Commission Implementing Regulation (EU) 2024/1959 of 17 July 2024 imposing a provisional anti-dumping duty on imports of erythritol originating in the People’s Republic of China

• (303) Therefore, the Commission provisionally concluded that aside from the fact that these imports were not made at prices below the prices of the Union industry, the import volumes were so low that they did not contribute to the material injury suffered by the Union industry.

5.2.2.   Export performance of the Union industry

• (304) The volume of exports of the known Union producer developed over the period considered as follows:

Table 13

Export performance of the sampled Union producers

	2020	2021	2022	Investigation period	Investigation period
Export volume (tonnes)	[5 600 -7 000 ]	[7 200 -9 000 ]	[5 800 -7 200 ]	[780 -980 ]	[780 -980 ]
Index	100	129	103	103	14
Average price (EUR/tonnes)	[2 350 -2 750 ]	[2 300 -2 700 ]	[3 000 -3 500 ]	[3 050 -3 580 ]	[3 050 -3 580 ]
Index	100	98	128	130	130
Source: Jungbunzlauer S.A. questionnaire reply.	Source: Jungbunzlauer S.A. questionnaire reply.	Source: Jungbunzlauer S.A. questionnaire reply.	Source: Jungbunzlauer S.A. questionnaire reply.	Source: Jungbunzlauer S.A. questionnaire reply.	Source: Jungbunzlauer S.A. questionnaire reply.

• (305) The export volume of the Union industry was higher than its domestic sales, and followed a similar trend as its sales in the Union, however with an even sharper decrease in the investigation period. The United States has been by far the most important export market of the Union industry, and the main reason for the decrease in exports was an increase in imports from the PRC to the United States. The investigation found that Chinese exports to third country markets, including the United States, are also sold below the normal value. The Union industry could, thus not compete against such sales on the US market. The average sales price for exports also followed a similar trend than that of domestic sales, increasing as a result of higher cost of production.

• (306) The loss of export sales volume had a negative effect on the production volume and capacity utilisation of the Union producer, thus further contributing to a significant increase in its fixed costs per unit produced. As explained in recital (324), this was taken into consideration when establishing the target price and therefore the injury margin.

• (307) Therefore, the Commission provisionally concluded that the export performance of the Union industry did not attenuate the causal link between the dumped imports from the country concerned and the material injury found.

5.2.3.   Cost increases in raw materials and energy prices

• (308) CCCMC claimed that abnormal high energy prices in the EU and disruptions of maize corn supplies at competitive prices from Ukraine were two factors having a bearing effect on the performance of the Union industry.

• (309) As set out in recital (277), the Union industry’s cost of production increased due to price increases of energy and raw materials such as glycose and chemicals. Until 2022 the Union industry could to some extent increase its prices in reaction to the increase in the cost of production. However, during the investigation period, given decreasing prices of imports from the PRC, as set out in recital (248), this was no longer possible. In that context, in order to keep selling, the Union industry would have had to lower its selling prices to below the cost of production. Therefore, the cost increase did not attenuate the causal link.

5.2.4.   Other factors

• (310) CCCMC claimed that the broader competition on the Union market of sweeteners and an adverse scientific publication ¹⁰⁶ should be two factors to be evaluated in the causation analysis of the proceeding.

• (311) The proposed factors suggested by CCCMC would have been relevant if they resulted in a contraction of demand for the product under investigation. However, as shown in Table 2 the demand increased over the period considered and there were no other indications that these two factors were having any negative effect on the situation of the Union industry.

5.3.   Conclusion on causation

• (312) As set out in recitals (289) and (290), the Union industry saw from 2022 onwards a dramatic reversal of its good earlier performance, as evidenced across practically all injury indicators, which further accentuated in the investigation period, when several injury indicators (in particular profitability, cash flow and return on investments) reached significant negative levels.

• (313) This coincided with a significant increase in imports from PRC at prices that decreased by 20 % during the period considered and significantly undercut Union sales prices. Chinese imports also suppressed the prices of the Union industry during the IP.

• (314) The Commission distinguished and separated the effects of all known factors on the situation of the Union industry from the injurious effects of the dumped imports. The effect of these factors on the Union industry’s negative developments in terms of were however only limited, if any.

• (315) On the basis of the above, the Commission concluded at this stage that the dumped imports from the country concerned caused material injury to the Union industry and that the other factors, considered individually or collectively, did not attenuate the causal link between the dumped imports and the material injury. The injury consists notably of reduced sales, profits, production, market share, productivity, return on investments and utilisation of capacity.

6. LEVEL OF MEASURES

• (316) In the present case, the complainant claimed the existence of raw material distortions within the meaning of Article 7(2a) of the basic Regulation.

• (317) Thus, in order to conduct the assessment on the appropriate level of measures, the Commission first established the amount of duty necessary to eliminate the injury suffered by the Union industry in the absence of distortions under Article 7(2a) of the basic Regulation.

• (318) Then it examined whether the dumping margin of sampled exporting producers would be higher than their injury margin.

6.1.   Injury margin

• (319) The injury would be removed if the Union Industry were able to obtain a target profit by selling at a target price in the sense of Articles 7(2c) and 7(2d) of the basic Regulation.

• (320) In accordance with Article 7(2c) of the basic Regulation, for establishing the target profit, the Commission took into account the following factors: the level of profitability before the increase of imports from the PRC, the level of profitability needed to cover full costs and investments, research and development (R & D) and innovation, and the level of profitability to be expected under normal conditions of competition. Such profit margin should not be lower than 6 %.

• (321) As a first step, the Commission established a basic profit covering full costs under normal conditions of competition. The Commission considered that the combination of the profit of years 2020 and 2021 would be the appropriate target profit, in view of the fact that imports from the country concerned did not have an impact yet, on the profitability of the EU industry. Such profit margin was established at 15,5 %.

• (322) The Union Industry provided evidence that its level of investments, research and development (R & D) and innovation during the period considered would have been higher under normal conditions of competition. The Commission verified this information by comparing it to the published accounts of a company in the same segment, i.e. production of lactic acid from fermented sugar. Indeed, the claims of the EU Industry were found to be warranted. To reflect this in the target profit, the Commission calculated the difference between investments, R & D and innovation (‘IRI’) expenses under normal conditions of competition as provided by the EU Industry and verified by the Commission with actual IRI expenses over the period considered. Such difference, expressed as a percentage of turnover, was 0,53 %.

• (323) Such percentage of 0,53 % was added to the basic profit margin of 15,5 % mentioned in the recital (321), leading to a target profit of 16,03 %.

• (324) The Union producer did not produce significant quantities of the product concerned during the investigation period. Therefore, its production costs were not considered appropriate for the purposes of establishing the target price. These costs were affected by a significant increase in fixed costs per unit caused by sales volume losses (both on the domestic and export markets) which also translated into production volume losses. As the sales of this producer were largely made from stocks produced in 2022, the production cost of that year (adjusted to September 2023 inflation index for France) ¹⁰⁷, was considered appropriate for this investigation.

• (325) On this basis, the non-injurious weighted average price is in the range of 3 200 to 3 700 EUR per tonne, resulting from applying the above-mentioned profit margin of 16,03 % to the cost of production during the investigation period of the sole Union producer.

• (326) In accordance with Article 7(2d) of the basic Regulation, as a final step, the Commission assessed the future costs resulting from Multilateral Environmental Agreements, and protocols thereunder, to which the Union is a party, and of ILO Conventions listed in Annex Ia that the Union industry will incur during the period of the application of the measure pursuant to Article 11(2).

• (327) Based on the evidence available, the Commission established an additional future cost in the range of 30 to 35 EUR per tonne. This was added to the non-injurious price mentioned in recital (325).

• (328) On this basis, the Commission calculated a non-injurious weighted average price in the range of 3 230 to 3 735 EUR per tonne for the like product of the Union industry by applying the above-mentioned target profit margin (see recital (323)) to the cost of production of the sole Union producer as described in recital (324) and then adding the adjustments under Article 7(2d).

• (329) The Commission then determined the injury margin level on the basis of a comparison of the weighted average import price of the sampled cooperating exporting producers the PRC, as established for the price undercutting calculations, with the weighted average non-injurious price of the like product sold by the Union producer on the Union market during the investigation period. Any difference resulting from this comparison was expressed as a percentage of the weighted average import CIF value.

• (330) The injury elimination level for ‘other cooperating companies’ and for ‘all other companies’ is defined in the same manner as the dumping margin for these companies (see Section 3.3. above).

Company	Dumping margin (%)	Injury margin (%)
Baolingbao Biology Co. Ltd	31,9	86,8
Dongxiao Biotechnology Co. Ltd	76,9	169,2
Sanyuan Biotechnology Co. Ltd	187,5	156,7
Other cooperating companies	162,0	152,9
All other imports originating in the People’s Republic of China	235,6	316,3

6.2.   Conclusion on the level of the provisional measures

• (331) Following the above assessment, provisional anti-dumping duties should be set as below in accordance with Article 7(2) of the basic Regulation:

Company	Provisional anti-dumping duty
Baolingbao Biology Co., Ltd.	31,9  %
Dongxiao Biotechnology Co., Ltd.	76,9  %
Sanyuan Biotechnology Co., Ltd.	156,7  %
Other cooperating companies	152,9  %
All other imports originating in the People’s Republic of China	235,6  %

7. UNION INTEREST

• (332) Having decided to apply at this stage Article 7(2) of the basic Regulation, the Commission examined whether it could clearly conclude that it was not in the Union interest to adopt measures in this case, despite the determination of injurious dumping, in accordance with Article 21 of the basic Regulation.

• (333) The determination of the Union interest was based on an appreciation of all the various interests involved, including those of the Union industry, importers, and users.

7.1.   Interest of the Union industry

• (334) The sole producer of erythritol in the Union lodged the complaint (see recital (2)), cooperated fully in the investigation and expressed its interest to the imposition of measures.

• (335) The investigation has shown that the Union producer is suffering material injury caused by the dumped imports from the country concerned. These imports significantly undercut the Union producer’s prices, in any event, exercised significant price suppression as shown by the underselling margins found, and caused significant loss of market share and profits towards the end of the period considered, and during the investigation period, as elaborated in recitals (258) to (315) above.

• (336) The imposition of measures would likely prevent a further surge of imports from The PRC at very low prices. Without measures, Chinese producers will continue to dump the product concerned on the Union market preventing the Union industry from resuming full production, from selling at an adequate price and from generating a sufficient profit and thus causing further material injury to the Union industry.

• (337) It was therefore concluded that imposing measures against the PRC would be in the interest of the Union industry.

7.2.   Interest of unrelated importers

• (338) The Commission did not receive responses from Union importers with the dedicated questionnaire.

• (339) The Commission, thus, concluded that it is unlikely that the imposition of anti-dumping duties on erythritol originating in the PRC will have a permanent impact over the profitability of importers.

7.3.   Interest of users

• (340) Two users came forward in the investigation and provided a reply to the questionnaire.

• (341) However, with regard to their positions on the imposition of anti-dumping measures and on whether any increase on the price of erythritol could not be passed to their customers, the users only provided comments in the confidential version of their replies. The Commission is therefore not able to express its detailed assessment of those positions.

• (342) For the users in question, imports of erythritol from the PRC represent in value 3 % to 11 % in relation to their overall cost of goods sold. For other types of users the percentage would be lower. It should also be noted that 2021 was a record year in the Union for both erythritol consumption and imports from the PRC in absolute terms, despite the fact that import prices from the PRC were 56 % higher than in the investigation period (see Table 4). Hence, higher prices did not dissuade users or final consumers from consuming erythritol.

• (343) Thus, measures re-establishing a level playing field on the Union market would not be expected to have a significant negative impact on users or consumers. It is understood that the users in question would not oppose such measures destined to restore healthy competition between the Union and third country producers.

• (344) In the light of the above, it is provisionally concluded that the imposition of any anti-dumping measures are unlikely to affect seriously the situation of the users.

7.4.   Conclusion on Union interest

• (345) On the basis of the above, the Commission concluded that there were no compelling reasons that it was not in the Union interest to impose measures on imports of erythritol originating in the country concerned at this stage of the investigation.

8. PROVISIONAL ANTI-DUMPING MEASURES

• (346) On the basis of the conclusions reached by the Commission on dumping, injury, causation, level of measures and Union interest, provisional measures should be imposed to prevent further injury being caused to the Union industry by the dumped imports.

• (347) Provisional anti-dumping measures should be imposed on imports of erythritol originating in the People’s Republic of China, in accordance with the lesser duty rule in Article 7(2) of the basic Regulation. The Commission concluded that the appropriate level to remove injury should be the dumping margin.

• (348) On the basis of the above, the provisional anti-dumping duty rates, expressed on the CIF Union border price, customs duty unpaid, should be as follows:

Company	Provisional anti-dumping duty rate (%)
Baolingbao Biology Co., Ltd.	31,9
Dongxiao Biotechnology Co., Ltd.	76,9
Sanyuan Biotechnology Co., Ltd.	156,7
Other cooperating companies	152,9
All other imports originating in the People’s Republic of China	235,6

• (349) The individual company anti-dumping duty rates specified in this Regulation were established on the basis of the findings of this investigation. Therefore, they reflect the situation found during this investigation with respect to these companies. These duty rates are exclusively applicable to imports of the product concerned originating in the country concerned and produced by the named legal entities.

• (350) Imports of the product concerned produced by any other company not specifically mentioned in the operative part of this Regulation or in the Annex, including entities related to those specifically mentioned, should be subject to the duty rate applicable to ‘all other imports originating in the People’s Republic of China’. They should not be subject to any of the individual anti-dumping duty rates.

• (351) To minimise the risks of circumvention due to the difference in duty rates, special measures are needed to ensure the application of the individual anti-dumping duties. The companies with individual anti-dumping duties must present a valid commercial invoice to the customs authorities of the Member States. The invoice must conform to the requirements set out in Article 1(3) of this Regulation. Imports not accompanied by that invoice should be subject to the anti-dumping duty applicable to ‘All other imports originating in the People’s Republic of China’.

• (352) While presentation of this invoice is necessary for the customs authorities of the Member States to apply the individual rates of anti-dumping duty to imports, it is not the only element to be taken into account by the customs authorities. Indeed, even if presented with an invoice meeting all the requirements set out in Article 1(3) of this Regulation, the customs authorities of Member States must carry out their usual checks and may, like in all other cases, require additional documents (shipping documents, etc.) for the purpose of verifying the accuracy of the particulars contained in the declaration and ensure that the subsequent application of the lower rate of duty is justified, in compliance with customs law.

• (353) Should the exports by one of the companies benefiting from lower individual duty rates increase significantly in volume after the imposition of the measures concerned, such an increase in volume could be considered as constituting in itself a change in the pattern of trade due to the imposition of measures within the meaning of Article 13(1) of the basic Regulation. In such circumstances and provided the conditions are met an anti-circumvention investigation may be initiated. This investigation may, inter alia, examine the need for the removal of individual duty rate(s) and the consequent imposition of a country-wide duty.

9. REGISTRATION

• (354) As mentioned in recital (3), the Commission made imports of the product concerned subject to registration. Registration took place with a view to possibly collecting duties retroactively under Article 10(4) of the basic Regulation.

• (355) In view of the findings at provisional stage, the registration of imports should be discontinued.

• (356) No decision on a possible retroactive application of anti-dumping measures has been taken at this stage of the proceeding.

10. INFORMATION AT PROVISIONAL STAGE

• (357) In accordance with Article 19(a) of the basic Regulation, the Commission informed interested parties about the planned imposition of provisional duties. This information was also made available to the general public via DG TRADE’s website. Interested parties were given three working days to provide comments on the accuracy of the calculations specifically disclosed to them.

• (358) Comments were received from the complainant and one exporting producer. The complainant’s comments did not relate to the accuracy of the calculations. The exporting producer argued that a clerical error was made when adjusting the normal value for differences in indirect taxation. Based on this comment, the Commission corrected clerical errors in the calculations of the dumping margins for all three sampled exporting producers.

11. FINAL PROVISION

• (359) In the interests of sound administration, the Commission will invite the interested parties to submit written comments and/or to request a hearing with the Commission in trade proceedings within a fixed deadline.

• (360) The findings concerning the imposition of provisional duties are provisional and may be amended at the definitive stage of the investigation,

HAS ADOPTED THIS REGULATION:

Article 1

Company	Provisional anti-dumping duty rate (%)	TARIC additional code
Baolingbao Biology Co., Ltd.	31,9	89BG
Dongxiao Biotechnology Co., Ltd.	76,9	89BH
Sanyuan Biotechnology Co., Ltd.	156,7	89BI
Other cooperating companies listed in the Annex	152,9
All other imports originating in the People’s Republic of China	235,6	C999

Article 2

Article 3

Article 4

This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union.

Article 1 shall apply for a period of six months.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 17 July 2024.

For the Commission

The President

Ursula VON DER LEYEN

(accessed on 8 April 2024).

https://doi.org/10.1787/eco_surveys-chn-2019-en (accessed on 8 April 2024).

ANNEX

COOPERATING EXPORTING PRODUCERS IN THE PRC NOT SAMPLED

Name	TARIC additional code
Shandong Xiangchi Jianyuan Bio-Tech Co., Ltd.	89BJ
Yusweet Co., Ltd.	89BK

ELI: http://data.europa.eu/eli/reg_impl/2024/1959/oj

ISSN 1977-0677 (electronic edition)