Commission Implementing Regulation (EU) 2024/2163 of 14 August 2024 imposing a provisional anti-dumping duty on imports of biodiesel originating in the People's Republic of China

THE EUROPEAN COMMISSION,

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), and in particular Article 7 thereof,

After consulting the Member States,

Whereas:

(1) On 20 December 2023, the European Commission (‘the Commission’) initiated an anti-dumping investigation with regard to imports of biodiesel originating in the People’s Republic of China (‘the country concerned’, ‘PRC’ or ‘China’) on the basis of Article 5 of Regulation (EU) 2016/1036 of the European Parliament and of the Council (‘the basic Regulation’). It published a Notice of Initiation in the Official Journal of the European Union (2) (‘the Notice of Initiation’).

(2) The Commission initiated the investigation following a complaint lodged on 7 November 2023 by the European Biodiesel Board (‘the complainant’ or ‘EBB’). The complaint was made on behalf of the Union industry of biodiesel in the sense of Article 5(4) of the basic Regulation. The complaint contained evidence of dumping and of resulting material injury that was sufficient to justify the initiation of the investigation.

(3) Imports of biodiesel are currently subject to anti-dumping measures when originating in the United States of America (‘USA’) (3) and to countervailing measures when originating in Argentina (4), Indonesia (5), or the USA (6).

(4) On 29 April 2024, the complainant requested registration of imports pursuant to Article 14(5) of the basic Regulation. The Commission did not register imports as the conditions for retroactive application described under Article 10(4) of the basic Regulation were deemed not to be met.

(5) 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 the complainant, other known Union producers, the known exporting producers and the authorities of the PRC, known importers, suppliers and users, traders, as well as associations known to be concerned about the initiation of the investigation and invited them to participate.

(6) 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. No party requested a hearing with the Hearing Officer. The Commission held hearings with the complainant (along with associations known to be concerned), the sampled exporting producer EcoCeres, and the related importer of Zhuoyue – Excelence New Energy BV.

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

(8) In its Notice of Initiation, the Commission stated that it had provisionally selected a sample of Union producers. The Commission selected a sample of three Union producers on the basis of the largest volume of production and sales of the like product in the Union between 1 October 2022 and 30 September 2023 reported at initiation stage. Account was also taken of the product mix. The three sampled Union producers accounted for approximately 12 % of the estimated total volume of production of the like product in the Union and 23 % of the EU production and sales of the producers that replied to the inquiry. The Commission invited interested parties to comment on the provisional sample. The complainant and the Chinese exporting producer EcoCeres provided comments.

(9) EcoCeres requested the inclusion of the Union producer Neste in the sample. It claimed that the inclusion of Neste was warranted to ensure the overall representativity of the sample as it would be the largest Union producer, accounting for 15 % of the estimated total volume of biodiesel production in the Union, and without which the sample would not be representative in terms of the production or sales volume. It also found Neste’s inclusion in the sample warranted as it would be a large producer of the product types hydrotreated vegetable oil (‘HVO’), the main product type sold by EcoCeres on the Union market.

(10) The Commission analysed EcoCeres’ claim. First, the Commission noted that the sample took account of the size of individual legal entities. In this respect, in view of clarifications with regard to Neste’s production volume provided by the complainant, the statement of EcoCeres regarding Neste’s respective production volumes in its different plants appeared to be overstated. Second, the information available on file showed that, in the investigation period, the Union production consisted predominantly of fatty acid methyl esters (‘FAME’); whereas production volumes of HVO (7) were clearly lower. Third, the provisional sample already took account of this product mix to the extent that it included Raffineria di Gela S.p.A., part of the Eni group, which manufactures HVO. EcoCeres’ claim to add Neste to the sample was therefore rejected.

(11) In light of the feedstocks mix of Chinese producers (waste-based), EBB claimed that the sampled Union producer Saipol, which manufactures biodiesel from rapeseed oil, should be replaced by a producer manufacturing biodiesel from advanced feedstocks located in Germany. EBB argued that the Chinese biodiesel industry does not use rapeseed oil to manufacture biodiesel, as they mainly use used cooking oil (‘UCO’) which is domestically available. Accordingly, should Saipol be confirmed in the definitive sample of Union producers, almost half of the sample’s Union sales could not be directly compared with Chinese imports of waste-based biodiesel. EBB argued that Verbio SE would be an appropriate sampled EU producer for the present investigation because it is located in Germany and Verbio’s plants use advanced feedstocks while also using rapeseed oil to manufacture biodiesel.

(12) Following this claim, the Commission clarified that the criteria for selecting a sample of Union producers were the sales or production volume of the companies considered, as well as the product mix. The parties sampled on that basis were considered representative for the Union industry as a whole. Consequently, despite EBB’s comments, the Commission found no grounds to exclude Saipol from the sample of Union producers. Indeed, Saipol was amongst the largest biodiesel producers (8) in the Union, as noted by the complainant itself. Moreover, Saipol was deemed representative of the Union industry as it manufactured biodiesel starting from rapeseed oil, the dominant feedstock in the Union for producing biodiesel.

(13) Furthermore, the inclusion of a Verbio plant in the sample would be unjustified because, as pointed out by EBB itself, the production volume of Masol Iberia Biodiesel S.L.U., one of the three companies proposed for the sample, was significantly higher. In addition, Masol Iberia Biodiesel S.L.U. would ensure that a comparison could be made between Union industry and exporting producers’ sales of biodiesel made from advanced feedstocks. Therefore, the request to include Verbio SE was rejected.

(14) However, in view of the main feedstock use as reported by the sampled Chinese parties, the Commission considered it appropriate to enlarge the volume of UCO-based biodiesel in the sample of Union producers as that would improve the representativeness of the Union industry product mix vis-à-vis Chinese imports and facilitate the comparison between Union prices and Chinese import prices of biodiesel. The Commission therefore decided to add Chevron Renewable Energy Group, a biodiesel producer based in Germany using UCO as feedstock, to the sample.

(15) The four sampled Union producers accounted for approximately 15 % of the estimated total volume of production of the like product in the Union and 28 % of the EU production and sales of the producers that replied to the inquiry.

(16) The Commission invited the four sampled Union producers to reply to the questionnaire. It also invited interested parties to comment on the revised sample. EcoCeres provided comments.

(17) EcoCeres stated that the sample decision was taken based on an erroneous factual basis. In particular, it claimed that Neste’s Rotterdam’s plant had a larger production capacity than the one of Saipol and that the Commission had underestimated the HVO production in the EU (9). EcoCeres therefore requested the inclusion of at least one Neste entity/plant in the sample, instead of or in addition to Raffineria di Gela.

(18) The allegation that Neste’s Rotterdam’s plant had a HVO production capacity which was higher than Saipol’s biodiesel production does not prove that during the investigation period the relevant legal entity had actually a level of production or EU sales close to such production capacity. At the same time, as explained in recital (8) above, production and sales volumes rather than production capacity are determinant elements for a company to be included (or not) in the sample. As to the alleged underestimation of HVO production in the Union, the Commission noted that the party submitted contradictory information. The 5 million tonnes HVO production in the Union in 2022 alleged by EcoCeres were contradicted by another of its submissions (10) in which the capacity (i.e. a figure normally higher than actual production) in 2023 of stand-alone HVO production facilities in the Union was reported to amount to 3 million tonnes. In light of the above and in order not to unduly overrepresent HVO in the sample, EcoCeres’ request concerning the inclusion of at least one Neste entity/plant in the sample was rejected.

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

(20) Two unrelated importers provided the requested information and agreed to be included in the sample. In view of the low number of replies, the Commission decided that sampling was not necessary.

(21) To decide whether sampling is necessary and, if so, to select a sample, the Commission asked all exporting producers in the PRC to provide the information specified in the Notice of Initiation. In addition, the Commission asked the Mission of the People’s Republic of China to the European Union to identify and/or contact other exporting producers, if any, that could be interested in participating in the investigation.

(22) Sixty-three (63) exporting producers in the country concerned provided the requested information and agreed to be included in the sample. In accordance with Article 17(1) of the basic Regulation, the Commission selected a sample of three exporting producers/groups of exporting producers on the basis of the largest representative volume of exports to the Union which could reasonably be investigated within the time available. In accordance with Article 17(2) of the basic Regulation, all known exporting producers and the authorities of the country concerned were consulted on the selection of the sample.

(23) The Commission received comments on the sample from one interested party. The exporting producer Henan Junheng Industrial Group Biotechnology Company., Ltd. (‘Henan Junheng’) argued that the Commission should increase the number of companies manufacturing hydrogenated vegetable oil (‘HVO’) in the sample to reflect the differences in costs and export prices resulting from different production processes of FAME and HVO.

(24) The Commission recalled that the initial sample covered a substantial share of the imports (approximately 55 %). In addition, the producer of HVO included in the sample represented around one third of the sampled export volume. Therefore, the Commission considered that the sample sufficiently represented the Chinese exporting producers manufacturing both distinct subcategories of biodiesel. Consequently, the Commission rejected the claim and confirmed the initial sample of exporting producers.

(25) One exporting producer in the PRC requested individual examination under Article 17(3) of the basic Regulation. The examination of this request during the provisional stage of the investigation would have been unduly burdensome, in particular considering the complicated structure of the sampled exporting producers/groups of exporting producers (in total five production entities and several relevant related companies, such as suppliers or traders) and the corresponding duration of the on-spot verifications. In addition, the exporting producer requesting the individual examination sold biodiesel to the Union directly and via a related trader, i.e. individual examination of this company would require an investigation of at least two entities. The Commission will decide whether to grant individual examination at the definitive stage of the investigation.

(26) The Commission sent a questionnaire concerning the existence of significant distortions in the PRC within the meaning of Article 2(6a)(b) of the basic Regulation to the Government of the People’s Republic of China (‘GOC’).

(27) The Commission sent questionnaires to sampled Union producers, two importers/traders, the complainant, and the exporting producers in the PRC. Except for the complainant’s one, the same questionnaires were made available online (11) on the day of initiation.

(29) The investigation of dumping and injury covered the period from 1 October 2022 to 30 September 2023 (‘the investigation period’). The examination of trends relevant for the assessment of injury covered the period from 1 January 2020 to the end of the investigation period (‘the period considered’).

(30) The product under investigation is fatty-acid mono-alkyl esters and/or paraffinic gasoils obtained from synthesis and/or hydro-treatment, of non-fossil origin, commonly known as ‘biodiesel’, in pure form or as included in a blend, currently falling under CN codes ex 1516 20 98 (TARIC codes 1516 20 98 21, 1516 20 98 22, 1516 20 98 23, 1516 20 98 29, 1516 20 98 31, 1516 20 98 32 and 1516 20 98 39), ex 1518 00 91 (TARIC codes 1518 00 91 21, 1518 00 91 22, 1518 00 91 23, 1518 00 91 29, 1518 00 91 31, 1518 00 91 32 and 1518 00 91 39), ex 1518 00 95 (TARIC code 1518 00 95 10, 1518 00 95 11 and 1518 00 95 19), ex 1518 00 99 (TARIC codes 1518 00 99 21, 1518 00 99 22, 1518 00 99 23, 1518 00 99 29, 1518 00 99 31, 1518 00 99 32 and 1518 00 99 39), ex 2710 19 43 (TARIC codes 2710 19 43 21, 2710 19 43 22, 2710 19 43 23, 2710 19 43 29, 2710 19 43 31, 2710 19 43 32 and 2710 19 43 39), ex 2710 19 46 (TARIC codes 2710 19 46 21, 2710 19 46 22, 2710 19 46 23, 2710 19 46 29, 2710 19 46 31, 2710 19 46 32 and 2710 19 46 39), ex 2710 19 47 (TARIC codes 2710 19 47 21, 2710 19 47 22, 2710 19 47 23, 2710 19 47 29, 2710 19 47 31, 2710 19 47 32 and 2710 19 47 39), 2710 20 11 , 2710 20 16 , ex 3824 99 92 (TARIC codes 3824 99 92 10, 3824 99 92 11, 3824 99 92 13, 3824 99 92 14, 3824 99 92 15, 3824 99 92 16, and 3824 99 92 19), 3826 00 10 and ex 3826 00 90 (TARIC codes 3826 00 90 11, 3826 00 90 12, 3826 00 90 13, 3826 00 90 19, 3826 00 90 31, 3826 00 90 32 and 3826 00 90 39) excluding sustainable aviation fuel meeting the requirements of ASTM D7566-22 Standard Specification for Aviation Turbine Fuel Containing Synthesized Hydrocarbons, currently falling under CN codes ex 2710 19 43 (TARIC additional code 89FT), ex 2710 19 46 (TARIC additional code 89FT), ex 2710 19 47 (TARIC additional code 89FT), ex 2710 20 11 (TARIC additional code 89FT) and ex 2710 20 16 (TARIC additional code 89FT), and originating in the People’s Republic of China (‘the product under investigation’).

(31) The product under investigation can be produced through different processes, such the transesterification of oils and fats, a Fischer-Tropsch synthesis or the hydrotreatment of renewable feedstocks. It is a renewable fuel produced from a wide range of raw materials, including vegetable oils such as rapeseed oil, soybean oil or palm oil, used cooking oils (‘UCO’), animal fats or biomass.

(32) Biodiesel is typically used in the transport sector, such as the road, rail, aviation and maritime sectors, mainly blended with fossil diesel but also in its pure form.

(33) The product concerned is the product under investigation originating in the PRC (‘the product concerned’).

(35) The Commission decided at this stage that those products are therefore like products within the meaning of Article 1(4) of the basic Regulation.

(36) The China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters (‘CCCMC’), empowered to represent 27 exporting producers (12) in this investigation, submitted that biodiesel produced from feedstocks listed in Annex IX of the Renewable Energy Directive II (‘RED II’) (13) should be excluded from the scope of the present investigation on the grounds that in a recent investigation concerning fatty acid originating in Indonesia “the Commission found that fatty acids with DoS of at least 97 % produced from waste and certified by a voluntary scheme recognized by the Commission pursuant to Article 30(4) of the RED II or a national certification scheme established pursuant to Article 30(6) of the RED II, while sharing the same characteristics with other fatty acids, have different uses and are not in competition with the like product” (14). The Commission noted that, unlike in the fatty acid case quoted, in the present investigation all the product types are typically subject to RED II, in view of the fact that customers request biodiesel produced using feedstocks listed in Annex IX part A and B of the RED II. They also are, as further explained below in this section, in direct competition. The Commission rejected CCCMC’s claim.

(37) Within the product scope of this proceeding, three main product groups can be distinguished: FAME, HVO and Sustainable Aviation Fuel (‘SAF’).