesel on par with pure biodiesel (B100) or on similar blends that consist primarily of biodiesel with lower amount of mineral diesel (e.g. B99). They claimed that B100 and B99 basically underwent the investigation and that all the calculations of dumping and injury were made on the basis of these two product types. In their view establishing a threshold just above B20, namely the low-level blend sold directly to consumers in the USA leads to an artificial definition of the product concerned.

(27) The same party also questioned whether a blend with 20 % biodiesel still qualifies to be a biodiesel fuel rather than mineral diesel which is not included in the definition of the product concerned. This party understood that the EU supports the view that a new customs heading should be created (6) for biodiesel in the customs Harmonised System (HS). In its view the Commission broadened the definition of the product in the present proceeding and expanded the product types affected by the imposition of the measures.

(28) In addition, the party considered that at the time of the investigation no specific threshold existed to determine what is biodiesel for the classification in the combined nomenclature (CN) code 3824 90 91 , the specific code created since 1 January 2008 for biodiesel by the EU. The party questioned whether under the rule 3(b) of the general rules for the interpretation of the CN (7) a blend containing less than 50 % biodiesel could still qualify as biodiesel. They further mentioned that the examples of blends mentioned in the Commission questionnaire were of high biodiesel contents and thus implied that the product concerned is only biodiesel and blends containing very high levels of biodiesel.

(29) The party also claimed that the EU cannot change the definition of the product concerned whilst maintaining a different like product. They referred to the provisional disclosure to the sampled US biodiesel producers that demonstrates that the sampled US producers sold blends exclusively made of various types of biodiesel. Hence the product concerned should be limited to the products containing 100 % of biodiesel (B100), even if composed of biodiesel made of different feedstock, or to blends containing 99 % of biodiesel (B99).

(30) The party referred to a recent Court Judgement (8) concerning imports of ammonium nitrate and concluded that the rationale of that judgment also applies to the current proceeding and that biodiesel that is not part of blends in very high content cannot be subject to the investigation and to measures as it is not the like product for which dumping and injury findings were drawn, namely products that contain only biodiesel (B100) or 99 % of biodiesel (B99).

(31) The parties did not bring any evidence or a legal reference which would show that the product concerned was not correctly defined in the present investigation. The provisions in Article 1(1) to 1(3) of the basic Regulation provide guidance as to the definition of the product concerned. Article 1(1) states that: ‘An anti-dumping duty may be applied to any dumped product whose release for free circulation in the Community causes injury.’

(32) As mentioned in recital (20) above, the complaint contained prima facie evidence that biodiesel and all blends, of biodiesel with mineral diesel, produced in the USA and exported at dumped prices to the Community had affected the economic situation of the biodiesel producers in the Community. The dumping and the injury margins were determined for each individual sampled producer on the basis of the product types they sold to the Community market.

(33) The parties did not bring any evidence showing that the threshold fixed in the provisional Regulation to set the dividing line between product concerned and product non concerned was artificial. As mentioned in recitals (24) and (26) of the provisional Regulation, the investigation showed that B20, and potentially lower level blends, were actually sold directly to consumers in the US. The investigation also showed that the market for blending and the market for consumer products were different markets with different customers: one market where biodiesel and biodiesel blends are destined to further blending by traders and blenders and one market where the blends are destined to the distribution network and thus to consumers. Defining the threshold for the product concerned above B20 allowed to draw a clear dividing line and avoided confusion between the products, the markets and the various parties in the USA.

(34) In all anti-dumping investigations it is common that individual companies investigated do not produce and sell all the product types included in the definition of the product concerned. Some companies may produce a very limited range of product types while other may produce a larger range. This however does not affect the definition of the product concerned. It is therefore considered that the claim that the product concerned should only cover the product types that were exported by the US producers and used for the dumping and the injury calculations is unfounded.

(35) As mentioned in the provisional Regulation and in recital (19) above, the investigation primarily focused on biodiesel, whether in pure form or incorporated in blends. The anti-dumping measures will apply to the relevant blends exported to the Community market. Hence, it is considered that the question whether a blend with 20 % biodiesel still qualifies for a biodiesel fuel rather than mineral diesel which is not included in the definition of the product concerned is not relevant.