Commission Implementing Regulation (EU) 2019/765 of 14 May 2019 repealing the anti-dumping duty on imports of bioethanol originating in the United States of America and terminating the proceedings in respect of such imports, following an expiry review pursuant to Article 11(2) of the Regulation (EU) 2016/1036 of the European Parliament and of the Council

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union (1) (the ‘basic Regulation’), and in particular Article 11(2) thereof,

After consulting the Member States,

Whereas:

(1) Following an anti-dumping investigation (‘the original investigation’), by Implementing Regulation (EU) No 157/2013 (2), the Council imposed a definitive anti-dumping duty of EUR 62,3 per metric tonne (‘tonne’) on imports of bioethanol originating in the United States of America (‘US’ or ‘the country concerned’). These measures will hereinafter be referred to as ‘the measures in force’.

(2) Following the publication of a notice of impending expiry (3) of the measures in force, on 7 November 2017 the Commission received a request for the initiation of an expiry review pursuant to Article 11(2) of Regulation (EU) 2016/1036.

(3) The request was lodged by ePure (‘the applicant’), on behalf of producers representing more than 25 % of the total Union production of bioethanol.

(4) The request was based on the grounds that the expiry of measures would be likely to result in the continuation and recurrence of dumping and a continuation and recurrence of injury to the Union industry.

(5) Having determined that sufficient evidence existed for the initiation of an expiry review, the Commission announced on 20 February 2018, by notice published in the Official Journal of the European Union (4) (‘the Notice of Initiation’) the initiation of an expiry review pursuant to Article 11(2) of the basic Regulation.

(6) In the Notice of Initiation, the Commission invited interested parties to contact it in order to participate in the investigation. In addition, the Commission specifically informed other known Union producers, the known exporting producers, traders/blenders and the authorities of the US, known importers, suppliers and users, as well as traders about the initiation of the investigation and invited them to participate.

(7) Interested parties had an opportunity to comment on the initiation of the investigation and to request a hearing with the Commission and/or the Hearing Officer in trade proceedings.

(8) In its Notice of Initiation, the Commission stated that it might sample the interested parties in accordance with Article 17 of the basic Regulation.

(9) To decide whether sampling was necessary and, if so, to select a sample, the Commission asked all exporting producers and traders/blenders in the US to provide the information specified in the Notice of Initiation. In addition, the Commission asked the relevant US authorities to identify and/or contact other exporting producers and traders/blenders, if any, that could be interested in participating in the investigation.

(10) Eight producers of biofuels came forward. However, none of them produced the product under review.

(11) Furthermore, three US biofuel associations came forward and were registered as interested parties.

(12) In its Notice of Initiation, the Commission stated that it had provisionally selected a sample of Union producers. The sample was primarily based on production volume, but a good geographical spread as well as a representation of different groups was also achieved. The proposed sample consisted of four Union producers and the Commission invited interested parties to comment on the provisional sample.

(13) Following the comments received, one preliminarily sampled producer was replaced due to its relationship with another preliminarily sampled producer. The four producers in the sample accounted for 25 % of the Union production of bioethanol during the review investigation period. The sample is representative of the Union industry.

(14) To decide whether sampling was necessary and, if so, to select a sample, the Commission asked unrelated importers to provide the information specified in the Notice of Initiation.

(15) Three unrelated importers provided the requested information and agreed to be included in the sample. On that basis, the Commission decided that sampling was not necessary.

(16) As none of the US producers that came forward during the sampling exercise produced the product under review in the review investigation period, the Commission had to apply facts available with regard to the exporting producers, in accordance with Article 18 of the basic Regulation.

(17) The Commission notified the US authorities of the application of Article 18(1) of the basic Regulation and gave them the opportunity to comment. The Commission did not receive any comments.

(18) Although none of the exporting producers cooperated, the three US biofuel associations that came forward made submissions throughout the investigation. Those submissions were taken into consideration.

(19) The Commission sent questionnaires to the four sampled Union producers and the three unrelated importers that came forward.

(20) Questionnaire replies were received from the four sampled Union producers and the three unrelated importers. Two of the three unrelated importers did not in fact import the product under review from the country considered in the review investigation period and were therefore not taken into further consideration. The questionnaire reply by the remaining unrelated importer was duly taken into account.

(22) Despite the non-cooperation of the exporting producers, as explained in recitals (10) and (16) to (18), the three US biofuel associations and the complainant submitted several sets of comments regarding initiation. In view of the conclusions under chapter 3 below, these comments are not further addressed in this document.

(23) On 1 March 2019, the Commission disclosed the essential facts and considerations on the basis of which it intended to repeal the anti-dumping duty in force (‘the disclosure’). All parties were granted a period within which they could make comments on the disclosure.

(24) On 12 March 2019, the applicant made a written submission making known its views on the Commission's findings. In summary, the applicant contested the Commission's preliminary conclusion that dumping was unlikely to recur if measures were allowed to lapse.

(25) In view of these comments, the three US biofuel associations requested a hearing with the Commission's services which took place on 19 March 2019. Subsequent to this hearing, these associations sent additional documents to the Commission to support certain statements. On 20 March 2019, the applicant explained its views in a hearing.

(26) The comments submitted by the interested parties were considered and taken into account where appropriate.

(27) The investigation of dumping and injury covered the period from 1 January 2017 to 31 December 2017 (‘the review investigation period’). The examination of trends relevant for the assessment of injury covered the period from 1 January 2014 to the end of the investigation period (‘the period considered’).

(28) The product under review is bioethanol, sometimes referred to as ‘fuel ethanol’, i.e. ethyl alcohol produced from agricultural products (as listed in Annex I to the Treaty on the Functioning of the European Union), denatured or undenatured, excluding products with a water content of more than 0,3 % (m/m) measured according to the standard EN 15376, but including ethyl alcohol produced from agricultural products (as listed in Annex I to the Treaty on the Functioning of the European Union) contained in blends with gasoline with an ethyl alcohol content of more than 10 % (v/v) intended for fuel uses originating in the US, currently falling within CN codes ex 2207 10 00, ex 2207 20 00, ex 2208 90 99, ex 2710 12 21, ex 2710 12 25, ex 2710 12 31, ex 2710 12 41, ex 2710 12 45, ex 2710 12 49, ex 2710 12 50, ex 2710 12 70, ex 2710 12 90, ex 3814 00 10, ex 3814 00 90, ex 3820 00 00 and ex 3824 99 92 (TARIC codes 2207100012, 2207200012, 2208909912, 2710122111, 2710122592, 2710123111, 2710124111, 2710124511, 2710124911, 2710125011, 2710127011, 2710129011, 3814001011, 3814009071, 3820000011 and 3824999266). Bioethanol can be produced from various agricultural feedstock, such as sugar cane, sugar beet, potatoes, manioc and corn. There can be minor differences in the production process between producers.

(29) The types of bioethanol and bioethanol in blends covered by this expiry review, despite possible differences in terms of feedstock 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 minor variations in the product under review do not alter its basic definition or its characteristics.

(30) Bioethanol destined for applications other than fuel use was not covered by the scope of the original investigation and is therefore also not covered by this expiry review.

(31) In the original investigation, the Commission established that bioethanol manufactured by the Union industry and sold on the Union market has similar basic physical, chemical and technical characteristics when compared to bioethanol exported to the Union from the US. Despite the use of a range of different agricultural feedstock as raw material, bioethanol originating in the US is interchangeable with bioethanol produced in the Union.

(32) The main difference between the majority of the bioethanol sold on the US market and the bioethanol sold on the Union market concerns the different standards for moisture content. US producers typically produce bioethanol with a water content of 0,5 % or more while the specifications for the Union market require a lower water content of maximum 0,3 %, measured according to the standard EN 15376, requiring additional refinement from producers of third countries in order to meet the specifications for the Union market.

(33) The Commission did not receive any comments on the like product from the interested parties that made comments in this expiry review. Therefore, the Commission confirmed that those products are like products within the meaning of Article 1(4) of the basic Regulation.

(34) None of the US exporting producers or traders/blenders of the product under review cooperated with the investigation. The Commission therefore used facts available, in accordance with Article 18 of the basic Regulation, to establish the likelihood of continuation or recurrence of dumping. In this regard, the Commission used statistical data (i.e. the Article 14(6) database, data of the Agricultural Marketing Resource Center (‘AGMRC’), US International Trade Commission (‘US ITC’) statistics, and US Energy Information Administration statistics (‘US EIA’)), as well as the information provided by the applicant in the request for review.

(35) The Commission notified the US authorities of the application of Article 18(1) of the basic Regulation and gave them the opportunity to comment. The Commission did not receive any comments.

(36) In accordance with Article 11(2) of the basic Regulation, the Commission examined whether dumping was currently taking place and whether the expiry of the measures would be likely to lead to a continuation or recurrence of dumping.

(37) During the period considered including the review investigation period, exports to the Union of bioethanol originating in the US were negligible. According to the 14(6) database, imports from the country concerned amounted to only 4 213,5 tonnes during the review investigation period, representing a market share of 0,1 %. The majority of this volume (that is, 99 %) was imported into one Member State during one month in what appears to be one delivery.

(38) On the basis of that factual background, the Commission preliminarily decided that it has insufficient data to conclude that a representative amount of imports of the product under review during the review investigation period showed the continuation of dumping in the Union.

(39) Subsequently, the Commission examined the likelihood of recurrence of dumping from the US based on facts available, in accordance with Article 18 of the basic Regulation.

(40) The Commission analysed whether there was a likelihood of recurrence of dumping should the measures lapse. When doing so, the following elements were analysed: US domestic prices, US export prices to third countries, production capacity, spare capacity, consumption and stocks of bioethanol of all producers in the US, whether or not complying with the moisture content of the Union market, and the attractiveness of the Union market.

Normal value

(41) In the absence of cooperation from the US exporting producers of bioethanol, the normal value was based on data provided by the applicant in the request for review, in accordance with Article 18 of the basic Regulation.

(42) The request for review was based on publicly available data of the AGMRC (5). The request for review used the bioethanol price in one of the largest bioethanol producing US states, Illinois, to establish the normal value.

(43) For the sake of completeness, the Commission included in its calculation of the normal value the yearly average price quotation of the domestic sales price within four of the largest bioethanol-producing states in the US for which the AGMRC gave full data for the review investigation period, i.e. Iowa, Illinois, Nebraska, and South Dakota.

(44) Furthermore, the Commission assessed the market prices of bioethanol, as quoted on the Chicago Board of Trade (‘CBOT’). The average CBOT price was slightly higher than the average domestic sales price reported by AGMRC in the review investigation period.

(45) Based on publicly available information, the Commission found that the standards for bioethanol applicable in the US differ from the standards applicable on other markets, including the three major US export markets Brazil, Canada, and Peru, in terms of the water content requirements. The US standards allowed for the highest water content as compared to the markets in Brazil, Canada, and Peru.

(46) In the request for review, the applicant claimed that when examining potential US exports of bioethanol to the Union, the Commission should take into account additional costs of production related to decreasing the water content of bioethanol (‘Union conversion premium’). As this methodology was used in the original investigation, the Commission accepted this claim.

(47) To allow for a fair comparison in accordance with Article 2(10)(a) of the basic Regulation, the Commission adjusted the US domestic sales price based on the information provided by AGMRC and CBOT for the additional conversion costs related to decreasing the water content of bioethanol for exports. In the absence of cooperation from the US exporting producers, the Commission relied on data provided by the applicant, which estimated the Union conversion premium at EUR 12,30 per tonne. In order to take a conservative approach, the Commission applied this premium to the normal value. This normal value was used in all dumping calculations, even those using exports to markets where the standards for bioethanol allow for a higher water content in comparison to the Union standard.

Export price

(48) Export prices during the review investigation period were established on the basis of publicly available data, i.e. US ITC statistics. In the request for review, the applicant identified Brazil, Canada, and Peru as the three major US export markets and suggested that the likelihood of recurrence of dumping should be examined based on US exports the these countries. The applicant further provided estimates for international and domestic freight, and for the Union conversion premium as further explained in recital 47. The Commission accepted this approach suggested by the applicant and assessed the prices of the US bioethanol sales on the three major US export markets during the review investigation period.

(49) In addition, for the sake of completeness, the Commission analysed the average export price of the total US bioethanol sales to third markets, excluding the Union.

(50) The export prices available in the US ITC statistical database were reported at free alongside ship (‘FAS’) level. The Commission corrected these data to ex-works level by deducting domestic transport costs in the US. In the absence of cooperation by the US exporting producers, the Commission relied on information concerning US domestic transport costs provided by the applicant.

(51) In the absence of evidence that would suggest otherwise, the Commission considered that the US export prices to the individual export markets already included conversions costs related to decreasing the water content in bioethanol. Therefore, the Commission did not apply any adjustment for the additional costs incurred by the US exporting producers.

Comparison

(52) The average normal value was compared with the weighted average export price from the US to the three major US exports markets, as established above, in accordance with Article 2(11) of the basic Regulation, both at ex-works level. Another comparison was made between the average normal value and the weighted average export price from the US to all third markets, excluding the Union.

(53) In order to make a conservative assessment, the Commission used a normal value increased by the Union conversion premium as explained in recital 47 and an export price for which the Commission assumed that any conversion costs were already included and therefore, it was not necessary to adjust the export price for conversion costs.

Dumping margin using export prices to third countries during the review investigation period

(54) To establish the dumping margin on exports to third countries, the Commission compared the normal value based both on the data from AGMRC and CBOT with export price to the three main US export markets and to all third markets excluding the Union duly adjusted to ex-works level.

(55) The Commission determined that there was no dumping found in the review investigation period for the exports to the three main US export markets examined individually and to all third markets excluding the Union in total, neither when taking into account the AGMRC data nor the CBOT price for the calculation of the normal value.

(56) Following the disclosure, the applicant claimed that the Commission incorrectly concluded that there was no dumping found in the review investigation period. The applicant in its comments on disclosure identified dumping on two US export markets (India and UAE) and also in relation to exports to two Member States (Spain and the United Kingdom).