Commission Implementing Regulation (EU) 2019/244 of 11 February 2019 imposing a definitive countervailing duty on imports of biodiesel originating in Argentina

that the development of domestic biodiesel was aimed at maximising the added value of soy, rather than reducing the use of fossil fuels. Reasons for the development of the biodiesel industry given by this research body were, among others, the growing opportunity to supply the needs of external markets and the differentials in terms of export duties, encouraging production with greater added value over that of basic products such as soybeans

This is repeated in Marcelo Regunaga, and Agustin Tejeda Rodriguez, La politica de Comercio Agricola de Argentina y el Desarrollo Sustentable, International Centre for Trade and Sustainable Development — ICTSD, 2015, (available at https://www.ictsd.org/sites/default/files/research/La%20Politica%20de%20Comercio%20Agricola%20de%20Argentina%20y%20el%20Desarrollo%20Sustentable.pdf, accessed on 4.9.2018), Maria Marta Di Paola, La producción de biocombustibles en Argentina, Informe ambiental anual — FARN (Fundation ambiente y recursos naturales), 2013, (available at http://www.farn.org.ar/wp-content/uploads/2014/07/informe2013-1.186-209.pdf, accessed on 4.9.2018), Evelina Goldstein and Graciela Gutman, Biocombustibles y biotecnologia. Contexto internacional, situation en Argentina, CEUR (Urban and regional centre of studies), 2010 (available at http://www.ceur-conicet.gov.ar/archivos/publicaciones/biocombustibles2.pdf, accessed on 4.9.2018), and Ricardo Rozemberg and Martina Chidiak, Biocombustibles en la Argentina, Integration y Comercio (Interamerican Development Bank), 2015 (available at http://www19.iadb.org/intal/icom/data/Biocombustibles%20en%20la%20Argentina.pdf, accessed on 4.9.2018).

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(190) Furthermore, a study conducted by a governmental entity, the National Institute of Agricultural Technology (Instituto Nacional de Tecnología Agropecuaria, INTA) in 2011

Jorge A. Hilbert, Rodrigo Sbarra, Martin Lopez Amoros, Produccion de biodiesel a partir de aceite de soja — Context y Evolucion Reciente, Istituto Nacional de Tecnologia Agropecuaria — Ministerio de Agricultura, Ganaderia y PESCA, 2011, page 124 (available at https://inta.gob.ar/sites/default/files/script-tmp-inta_biodiesel_de_aceite_de_soja_en_argentina.pdf, accessed on 4.9.2018).

concluded that it is common to the biodiesel market that it is stimulated by the State for different reasons through different policies, [i]n other words, it is likely that the market is artificially stimulated and that, without the presence of the State, it loses economic relevance, and that the obvious conclusion is that biodiesel does not seem to push the production of soybeans but that the causality goes in the opposite direction.

(191) This support has continued until after the investigation period, as in February 2018 the Minister of Energy, the Governor of Santa Fe and CARBIO agreed to set up a joint working group to better design and improve the national strategy for biodiesel

Press article in Clarin on 2.2.2018, Acuerdan crear una mesa de trabajo para potenciar la cadena del biodiésel (available at https://www.clarin.com/rural/acuerdan-crear-mesa-trabajo-potenciar-cadena-biodiesel_0_BJ3nrSfIf.html, accessed on 4.9.2018).

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(192) In 2010, the GOA set a blending mandate for the domestic market, requiring the fuel companies in Argentina to purchase biodiesel and blend it with mineral diesel before sale

Secretaria de Energia, Ratifícase el Acuerdo de Abastecimiento de Biodiesel para su Mezcla con Combustibles Fósiles en el Territorio Nacional del 20 de enero de 2010. Pautas a cumplir para el abastecimiento de Biodiesel al mercado de combustibles fósiles, Resolucion 7/2010 from 4.2.2010.

. This blending mandate was set up together with Biodiesel Supply Agreements between the GOA and biodiesel producers from 2010 until 2015. Those Supply Agreements were established because of the importance of the insertion of biofuels into the energy scheme of the country and it was therefore necessary to establish clear guidelines that guarantee efficiently and effectively the achievement of the objectives proposed by the national executive power

Secretaría de Energía, Ratifícase el Acuerdo de Abastecimiento de Biodiesel para su Mezcla con Combustibles Fósiles en el Territorio Nacional del 20 de enero de 2010. Pautas a cumplir para el abastecimiento de Biodiesel al mercado de combustibles fósiles, Resolucion 7/2010 from 4.2.2010.

, and further taking into account the objectives of the national state to promote the agro industrial activity generating added value to the raw materials produced on national territory

Secretaría de Energía, Ratifícase la Addenda al Acuerdo de Abastecimiento de Biodiesel para su mezcla con combustibles fósiles en el Territorio Nacional, suscripta el 5 de julio de 2010. Modifícase la Resolución No 7/2010, Resolución 554/2010 from 6.7.2010, repeated in Secretaría de Energía, Resolución 450/2013 from 6.8.2013 and Secretaría de Energía, Acuerdo de Abastecimiento de Biodiesel para su Mezcla con Combustibles Fósiles en el Territorio Nacional. Ratificación, Resolución 660/2015 from 20.8.2015.

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(193) As discussed in recitals (265) to (267), the GOA did not sign any Biodiesel Supply Agreements after 2015 but continued to allocate quotas and set the price at which the blending companies have to purchase biodiesel. The quota was based upon the expected quantity required by the domestic market to fulfil the blending mandate. The rest of the Argentinian production could only be exported.

(194) During the investigation period, the price of biodiesel on the domestic market was set on a monthly basis, differentiating for large, large non-integrated, and small and medium companies. The domestic price of biodiesel was based upon the following formula:

Cost of soybean oil (as published by the Ministry of Agriculture) + cost of methanol + cost of labour + other costs + return of capital (being set at 3 %)

http://www.energia.gob.ar/contenidos/verpagina.php?idpagina=3818, accessed on 4.9.2018.

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(195) None of the sampled groups of exporting producers received a quota and supplied the domestic market during the investigation period. However, the average set prices on the domestic market appear to be higher than the average export price, especially for the small, medium, and large non-integrated biodiesel producers. Therefore, by artificially setting the price of domestic biodiesel at an artificially high level, the GOA pursued a policy of providing price support to the small and medium-sized biodiesel industry selling on the domestic market.

(196) Following the disclosure of the information document, the GOA disputed the finding that the domestic price of biodiesel is set at an artificially high level.

(197) The Commission disagreed. To assess the domestic price level of biodiesel the Commission used public data provided by the GOA. That public data showed that the domestic price is set by the GOA and thus is not left to market forces. The GOA did not dispute that it sets the domestic biodiesel prices. Furthermore, the public data showed that prices on the domestic market paid by the companies having access to that market (i.e. the small and medium-sized companies) were higher, as a matter of fact, than the export price. The GOA did not dispute that price difference either. Therefore, the Commission concluded that the domestic price of biodiesel is set at an artificially high level. Consequently, that claim was rejected.

(198) Following the disclosure of the information document, the GOA claimed that the causality connection between the alleged income or price support and a subsequent effect of export increase or import reduction is not positively ascertained and that the largest producers are obstructed to sell domestically.

(199) The Commission rejected this claim. By regulating the domestic biodiesel market and giving a quota only to the smaller biodiesel companies, the GOA established an industry where the largest producers are obstructed to sell domestically and thus are fully export-oriented, thereby encouraging the export competitiveness of the biodiesel industry. Moreover, Table 2 in recital (209) provides data on the Argentinian production of biodiesel since 2008 (when Argentina started production on a large scale) and the export of biodiesel. Table 2 shows that the income support to the biodiesel industry has had a positive effect on exports due to the fact that this has been created as an export oriented industry and remains so until today.

(200) As explained in recitals (186) to (191), the GOA had manifestly the intention to support the entire domestic biodiesel industry, irrespective of whether it is domestically and export-oriented. However, none of the sampled exporting producers had any relevant domestic sales during the investigation period. All sampled exporting producers explained that with the supply of small and medium companies who were given quotas by the GOA, the domestic demand was satisfied. The fact that a special price was set for large companies did not alter the fact that none of the large companies sold on the domestic market during the investigation period. As a result, by impeding the biodiesel industry from selling domestically, the GOA propelled the export performance of the Argentinian biodiesel industry.

(201) Therefore, the Commission concluded that the GOA's intention to support the creation and development of the Argentinian biodiesel industry is manifest.

3.2.2.9.

Supporting measures to the biodiesel industry

(202) As discussed in recitals (186) to (201), the GOA sought to support the biodiesel industry by adopting a set of measures, including the export taxes on soybeans, export quotas on the production of other grains than soybeans, an import ban on soybeans during the period before the investigation period and granting subsidies to the soybean growers in the most under-developed provinces within Argentina. Those measures created an artificial, compartmentalised, low-priced domestic soybean market in Argentina for the benefit of the domestic biodiesel industry. Moreover, with the Biofuels Law of 2006

Law 26.093 of 2006.

the GOA set up a promotion regime for the production of biodiesel. As also mentioned in recital (191), this support has continued even after the investigation period when the GOA, together with other authorities and operators set up a joint working group to better design and improve the national strategy for biodiesel. Therefore, the Commission concludes on the basis of the information available that in the last decade the GOA has put in place a set of measures in order to create, develop and support the biodiesel industry.

3.2.2.10.

The set of measures adopted by the GOA qualifies as any form of income/price support in the sense of Article XVI of the GATT 1994

(203) By the set of measures described in recitals (186) to (201), the GOA provides income support to the biodiesel industry. Even if it could be argued that the measures put in place by the GOA on soybean producers do not amount to entrustment or direction, quod non, the Commission considers that they would at the very least amount to regulatory conditions which artificially allow biodiesel producers to obtain soybeans at lower prices than those available internationally. A 2012 resolution

Joint Resolution No 438/2012, 269/2012 and 1001/2012 of Ministry of Economy and Public Finance, Ministry of Industry and Ministry of Federal Planning, Public Investment and Services.

of the GOA acknowledged that the biodiesel industry has been making profits reaching up to 25 % in 2012 because of the set of measures adopted by the GOA.

(204) Moreover, the GOA has put mandatory blending requirements in place so that fuel companies in Argentina have to purchase biodiesel at artificially high prices set by the GOA. As explained in Section 3.3, the Commission does not countervail the Biodiesel Supply Agreements since the exporting producers did not benefit from this measure during the investigation period. However, the fact that the system is in place indicates that the GOA also provides price support to the biodiesel industry.

(205) The Commission also notes that through the Biofuels Law of 2006

See Chapter II in Law 26.093 of 2006, available at http://servicios.infoleg.gob.ar/infolegInternet/anexos/115000-119999/116299/norma.htm

the GOA set up a promotion regime for the production of biodiesel, including the granting of incentives to support the development of this industry.

(206) All those measures show that the Argentinian biodiesel industry is supported and artificially stimulated. This is even acknowledged by the GOA in one of the publications of the National Institute of Agricultural Technology, stating that it is likely that the market is artificially stimulated and that, without the presence of the state, it loses economic relevance

Jorge A. Hilbert, Rodrigo Sbarra, Martin Lopez Amoros, Produccion de biodiesel a partir de aceite de soja — Context y Evolucion Reciente, Istituto Nacional de Tecnologia Agropecuaria — Ministerio de Agricultura, Ganaderia y PESCA, August 2011, page 124 (available at https://inta.gob.ar/sites/default/files/script-tmp-inta_biodiesel_de_aceite_de_soja_en_argentina.pdf, accessed on 4.9.2018).

and that the differential export tax is a clear incentive to produce biodiesel, and that without state assistance, the biodiesel market for companies that depend on the purchase of oil in the market would not be sustainable as the only sale product

Jorge A. Hilbert, Rodrigo Sbarra, Martin Lopez Amoros, Produccion de biodiesel a partir de aceite de soja — Context y Evolucion Reciente, Istituto Nacional de Tecnologia Agropecuaria — Ministerio de Agricultura, Ganaderia y PESCA, August 2011, page 131 (available at https://inta.gob.ar/sites/default/files/script-tmp-inta_biodiesel_de_aceite_de_soja_en_argentina.pdf, accessed on 4.9.2018).

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(207) Therefore, the Commission concluded that through the set of measures mentioned above the GOA directly or indirectly provides income or price support to the biodiesel industry, thereby contributing to its competitiveness.

(208) Moreover, as mentioned in recitals (199) and (200), the Argentinian biodiesel industry is a sector that was set up as export-oriented where world market prices prevail.

(209) As shown in Table 2, the Argentinian biodiesel industry was initially set up as an export-oriented industry, where especially in the first years almost all the production of biodiesel was exported and entered its largest export markets under the Generalised System of Preferences with a zero tariff

Centro de Economia Internacional (CEI) — Ministry of foreign affairs of Argentina, Los biocombustibles ya froman parte de las agendas global y hemisférica, 02.2011 (available at http://www.cei.gob.ar/userfiles/cei%20NOTA%2012.pdf, accessed on 4.9.2018).

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Table 2

Argentinian production and export of biodiesel (in MT)

Source: Ministry of Energy, GOA and INDEC, GOA — = estimation.

YearProductionTotal exportsExports to the UnionExports (% of production)2008711864680219n/a96200911791031142283n/a97

201018203851342318n/a74201124299641649352n/a6820122456578154309413876676320131997809114925947875058201425842901602695802415622015181065978822662504420162659275162626406120172871435 ()1650119 ()63809157

(210) Therefore, the support to the domestic biodiesel industry favoured exports of biodiesel whereby the biodiesel producers were able to unfairly compete with biodiesel producers in other countries not benefiting from lower input prices. Lower costs resulted in higher incomes, which could either be transformed into additional profit or used to reduce the price, or both. The Argentinian biodiesel industry remains as having export markets, and in particular the Union market, as its main focus.

(211) Following final disclosure, the GOA disagreed with the finding of the Commission that a set of measures adopted by the GOA qualifies as any form of income or price support in the sense of Article XIV of the GATT 1994 and Article 1.1(a)(2) of the SCM Agreement, resulting in an increase of exports of biodiesel.

(212) As the GOA did not provide any further reasoning to support this statement, the Commission rejected this claim.

3.2.2.11.

Conclusion

(213) Therefore, the Commission concluded that through a set of measures, the GOA directly or indirectly provided income/price support to the biodiesel industry resulting in an increase of exports of biodiesel, within the meaning Article 3(1)(b) of the basic Regulation.

3.2.2.12.

Benefit

(214) Having established that the set of measures constitutes a financial contribution by the GOA by means of entrustment or direction of private bodies and/or income/price support, the Commission calculated the amount of subsidisation in terms of the benefit conferred on the recipient, which was found to exist during the investigation period, in accordance with Article 3(2) and Article 5 of the basic Regulation.

(215) Because most of the GOA's measures aimed at artificially lowering the domestic price of soybeans resulting in higher income for Argentinian biodiesel producers, the Commission examined whether the GOA's support to the biodiesel industry conferred a benefit by reference to the difference between the prices paid by domestic biodiesel producers and a benchmark based on the prevailing market conditions in Argentina for soybeans.

(216) The Commission assumed that such a difference resulted in higher profits obtained by the Argentinian biodiesel producers and thus at the very least equalled the benefits obtained through the GOA's income/price support. This comparative method also ensured that there was no double counting of other subsidies countervailed in the present investigation and which also provide income/price support to Argentinian biodiesel producers.

(217) The Commission first calculated the weighted average purchase price of soybeans paid by the sampled Argentinian producers during the investigation period. The weighted average was calculated month-by-month and as delivered from the soybeans growers to the biodiesel plant in Argentina.

(218) The average purchase price was based on the prices, net of VAT, and quantities indicated in transaction-by-transaction listings of invoices submitted by the companies and verified during the verification visits.

(219) This average price needed to be compared with an appropriate benchmark. Under Article 6(d) of the basic Regulation the adequacy of remuneration shall be determined in relation to prevailing market conditions for the product in question in the country of provision, i.e. Argentina, including price, quality, availability, marketability, transportation and other conditions of purchase

See WT/DS436/AB/R United States — Countervailing Measures on Certain Hot-Rolled Carbon Steel Flat Products From India, 8 December 2014, para. 4.244.

. This mirrors Article 14(d) of the SCM Agreement and should be interpreted and applied in the light thereof.

(220) Soybeans are a commodity, and soybeans imported into Argentina are comparable to domestically grown soybeans. The sampled exporting producers imported all of the soybeans on the basis of CIF, having on average the same price level regardless of the origin. The actual import prices delivered on CIF terms to the crushing plants were on the same price level as the world market price, which is quoted as FOB Gulf of Mexico. Purchases of domestically grown soybeans were found to be made on several Incoterms. However, the significant majority of purchases of domestically grown soybeans were also delivered to domestic crushing plants. Imports of soybeans represented a significant volume of the sampled exporting producers' purchases, namely 4,6 %. Those purchases were spread over hundreds of transactions. Although the sampled exporting producers had different suppliers from several neighbouring countries, the import price was found to be on average at the same level, as described in recital (223).

(221) Therefore, the Commission considered that the actual prices paid by the sampled exporting producers for imported soybeans are considered to reflect undistorted market conditions in Argentina, including the generally applicable delivery charges included in the final price

See in that respect the Appellate Body findings in WT/DS436/AB/R United States — Countervailing Measures on Certain Hot-Rolled Carbon Steel Flat Products From India, 8 December 2014, paras 4.292-4.322.

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(222) The fact that those imports by the sampled exporting producers were not used for the production of biodiesel but for producing soybean oil does not alter this conclusion, because during the investigation period the demand for soybeans for producing biodiesel in Argentina was fully covered by the domestic supply of soybeans. At the same time there are no differences in quality between the different soybeans available that would render the imported soybeans not usable for producing biodiesel. Consequently the Commission considered that those purchases constitute an appropriate benchmark.

(223) On that basis, the Commission used the actual price at which the sampled exporting producers imported soybeans into Argentina, which all came from neighbouring countries, as the closest possible proxy for undistorted Argentinian domestic prices for these products. Indeed, those prices were at the same level as world market prices and were at an average price of 6043 ARS/MT during the investigation period.

(224) The Commission then compared the price paid for domestically grown soybeans by the Argentinian producers with the weighted average actual import price for soybeans on a month-by-month basis. These imports were all done under a temporary importation regime and were therefore not subject to import duties and the actual price paid by the sampled exporting producers is considered to be adequate in the prevailing market terms and conditions in Argentina.

(225) The total amount of the difference represents the savings obtained by the Argentinian producers of biodiesel which purchase soybeans in the Argentinian distorted market compared to the price which they would have paid in the absence of distortions. Ultimately, this total amount represents the benefit conferred on the Argentinian producers by the GOA during the investigation period.

(226) In accordance with Article 7(2) of the basic Regulation, the Commission allocated those subsidy amounts over the total turnover of the soybean-based production of the sampled exporting producers during the investigation period as appropriate denominator, because the subsidy granted a benefit to the entire production of soybean-based products and not only to the product concerned or the production destined to exports.

(227) For the period after the investigation period, the GOA adopted Decree 1343/2016

Decree 1343/2016 of the Ministry of Agroindustry, Derecho de exportación. Alícuota — Modificación, 2.1.2017.

which sets the rate of the export tax on soybeans and soybean oil. The rate will be reduced as from 1 January 2018 until 31 December 2019 every month by 0,5 %. As a result, the export tax for soybeans will be reduced to 18 % at the end of 2019.

(228) On 3 September 2018 the GOA adopted Decree 793/2018

Decree 793/2018, Poder Ejecutivo Nacional, Derechos de exportación — Modificación, 3.9.2018.

, setting the rate of the export tax on soybeans at 18 % from that day on, but implementing an additional export tax of ARS 4 per exported USD, whereby the tax is calculated on the FOB value of the exported soybeans expressed in USD. This shows that the GOA can at any time decide to change the level of the export tax.

(229) Events after the Commission's decision not to impose provisional measures in September 2018 further confirm that the GOA is entitled to adjust the export tax system regularly. In particular, the 12 % cap on the overall export tax introduced by Decree in September was already increased to 33 % in the law adopting the budget for 2019, and such a cap can remain in place until the end of 2020

https://www.minhacienda.gob.ar/onp/presupuestos/2019, Proyecto de Ley, Articulo 83.

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(230) The Commission therefore concludes that a benefit will remain to be conferred after the investigation period in accordance with Article 15(1) second sentence of the basic Regulation.

(231) Following disclosure of the information document, the GOA and CARBIO claimed that the benchmark of imported soybeans does not reflect market conditions in Argentina.

(232) The GOA's argument that the import price reflects an alternative market benchmark shows an incorrect interpretation of the facts. In fact, the Commission used as a benchmark the import price of soybeans actually paid by the sampled exporting producers. The Commission considered this price an appropriate benchmark for the specific reason that this price reflected the market conditions in Argentina unaffected by the GOA's measures (as verified when comparing those import prices with international prices). The Commission considered the CIF import price adequate, as this reflected the price at the crushing plant, located at the port.

(233) The Commission acknowledged that the benchmark should respect any comparative advantage of the prevailing country. However, neither the GOA nor CARBIO substantiate or give any evidence to support the allegation that the chosen in-country benchmark does not reflect the market conditions prevailing in Argentina. Consequently, those claims were rejected.

(234) Following final disclosure, the GOA and CARBIO disagreed that the price paid for imported soybeans constituted an appropriate benchmark since it did not reflect the market conditions in Argentina.

(235) The Commission explained extensively in recitals (220) and (232) to (233) why it considered the imported soybeans both representative and purchased on the basis of the prevailing market conditions in Argentina. As the GOA or CARBIO did not provide any supporting evidence for their disagreement with this conclusion, the Commission rejected the claim.

(236) Following the disclosure of the information document, the sampled exporting producers claimed that a benchmark price that is based on the price of the same commodity in a completely different region is unreliable. The Commission noted that the sampled exporting producers only imported soybeans from neighbouring countries. Therefore, that data was the closest proxy to the undistorted price in Argentina absent the GOA's support and the most reliable. Consequently, that claim was rejected.

(237) Following the disclosure of the information document, CARBIO further claimed that because the export tax on soybeans has been reduced from 30 % to 18 % there is no longer a benefit.

(238) The Commission noted that CARBIO's understanding of the level of the export tax is incorrect. Decree 793/2018 set the level of the export at 18 % but also implemented an additional export tax of 12 %, with a cap of 4 ARS per USD exported. Effectively, this means that the export tax was set at around 28 %, compared to 30 % during the investigation period.

(239) The Commission observed that that change took place after the investigation period for subsidisation. Under Article 11(1) of the basic Regulation, information relating to a period subsequent to the investigation period is not, normally, to be taken into account. CARBIO did not provide any compelling reasons why this information should be taken into account.

(240) Furthermore, CARBIO did not provide any evidence for its claim that any allegation of subsidy or benefit due to the existence of the export tax on soybeans is no longer warranted. The Commission concluded that a slight decrease of around 2 % on the export tax of soybeans did not demonstrate that the subsidies no longer confer any benefit on the exporters involved. The Commission considered that any effect of a further reduction or suppression of the export tax on soybeans should be examined in the context of a review, as opposed to the current investigation.

(241) CARBIO furthermore claimed that any alleged benefit conferred to the Argentinian producers by the increase in the tax on soybeans would be offset by the increase in the direct export tax on biodiesel and should therefore, following Article 7(1)(b) of the basic Regulation, be deducted from the amount of the total subsidy calculated.

(242) CARBIO did not provide any justification that the export tax levied on the biodiesel that was exported to the Union was specifically intended to offset the subsidy, as stated in Article 7(1)(b) of the basic Regulation. CARBIO also failed to show how the actual export tax on biodiesel offsets the support conferred by the GOA's measures, including through the export tax on soybeans. Therefore, the Commission rejected that claim.

(243) CARBIO specifically made further comments regarding the changes to the export tax system after the end of the investigation period, including the increase of export tax on biodiesel, and the changes to the export tax on soybeans. The Commission rejected the assertion that these changes made any difference to the Commission's conclusions.

(244) Firstly the export tax on biodiesel imposed after the end of the investigation period has had no obvious effect on the amount of the benefit provided to the biodiesel producers based on the provision of soybeans for less than adequate remuneration.

(245) Secondly there is still an export tax on soybeans, and no evidence has been provided that after the investigation period the price of soybeans in Argentina has increased, thereby theoretically lowering the benefit amount.

(246) Following final disclosure, the GOA stressed that Article 81 of the Budget Law does not increase to 33 % any cap on the overall export tax introduced by Decree 783/2018 in September, as Article 83 established a limit of the export tax rate to 30 % of the taxable value or the official FOB price.

(247) Even if the export tax was limited to 30 %, the Commission's conclusion that a benefit will remain to be conferred after the investigation period, in accordance with Article 15(1) second sentence of the basic Regulation, still stands.

(248) Following the disclosure of the information document, the sampled exporting producers submitted comments regarding the calculation of the benefit provided by the supply of soybeans for less than adequate remuneration. These comments were company specific and mainly referred to clerical errors or further claims for adjustment.

(249) Where a clerical error was found the error was corrected, for example the inclusion of zero-quantity transactions to ensure that the price per kg purchased was correct. However, where a company requested that data that had been verified be changed after their verifications on spot, such a request was denied since the Commission was not in a position to confirm the accuracy of the new unverified data.

(250) Following final disclosure the two exporting producers who had requested that verified data be changed again made the same claim, and this was again rejected for the same reasons as before.

(251) At a hearing following the disclosure of the information document, CARBIO claimed that for calculating the benefit the Commission should reject those purchases of soybeans made from related companies for calculating the purchase price in Argentina. The Commission noted that the purchases of soybeans in Argentina made by the exporting producers during the investigation period were made from both related and unrelated suppliers, and the prices were the same. This is a clear indication that the purchases from related suppliers were made at arm's length. The Commission therefore saw no reason not to use these transactions to calculate the benefit to the biodiesel producer, which was calculated on the basis of monthly averages per kilo of soybeans purchased. Consequently, this claim was rejected.

3.2.2.13.

Specificity

(252) The GOA's set of measures were directed to benefit certain industries, including the domestic biodiesel industry. Indeed, even though the distortions on soybeans also benefit downstream products other than biodiesel, the benefit is available only to certain industries in Argentina, being those in the soya value chain. Moreover, even if the GOA's support granted to biodiesel through several measures is also granted to other biofuels, those measures are limited to a group of enterprises or industries. They are, therefore, specific under Article 4(2)(a) of the basic Regulation.

(253) Following the disclosure of the information document, CARBIO claimed that the measures are not limited to the biodiesel industry and therefore not specific. CARBIO repeated this claim after final disclosure without providing any new evidence. The Commission considered that the inherent characteristics of the good provided, soybeans, limits its possible use to certain enterprises only

Panel Report, United States — Final Countervailing Duty Determination with Respect to Certain Softwood Lumber from Canada, WT/DS257/R and Corr.1, adopted 17 February 2004, as modified by Appellate Body Report WT/DS257/AB/R, para. 7.116. See also Appellate Body Report WT/DS436/AB/R United States — Countervailing Measures on Certain Hot-Rolled Carbon Steel Flat Products from India, 8 December 2014, para. 4398.

. Therefore, the Commission rejected CARBIO's claim that the subsidy is not specific to the biodiesel industry.

3.2.3.

Conclusion

(254) The Commission found that through a set of measures the GOA provided support to the biodiesel industry including through the provision of soybean for less than adequate remuneration. The GOA conferred a benefit to the recipients which is specific, thus amounting to a countervailable subsidy.

(255) Following the disclosure of the information document, CARBIO claimed that the Commission was relying solely on the export tax on soybeans to reach its conclusion of financial contribution and/or income and price support.

(256) The Commission disagreed. Since the initiation of the this investigation, the Commission found there were other tools used by the GOA (in addition to the export tax on soybeans) that would be investigated as part of the GOA's support to the biodiesel industry

See Memorandum on sufficiency of evidence, 30 January 2018, p. 6 (These elements will be examined during the investigation. However, at this stage the Commission considers that there is sufficient evidence tending to indicate the existence of a countervailable subsidy. In particular, the export taxes appear to be one of the tools devised by the GoA to direct soybean and soybean oil producers to provide their inputs to the biodiesel producers. The GoA also appears to provide incentives to input suppliers to maintain their high production artificially to the benefit of biodiesel producers) and p. 14 (Where the complaint does not provide sufficient evidence of a particular subsidy or subsidy programme, the Commission reserves its rights to investigate them in the course of these proceedings in accordance with Article 10(7) of the Basic Regulation).

. As explained before, the Commission considered the export tax as one of the instruments for the provision of soybeans for less than adequate remuneration on the Argentinian domestic market, which constitutes a countervailable subsidy. The other measures taken by the GOA show that the GOA directed the soybean growers to sell their soybeans for an artificially low price to the biodiesel industry and the GOA thus had a clear intention to support the domestic biodiesel industry.

(257) Although the Commission found that some of the other subsidies alleged in the complaint did not constitute a countervailable subsidy during the investigation period (in particular, the Biodiesel Supply Agreement or certain tax exemptions), they formed an integral part of the set of measures pursuing the support of the biodiesel

industry and underlined the existence of income/price support for the biodiesel industry. In other words, the fact that some subsidies were not found to be used by the sampled exporting producers during the period of investigation does not deny the existence of the GOA's set of measures to support the domestic biodiesel industry.

(258) The Commission examined the totality of the evidence available in this investigation to support its findings. As the Appellate Body acknowledged in US — Countervailing Duty Investigation on DRAMS, individual pieces of circumstantial evidence are unlikely to establish entrustment or direction; the significance of individual pieces of evidence may become clear only when viewed together with other evidence

Appellate Body Report, US — DRAMs, para. 154.

.

(259) Therefore, the Commission assessed not only the export tax on soybeans but a set of GOA's measures supporting the biodiesel industry and in that process the Commission put all evidence, direct and circumstantial, together to come to the determination that, on the basis of the totality of evidence, there was entrustment or direction of private bodies and/or income/price support.

3.2.4.

Calculation of the subsidy amount

(260) The subsidy rate established with regard to this set of measures during the investigation period for the sampled exporting producers amounts to:

Table 3

The GOA's support to the biodiesel industry

Company/groupSubsidy rateLDC Argentina SA26,14 %Group Renova25,05 %Group T633,15 %

3.3.

Government mandated purchase of domestic biodiesel for more than adequate remuneration and/or income or price support (Biodiesel Supply Agreement)

3.3.1.

Introduction

(261) The complainant alleges that the GOA has concluded Biodiesel Supply Agreements (Agreements) with biodiesel producers in Argentina, under Chapter II of the Biofuels Law of 2006 (law 26.093 of 2006)

Law 26.093 of 12 May 2006. Régimen de Regulación y Promoción para la Producción y Uso Sustentables de Biocombustibles. Autoridad de aplicación. Funciones. Comisión Nacional Asesora. Habilitación de plantas productoras. Mezclado de Biocombustibles con Combustibles Fósiles. Sujetos beneficiarios del Régimen Promocional. Infracciones y sanciones.

. Those Agreements were designed to provide biodiesel to the domestic market given the blending mandate in force during the period since 2010. This mandate requires blending companies to purchase biodiesel and blend it with mineral diesel before sale.

(262) The GOA established individual and collective quotas for biodiesel to supply the domestic market, and the complainant alleges that parties to the Agreements include sampled exporting producers such as LDC, Vicentin and Renova.

(263) The Agreements establish that producers with quotas are obliged to supply biodiesel to the blending companies at a price set by the GOA, at a level that deliberately ensures that the cost of production of the producers are covered, plus profit.

(264) Based on the fixing of an artificially high price and quantity to be provided by the producers to the blending companies, the complainant alleges that this is a countervailable subsidy.

3.3.2.

Findings of the investigation

(265) During its investigation the Commission found that no Biodiesel Supply Agreement had been signed since calendar year 2015. This 2015 Agreement had not been extended and was no longer in force.

(266) However, under law 26.093 of 2006 the Ministry of Energy and Mining, as the Enforcement Authority of the blending mandate regime in force, has continued to allocate quotas and has continued to set the price at which the blending companies have to purchase biodiesel. This has been done de facto in the absence of a Biodiesel Supply Agreement.

(267) During the investigation period, the Ministry of Energy and Mining allocated quotas, on the basis of estimated demand, to companies in Argentina with a capacity of up to 50000 metric tonnes of biodiesel per year.

(268) None of the sampled exporting producers received a quota during the investigation period.

3.3.3.

Conclusion

(269) Given that none of the sampled exporting producers received a quota during the investigation period, none of these companies sold biodiesel on the domestic market through the quota system in force during the investigation period. In addition, no Biodiesel Supply Agreement was in force during the investigation period with respect to the exporting producers. Therefore, there was no benefit from any quota system received by the sampled exporting producers during the investigation period.

3.4.

Provision of loans and export financing on preferential terms and preferential lending

3.4.1.

Introduction

(270) The complainant asserted that the Banco de la Nación Argentina (BNA) is one of the country's largest banks and is entirely state-owned. It noted that the GOA effectively manages the BNA on a day-to-day basis through its authority to appoint all members of the board.

(271) The complainant alleged that the BNA lends money to micro, small and medium enterprises for investment and working capital, and that these loans were made at preferential rates.

3.4.2.

Findings of the investigation

(272) During the verification visit to the GOA, the Commission requested details of all loans provided by the BNA and other publicly owned banks, together with the terms of the loans and the interest rate charged.

(273) The loans granted to the sampled companies were examined and compared to the loans provided by privately owned banks, to see whether any lending was made at preferential terms. This was examined in terms of interest rates and also loan conditions.

(274) No evidence was found of any preferential lending to the sampled exporting producers during the period of investigation.

3.4.3.

Conclusion

(275) The Commission concluded that no preferential lending was provided to the sampled exporting producers during the investigation period.

3.5.

Government revenue forgone or not collected under the Biofuels Law of 2006

3.5.1.

Introduction

(276) The complainant alleged that Article 15 of the 2006 Biofuels Law

BIOCOMBUSTIBLES Ley 26.093 Régimen de Regulación y Promoción para la Producción y Uso Sustentables de Biocombustibles. Autoridad de aplicación. Funciones. Comisión Nacional Asesora. Habilitación de plantas productoras. Mezclado de Biocombustibles con Combustibles Fósiles. Sujetos beneficiarios del Régimen Promocional. Infracciones y sanciones.

provides for the possibility for biofuel producers to reduce the tax base on which the minimum presumed income tax is calculated. The complainant also alleged that Article 15.1 of the same law authorises accelerated depreciation for capital goods.

3.5.2.

Findings of the investigation

(277) The investigation found that none of the sampled exporting producers benefited from the promotional benefits set out in Article 15 of the Biofuels Law during the investigation period.

3.5.3.

Conclusion

(278) That measure was not used during the investigation period by the sampled exporting producers and thus the Commission concluded it did not need to be countervailed.

3.6.

Provincial tax exemptions provided by the Province of Cordoba

3.6.1.

Legal basis

(279) The complainant alleged that the Province of Cordoba provided provincial tax exemptions to the biodiesel industry under Provincial Act 9397

Ley no 9397 Adhesion de la provincial a ley nacional no 26.093, y declaracion de interes public de la promocion de la produccion, procesamiento y uso sustentable de biocombustibles.

, passed in 2007. The Act provides that projects approved by the Enforcement Authority for the production, development and sustainable use of biofuels will be exempt for 15 years from payment of taxes.

3.6.2.

Findings of the investigation

(280) The investigation found that the tax exemptions were available to biofuel producers located in the province of Cordoba. Provincial Act 9397 provides under Sections 5 and 6 for exemptions from provincial taxes for projects for the production, development and sustainable use of biofuels. The Commission did not find any evidence, and interested parties did not allege either, that the tax benefits provided through Provincial Act 9397 specifically to the biodiesel industry is part of a broader scheme of tax benefits widely available in the province of Cordoba.

3.6.3.

Conclusion

(281) Companies producing biodiesel located in the province of Cordoba benefit from tax exemptions for 15 years from income tax, stamp duty, real estate tax, fund for the financing of the education system tax and fund for the financing of works of infrastructure tax. Those tax exemptions are intended to benefit domestic companies producing biodiesel, as set out in the Provincial Act 9397. Although one exporting producer within the sample was located in the province of Cordoba, it was not producing biodiesel in that province. The other sampled exporting producers were not located in that province. Therefore, the Commission concluded that that tax exemption was not used by the sampled exporting producers during the investigation period.

3.7.

Provincial tax exemptions provided by the Province of Buenos Aires

3.7.1.

Legal basis

(282) The complainant alleged that the province of Buenos Aires established a provincial Law 13.719 which adheres to the 2006 Biofuels Law, to exempt beneficiaries from the payment of taxes if they are qualified and registered as biofuels producers under the 2006 Law.

3.7.2.

Findings of the investigation

(283) The investigation found that the tax exemptions were available to biofuel producers located in the province of Buenos Aires. However, none of the sampled exporting producers of biodiesel were located in the province.

3.7.3.

Conclusion

(284) The Commission found that none of the sampled exporting producers benefited from the tax exemptions set out in the Provincial Law 13.719 during the period of investigation.

3.8.

Province of Santiago del Estero System of Promotion and Industrial Development (PSPID) — Provincial Law No 6.750

3.8.1.

Legal basis

(285) The complainant alleged that industries in the province of Santiago del Estero could benefit from various tax advantages and exemptions under the framework of Provincial Law 6.750, passed in 2005.

3.8.2.

Findings of the investigation

(286) None of the sampled exporting producers were located in that province.

3.8.3.

Conclusion

(287) The Commission found that none of the sampled exporting producers benefited from the measures set out in the Provincial Law 6.750 during the period of investigation.

3.9.

Agreement on municipal taxes between Louis Dreyfus Argentina and the Municipality of General Lagos

3.9.1.

Introduction

(288) The complainant alleged that there is an agreement on municipal taxes between the exporting producer Louis Dreyfus Argentina and the municipality of General Lagos. The agreement was published as Municipal Ordinance 26/2016

Ordenanza 26/2016, General Lagos, 16 June 2016.

. That agreement provides that Louis Dreyfus Argentina pays a monthly lump sum to the municipality of General Lagos, rather than pay a percentage (0,5 %) of its gross revenue.

3.9.2.

Findings of the investigation

(289) The investigation found that the agreement was still in force during the investigation period

3.11.3.

Conclusion

(297) Companies producing biodiesel located in the province of Santa Fe benefit from tax exemptions for 15 years from income tax, stamp duty, real estate tax and vehicle duties. That tax exemption concerns domestic companies producing biodiesel, as set out in the Provincial law 12.692. The tax exemption is therefore a subsidy due to the revenue foregone by the GOA, and de jure specific to certain industries, including the domestic biodiesel industry. It is therefore a benefit from a countervailable subsidy.

3.11.4.

Calculation of the subsidy amount

(298) The amount of countervailable subsidy was calculated in terms of the benefit conferred on the recipients during the investigation period. This benefit was calculated as the difference between the total tax payable according to the normal tax rate and the total tax actually paid during the investigation period by the sampled exporting producers.

(299) Following the disclosure of the information document and the accompanying calculations to the sampled exporting producers as well as following final disclosure, two of the companies claimed that the allocation base should be different (over the total turnover of soybean based products or over the turnover of all industrial activities in the Province of Santa Fe). As the companies only received the tax exemption because of their biodiesel production, the Commission considered this exemption specific to the production to biodiesel and, therefore, concluded that this exemption should only be allocated to the turnover of biodiesel and not to the total turnover of the company. Consequently, that claim was rejected.

Table 4

Provincial revenue foregone under Santa Fe Provincial laws

Company/groupSubsidy rateLDC Argentina SA0,06 %Group Renova2,15 %Group T60,28 %

3.12.

Conclusion on subsidisation

(300) The Commission calculated the amount of countervailable subsidies in accordance with the provisions of the basic Regulation for the sampled exporting producers by examining each subsidy or subsidy programme, and added these figures together to calculate a total amount of subsidisation for each exporting producer for the investigation period. To calculate the overall subsidisation, the Commission first calculated the percentage subsidisation, being the subsidy amount as a percentage of the company's total turnover. This percentage was then used to calculate the subsidy allocated to exports of the product concerned to the Union during the investigation period. The subsidy amount per tonne of product concerned exported to the Union during the investigation period was then calculated, and the margins below calculated as a percentage of the Costs, Insurance and Freight (CIF) value of the same exports per tonne.

(301) In accordance with Article 15(3) of the basic Regulation, the total subsidy amount for the cooperating companies not included in the sample was calculated on the basis of the total weighted average amount of countervailing subsidies established for the cooperating exporting producers in the sample with the exclusion of negligible amounts as well as the amount of subsidies established for items which are subject to the provisions of Article 28(1) of the basic Regulation.

(302) However, the Commission did not disregard findings related to the GOA's support to biodiesel industry, even if it had to rely partially on facts available to determine the existence of subsidisation.

(303) Indeed, the Commission considered that the facts available and used in those cases did not substantially affect the information needed to determine the amount of subsidisation in a fair manner, since the Commission used the import data provided by the sampled exporting producers. Exporters who were not asked to cooperate in the investigation will not be prejudiced by using this approach

See also, mutatis mutandi, WT/DS294/AB/RW, US — Zeroing (Article 21.5 DSU), Appellate Body Report of 14 May 2009, paragraph 453.

.

(304) Given the high rate of cooperation of Argentinian exporting producers, the amount for all other companies was set at the level of the highest amount established for the sampled companies. The all other companies amount will be applied to those companies which did not cooperate in the investigation.

(305) Following final disclosure, all exporting producers claimed that the Commission should calculate the subsidy amounts by taking into account the export tax on biodiesel as an offset to the benefit received from the export tax on soybeans. This was rejected by the Commission as there was no evidence that the GOA imposed an export tax on biodiesel to offset the benefit received from the soybeans provided for less than adequate remuneration.

(306) The same exporting companies also requested an adjustment for anti-dumping duties. The Commission considered that there was no legal basis for granting this adjustment, as there is no evidence that anti-dumping duties can offset subsidies granted upon exporting producers. In any event, this claim was rejected because no anti-dumping duties were actually paid by the exporting producers during the IP.

Table 5

Amount of countervailable subsidies

Company/groupAmount of countervailable subsidiesLDC Argentina SA26,2 %Group Renova27,2 %Group T633,4 %Other cooperating companies28,2 %All other companies33,4 %

1. INJURY

4.1.

Definition of the Union industry and Union biodiesel production

(307) During the investigation period, 54 producers in the Union that were members of the EBB and a further 196 known non-member producers manufactured the like product. All these producers constitute the Union industry within the meaning of Article 9(1) of the basic Regulation.

(308) As indicated in recital (19), the Commission provisionally selected three Union producers in the sample representing 19 % of the total Union production of the like product.

(309) As referred to in recital (20), the Commission received a number of comments on the provisional sample. The provisional sample consisted of the three proposed Union producers: Bioagra-Oil SA (Poland), Masol Iberia Biofuel, S.L.U. (Spain) and Saipol (France).

(310) CARBIO indicated that all three proposed Union producers are unsuitable for inclusion in the sample. CARBIO mentioned, inter alia, that Saipol almost exclusively uses rapeseed from France, whereas for maximum efficiency the company should blend various types of feedstock.

(311) CARBIO further indicated that Masol uses predominantly palm oil at transfer prices from its Indonesian parent company.

(312) With regard to Bioagra-Oil, CARBIO referred to the limited choice of raw material this company has, due to the specific national implementation of the Renewable Energy Directive in Poland.

(313) CARBIO also suggested ADM Hamburg AG or Verbio as representative companies for the sample of Union producers. CARBIO further noted with regard to Verbio that this company is a pure biodiesel producer (without a vertically integrated crushing business) and that it is located at the German-Polish border, servicing the broader eastern European market, including the part of the Polish market which is not subject to the earlier mentioned legislation.

(314) The complainant explained that neither Saipol, nor Masol use any type of feedstock exclusively. The investigation confirmed that indeed both companies, Saipol and Masol, use more than one feedstock in their production.

(315) On the basis of the comments received, the Commission decided to maintain Saipol and Masol Iberia Biofuel in the sample. Due to the fact that the Commission did not receive a rebuttal of the allegation contained in recital (312) that Bioagra oil has a limited choice of raw materials, the Commission decided to replace it in the sample of Union producers by Verbio Vereinigte BioEnergie AG (Germany).

(316) The Commission established the total Union production of biodiesel during the investigation period at around 13 million tonnes.

Table 6

Union biodiesel production (tonnes)

Source: EBB.

201420152016Investigation periodTotal Union production11353223117898961195886213071053Index100104105115

(317) The total Union biodiesel production figures presented in Table 6 is based on data received from the EBB. The EBB compiles data concerning production that it receives from its members, which account for around 70 % of the biodiesel production in the Union. With regard to non-member producers accounting for around 30 % of the biodiesel production in the Union, it gathers the information concerning production from the relevant national industry associations and from other publicly available sources. The methodology and correctness of the data gathered by the EBB was subject to a verification visit under Article 26 of the basic Regulation carried out at the premises of the EBB. The Commission did not receive comments from interested parties with regard to that data.

(318) The total Union biodiesel production gradually increased by 5 % between 2014 and 2016. A more significant increase in production can be noted during the investigation period, where production increased by another 10 percentage points. The Union production in the investigation period did not increase at the same rate as Union consumption because of subsidised imports from Argentina that started entering the Union market at the end of the investigation period.

4.2.

Union biodiesel consumption

(319) The Commission established the Union consumption of biodiesel based on the information submitted by the EBB and import and export statistics.

(320) Union consumption developed as follows:

Table 7

Union biodiesel consumption (tonnes)

Source: EBB, EU import statistics.

201420152016Investigation periodTotal Union consumption11907151117919531143546814202127Index1009996119

(321) The Commission established the Union consumption by adding imports of biodiesel into the Union to the sales of the Union industry on the Union market. The Union's biodiesel consumption slightly decreased by 4 % until 2016. It increased in the investigation period by 19 % as compared with 2014. The consumption of biodiesel depends on two major factors, the consumption of diesel fuel and the content of biodiesel in this fuel.

(322) Following final disclosure, CARBIO noted the revision of methodology of calculating the Union biodiesel consumption, and in this regard suggested that the reason for this change was the unreliable production data of the Union industry.

(323) The Commission changed the methodology of calculating the consumption in order to limit the complexity of this calculation, and to eliminate the need to include the level of Union exports in this calculation. The level of production data of the Union industry remained unchanged. As explained in recital (358), the Commission verified the methodology of collecting data by the EBB, including the production data, and found it reliable.

(324) Compared to fossil-based fuel, biodiesel produces less air pollutants such as particulates, carbon monoxide, sulphur dioxide, hydrocarbons, and air toxins, but may produce more nitrogen oxide. In addition, the plants used as feedstock for production of biodiesel (soy, oil palms, rapeseed, etc.) offset future CO2 emissions by absorbing CO2 when growing.

(325) The steadily increasing demand and the Union production results from the energy policy of the Union. The Renewable Energy Directive 2009/28/EC

Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC (OJ L 140, 5.6.2009, p. 16.)

establishes that each Member State shall ensure that the share of energy from renewable sources in all forms of transport in 2020 is at least 10 % of the final consumption of energy in transport in that Member State.

(326) That policy means that Member States of the Union need to set as a target that biofuels represent 10 % of all transport fuel sales by 2020. The implementation, current levels and methodology of calculating the biofuel content is not uniform throughout all Member States of the Union, but the progressively increasing mandate results in some 5 % to 7 % of biodiesel content being mixed into conventional fossil diesel fuel already now.

(327) The fact that more biodiesel is being mixed into conventional fossil diesel fuel is an important element in the analysis of biodiesel market trends in the Union. The cost of production and prices of biodiesel are generally higher than the cost of production and prices of fossil-based diesel. It is therefore only due to the Renewable Energy Directive 2009/28/EC that producers of fuels (refineries) purchase biodiesel to mix it with fossil-based fuel.

(328) The consumption of biodiesel is directly linked to mandates in Member States to mix certain levels of biodiesel in fossil fuels. The consumption of biodiesel is set to increase as and when more Member States reach the targets set by Renewable Energy Directive 2009/28/EC to be implemented by 2020. Other factors, such as the increase in the use of means of transportation using diesel engines, also have an impact on the consumption of biodiesel.

4.3.

Imports from the country concerned

4.3.1.

Volume and market share of the imports from the country concerned

(329) The Commission established the volume of biodiesel imports based on Union import statistics from the Surveillance 2 database

Database of specific products under surveillance or monitoring imported into the Union customs territory in the present and past years, maintained by the Directorate-General for Taxation and Customs Union.

. The Commission established the market share of the imports on the basis of the Union biodiesel consumption established in Table 7.

(330) Biodiesel imports into the Union from the country concerned developed as follows:

Table 8

Import volume (tonnes) and market share

Source: EU Import statistics based on Surveillance 2 database, EBB.

201420152016Investigation periodVolume of imports from Argentina (tonnes)0313400394005Market share0 %0,3 %0 %2,8 %

(331) Because of the anti-dumping duties concerning imports, inter alia, from Argentina, imposed on 26 November 2013 by Regulation (EU) No 1194/2013

Council Implementing Regulation (EU) No 1194/2013 of 19 November 2013 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of biodiesel originating in Argentina and Indonesia (OJ L 315, 26.11.2013, p. 2).

there were no or negligible imports from Argentina to the Union between 2014 and August 2017. The negligible imports from Argentina in 2015 comprised of four separate import transactions that were reported in Spain, and, therefore, the Commission does not consider them as representative.

(332) In September 2017, those anti-dumping duties applicable to imports of biodiesel from Argentina were significantly reduced by Regulation (EU) 2017/1578

Commission Implementing Regulation (EU) 2017/1578 of 18 September 2017 amending Implementing Regulation (EU) No 1194/2013 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of biodiesel originating in Argentina and Indonesia (OJ L 239, 19.9.2017, p. 9).

of 18 September 2017 and as a result, imports from Argentina started to increase rapidly and significantly, to reach a 2,8 % market share in the investigation period.

(333) Biodiesel imports per month to the Union from Argentina during the second half of 2017 developed as follows:

Table 9

Import volume (tonnes) per month

Source: EU Import statistics based on Surveillance 2 database.

7/20178/20179/201710/201711/201712/2017Volume of imports from Argentina (tonnes)002997557526188986117518

(334) There were no imports from Argentina between January and August 2017. The monthly import statistics in Table 9 show the rapid and significant increase of biodiesel imports following the reduction of the anti-dumping duties applicable to imports of biodiesel from Argentina.

(335) Biodiesel imports per month to the Union from Argentina, during the period following the investigation period, in the first eight months of 2018 developed as follows:

Table 10

Import volume (thousand tonnes) per month

Source: EU Import statistics based on Surveillance 2 database.

2018JanFebMarAprMayJunJulAugVolume of imports from Argentina ('000 tonnes)17316113130119161141177

(336) Imports of biodiesel from Argentina continued in 2018. The exported biodiesel arrives to the Union market in large single shipments, normally a full vessel. It is therefore less meaningful to analyse the monthly level of imports.

(337) The level of imports did not slow down in the first 8 months of 2018. To the contrary, the estimated market share of Argentinian imports to the Union, presuming that the Union consumption remained unchanged, amounts to 11,5 % during the first 8 months of 2018. This shows that both the estimated market share and the average monthly import levels increased.

(338) It is also important to note that there was no reduction of import levels from Argentina following registration of imports as of 25 May 2018 onwards. In fact, August 2018 was the month with the second highest level of imports from Argentina for the entire period considered.

4.3.2.

Prices of imports from the country concerned and price undercutting

(339) As indicated in recital (334), imports into the Union from Argentina started only towards the end of the investigation period, and there were no imports or only negligible imports in the years 2014-2016. The evolution of prices in the period considered, for 2015 and the investigation period is shown in Table 11 as follows.

Table 11

Import price

Source: EU Import statistics based on Surveillance 2 database.

201420152016Investigation periodJanuary-August 2018Import prices from Argentina (EUR per tonne)—633—636613

(340) During the period following the investigation period, the weighted average price of biodiesel imported from Argentina, for the volumes imported as described in recital (335), decreased to 613 EUR per tonne. Consequently, after the investigation period the average import price decreased by 3,6 % in comparison with the import price during the investigation period.

(341) The Commission determined the price undercutting during the investigation period by comparing:

the weighted average sales prices per product type of the sampled Union producers charged to unrelated customers on the Union market, adjusted to an ex-works level, and

the corresponding weighted average prices per product type of the imports from the sampled Argentinian producers to the first independent customer on the Union market, established on a CIF basis, with appropriate adjustments for importation costs.

(342) Following the disclosure of the information document, a clerical error in the currency conversion of the CIF values into EUR was corrected for Group T6, leading to a decrease of the CIF value in EUR for Group T6.

(343) Following the disclosure of the information document the Commission received comments from the GOA, CARBIO, and the unrelated importer Gunvor with regard to the adjustments made to the CIF price of the imports from the sampled Argentinian producers to the first independent customer on the Union market.

(344) The GOA, CARBIO and the unrelated importer Gunvor stated that the export price of biodiesel from Argentina should be increased by conventional customs duties of 6,5 %. In addition, CARBIO and the unrelated importer Gunvor claimed that the export price of biodiesel from Argentina should be increased also by the anti-dumping measures ranging from 6,5 % to 8,1 % during the period of September 2017 to December 2017, that is for the four months during the investigation period when imports from Argentina started.

(345) Following final disclosure, the GOA commented that the price undercutting calculation conducted by the Commission should include the anti-dumping duties. CARBIO submitted the same comment concerning inclusion of the anti-dumping duties at the earlier stage of the proceeding and reiterated it following final disclosure. The exporting producers also commented in this regard, claiming that the anti-dumping duties should be added.

(346) The Commission accepted the claim with regard to the conventional customs duties to be added to the CIF price and has changed its calculations accordingly.

(347) The Commission rejected the claim with regard to the anti-dumping duties to be added to the CIF price, finding the request in this regard unjustified. In the case at hand, the Commission considered that it is more appropriate to analyse the behaviour of the exporting producers absent the anti-dumping duties since, in the context of a threat of injury analysis, it has to analyse the future impact of the import prices on the Union industry, in accordance with Article 8(8)(d) of the basic Regulation. In addition, the measures imposing the anti-dumping duties were terminated on 18 October 2018

Commission Implementing Regulation (EU) 2018/1570 of 18 October 2018 terminating the proceedings concerning imports of biodiesel originating in Argentina and Indonesia and repealing Implementing Regulation (EU) No 1194/2013 (OJ L 262, 19.10.2018, p. 40).

. Consequently, the anti-dumping duties will no longer have an effect on the import prices in the future and the anti-dumping duties already collected will have to be repaid or remitted with retroactive effect.

(348) Following the disclosure of the information document, CARBIO commented that the Commission claims that since only one unrelated importer cooperated in the current investigation, the importation costs used in the 2013 anti-dumping investigation should also be used in this case. CARBIO further claimed that the Commission did not specify why it rejected the importation costs submitted by the unrelated importer in question. Gunvor also claimed that the actual importation cost submitted by it should be used. CARBIO reiterated this claim in the comments following final disclosure.

(349) The Commission confirmed that for the methodology explained in recital (341) the reference used for adding the importation costs was the importation costs used in the investigation resulting in the anti-dumping duties imposed by Regulation (EU) No 1194/2013

The importation costs were expressed in EUR. Given the very low inflation level (the Harmonised Index of Consumer Prices published by Eurostat increased by a total of 4 % between 2012 and the investigation period) importation costs did not have to be updated.

. The reason for using those costs was that the only unrelated importer cooperating in the current investigation requested its data to remain confidential. In addition, the importation costs used in the previous investigation contained differentiated specific categories of importation costs and their quantification. This information was not available from the cooperating unrelated importer in the current investigation. No interested party provided any evidence showing any relevant differences between the importation costs of the product concerned used in 2013 and the importation costs incurred during the period of investigation. Moreover, the importation costs were expressed in EUR in 2013. Since the ARS exchange rate declined around 8 times since 2012, and inflation in the Eurozone since 2013 was very low (around 5 % in total over the last 6 years), the Commission considered it appropriate to use the importation costs provided in the previous investigation.

(350) Following the disclosure of the information document, the Commission corrected a clerical error with regard to the calculation of the CIF value of the sampled exporting producers.

(351) As a result, the Commission made price comparisons on a type-by-type basis for transactions at the same level of trade, duly adjusted where necessary, and after deduction of rebates and discounts.

(352) The comparison on a type-by-type basis focused on a comparison of the CFPP, irrespective of the feedstock used. Another characteristic that the Commission took into account was whether a product was subject to double-counting in most Member States. Double-counting allows the refinery to calculate the content of a specific type of biodiesel in a diesel fuel it produces twice (e.g. a 3 % content of double counting biodiesel would be considered equivalent to a 6 % content). For Germany, where a different way of calculating the efficiency of CO2 emission reduction is in place, the Commission also took into account this specificity of the German market.

(353) The Commission established that in most cases the final customer purchasing biodiesel is not aware of, nor concerned by, the feedstock that was used in the production, but requires a product that fulfils a certain maximum CFPP level. This level would vary depending on the season and climatic conditions. During summer months and in warmer regions, customers accept higher CFPP levels, and require lower CFPP level biodiesel during winter months and in colder regions.

(354) The Commission expressed the result of the comparison as a percentage of the sampled Union producers' turnover during the investigation period. It showed a weighted average undercutting margin by the imports of sampled exporters from the country concerned on the Union market of between 9,5 % and 15,2 %.

4.4.

Economic situation of the Union industry

4.4.1.

General remarks

(355) In accordance with Article 8(5) of the basic Regulation, the examination of the impact of the subsidised imports on the Union industry included an evaluation of all economic indicators having a bearing on the state of the Union industry during the period considered.

(356) As mentioned in recital (19), sampling was used for the determination of the threat of injury and the negative impact on the level of the sales prices, quantities sold, market share and profits of the Union industry.

(357) For the injury determination, the Commission distinguished between macroeconomic and microeconomic injury indicators. The Commission evaluated the macroeconomic indicators on the basis of data contained in the questionnaire replies from the sampled Union producers and on the basis of the information provided by the EBB.

(358) The Commission verified the methodology of collection of data submitted by the EBB and that the information was supported by adequate documentation and research procedures.

(359) Both sets of data were found to be representative of the economic situation of the Union industry.

(360) The macroeconomic indicators are: production, production capacity, capacity utilisation, sales volume, market share, growth, employment, productivity, magnitude of the amount of subsidisation, and recovery from past subsidisation or dumping.

(361) The microeconomic indicators are: average unit prices, unit cost, labour costs, inventories, profitability, cash flow, investments, return on investments, and ability to raise capital.

(362) Following the disclosure of the information document the Commission sent two additional sets of questions concerning the period following the investigation period. One set of questions was sent to the three sampled companies and another set to the EBB. The Commission analysed the replies provided by all parties concerned. The Commission used the information received for its findings concerning the period following the investigation period.

4.4.2.

Macroeconomic indicators

4.4.2.1.

Production, production capacity and capacity utilisation

(363) The total Union production, production capacity and capacity utilisation developed over the period considered as follows:

Table 12

Production capacity and capacity utilisation

Source: EBB.

201420152016Investigation periodProduction capacity (tonnes)15074688160098781656181416594853Index100106110110Capacity utilisation75 %74 %72 %79 %Index1009896105

(364) The production capacity steadily increased by 10 % throughout the period considered, to take account of the growing demand.

(365) Similarly, as in the case of the information on production, the EBB compiles data concerning capacity from its members, including national associations, and with regard to non-members, it gathers the information concerning capacity from other publicly available sources.

(366) The production capacity figures do not include a significant part of capacity that is considered idle. The EBB explained that a number of installed biodiesel plants have not been operational for several years and should be considered as long-term-out-of-production. These plants, although nominally installed, would only be able to restart the production after investment in technical adaptation and after a significant period.

(367) Capacity utilisation of the Union industry increased by 5 % (or 4 percentage points) from 75 % to 79 % in the period considered. The industry achieved the highest level of capacity utilisation during the investigation period.

4.4.2.2.

Sales volume and market share

(368) The Union industry's sales volume and market share developed over the period considered as follows:

Table 13

Sales volume and market share

Source: EBB, import and export statistics.

201420152016Investigation periodSales volume on the Union market (tonnes)11363729113051171092066513004462Index1009996114Market share95,4 %95,9 %95,5 %91,6 %

(369) The Union industry's sales decreased by 4 % between 2014 and 2016, and then increased in the investigation period by 18 percentage points, i.e. 14 % higher than in 2014.

(370) The factors driving the sales are the same factors driving consumption, which are described in recitals (324) to (328). Imports did not affect the sales level to a significant extent in the years 2014-2016, which was a reason for the stable levels of both sales and market share.

(371) It was the reduction of duties from Argentina in 2017 that changed the picture of the market. Despite of the fact that imports started only towards the end of the year, the Union industry has lost 3,8 percentage points of market share compared to 2014. As explained in recital (333) this significant decrease of market share coincides with the imports of the product concerned entering the Union market in the last four months of the investigation period.

(372) Following the disclosure of the information document CARBIO submitted a comment with regard to the market share of the Union industry established for the years 2015 to 2016, indicating that although there were no imports from Argentina, the Union industry was losing market share in that period.

(373) The Commission verified the subject data and identified an error in calculating the Union consumption in the information document, which led to incorrect market shares of the Union industry. This error was corrected, and Tables 7 and 13 contain the corrected figures.

(374) As a result of that correction, the Union market share in years 2015 to 2016 remained stable and decreased only during the investigation period due to increased volumes of Argentinian imports.

4.4.2.3.

Growth

(375) While the Union consumption grew by 19 % during the period considered, the sales and production of the Union industry increased by only 14 % and 15 % respectively. The Union industry was therefore not fully able to benefit from the market growth during the period considered, since a significant part of this growth was absorbed by increasing quantities of subsidised Argentinian imports during the investigation period.

4.4.2.4.

Employment and productivity

(376) Employment and productivity developed over the period considered as follows:

Table 14

Employment and productivity

Source: EBB.

201420152016Investigation periodNumber of employees2406276327622733Index100115115114Productivity (tonne/employee)4718426743294782Index1009092101

(377) Employment in the Union developed differently to trends in production, sales and consumption. The relatively high increase of the employment happened in 2015, when it grew by 15 % year-to-year. Since then, it remained at a stable level, including the investigation period.

(378) The increase of 2015 should be regarded as a reaction of the Union industry to an improving condition of the biodiesel market and expectation of future improvement. At the same time, the small decrease of employment in the investigation period does not yet represent the reaction to the increased imports from Argentina. The Union industry did not yet reduce capacity during the investigation period, and therefore employment remained stable.

4.4.2.5.

Magnitude of the amount of the countervailable subsidies and recovery from past subsidisation or dumping

(379) The impact of the subsidised imports from the country concerned on the Union industry was substantial, given the significant volumes and low prices of these imports.

(380) On 26 November 2013 the Union imposed definitive anti-dumping duties on imports of biodiesel from, inter alia, Argentina. The duties were based on the injury elimination level ranging between 22 % and 25,7 %.

(381) As stated in recital (332), those anti-dumping duties were significantly reduced in September 2017 and as a result, biodiesel imports from Argentina started to notably increase. As noted in recital (330) the estimated market share of Argentinian biodiesel imports in the Union reached 2,8 % in the investigation period. The estimated market share of Argentinian biodiesel imports in the Union for the last quarter of 2017 is above 10 %. Imports of biodiesel from Argentina into the Union continued to increase after the investigation period, and in spite of the registration of imports, the estimated market share of Argentinian imports in the Union for the first half of 2018 remained at above 10 %.

(382) Import statistics for the period following the investigation period referred to in detail in recital (335) shows that level of imports until August 2018 continued, and even further increased, in spite of the registration of imports as of 18 May 2018.

(383) The significant and rapid increase of biodiesel imports from Argentina into the Union started in September 2017 and imports continued in spite of the registration of imports. As a consequence of their low prices significantly undercutting the Union industry's prices, the Union industry lost market share and was not able to fully benefit from the market growth.

4.4.3.

Microeconomic indicators

4.4.3.1.

Prices and factors affecting prices

(384) The weighted average unit sales prices of the sampled Union producers to unrelated customers in the Union developed over the period considered as follows:

Table 15

Sales prices in the Union

Source: Sampled Union producers.

201420152016Investigation periodAverage unit sales price in the Union on the total market (EUR/tonne)817715765832Index1008794102Unit cost of production (EUR/tonne)797728767827Index1009196104

(385) The weighted average unit sales price of the sampled Union producers to unrelated customers decreased significantly in 2015 by 13 %. Prices subsequently increased in 2016 and the investigation period to reach a level 2 % above that of 2014.

(386) The unit cost of production of the sampled Union producers followed the trend of prices, and decreased in 2015 by 9 %. The unit cost increased in 2016 and the investigation period to reach a level 4 % above that of 2014. This followed the price evolution of the main raw material, rapeseed, that increased by 8 % between 2014 and the investigation period

European Commission, Directorate-General for Agriculture and Rural Development, Market-Observatory: https://ec.europa.eu/agriculture/market-observatory/crops_en, accessed on 27 November 2018, rapeseed — EU Rouen (EUR/t).

.

(387) The average unit sales price and unit cost concern the sampled Union producers, but are not directly comparable. This is because prices concern only sales to unrelated customers in the Union, while costs are for the total production.

(388) The evolution of the price of biodiesel is linked to the market price evolution of the feedstock, which is either the agricultural produce or the oil. The cost of feedstock constitutes the main cost factor and extensively determines the total cost of production, and as a result, the market sales price.

(389) Following the disclosure of the information document the Commission received comments from the GOA concerning the weighted average unit sales price of the sampled Union producers to unrelated customers. The GOA stated that this price decreased significantly in 2015 by 13 % and that the Commission had not made any analysis in order to dissociate other causes of possible injury, even though it was irrefutable that Argentinian imports during 2015 represented only a 0,5 % market share.

(390) The Commission noted that, as explained in recital (388), the evolution of the price of biodiesel is linked to the market price evolution of the feedstock. Indeed, the international price of rapeseed oil decreased by 14,5 % between 2014 and 2015

Source: World Bank, International prices of imported raw materials — Rapeseed Oil

. This corresponds to the 13 % decrease of the weighted average unit sales price of sampled Union producers indicted by the GOA and, at the same time, confirms the statement that the cost of feedstock determines the market sales prices.

4.4.3.2.

Labour costs

(391) The average labour costs of the sampled Union producers developed over the period considered as follows:

Table 16

Average labour costs per employee

Source: Sampled Union producers.

201420152016Investigation periodAverage labour costs per employee (EUR)66530715736523765874Index1001089899

(392) The average labour costs were stable, with the exception of 2015 when they were higher than in the other years. This was the year when the Union industry started significantly increasing the level of employment. As can be observed, in the following periods, 2016 and the investigation period, where the steady increase of employment was happening throughout the full year, the average labour costs remain at a very similar, stable level.

4.4.3.3.

Inventories

(393) Stock levels of the sampled Union producers developed over the period considered as follows:

Table 17

Inventories

Source: Sampled Union producers.

201420152016Investigation periodClosing stocks (tonnes)117074857259229187864Index100737975

(394) Stock levels of the sampled Union producers were highest in 2014. They decreased by 27 % between 2014 and 2015 and were at a comparable level since then. The level of stocks did not follow the increased production and sales in the investigation period. Given that the product under investigation is sold in bulk, a single delivery can comprise a significant volume of more than 10000 tonnes. Therefore, a single delivery can have a significant impact on the stock level, depending on the precise transaction date. Therefore, the level of stocks is a less meaningful indicator for the Union industry.

4.4.3.4.

Profitability, cash flow, investments, return on investments and ability to raise capital

(395) Profitability, cash flow, investments and return on investments of the sampled Union producers developed over the period considered as follows:

Table 18

Profitability, cash flow, investments and return on investments

Source: Sampled Union producers.

201420152016Investigation periodProfitability of sales in the Union to unrelated customers (% of sales turnover)5,0 %– 0,1 %0,9 %0,8 %Index100– 31816Cash flow (EUR)95181923230041592645883235102719Index100242837Investments (EUR)897018419697707803984538946892Index10022090434Return on investments78 %– 3 %18 %16 %Index100– 42321

(396) The Commission established the profitability of the three sampled Union producers by expressing the pre-tax net profit of the sales of the like product to unrelated customers in the Union as a percentage of the turnover of those sales. The profitability is based on cost of goods sold.

(397) The profitability was low in the whole period considered. Only in 2014 it reached 5 %, whereas there was no profit in 2015 and it did not exceed 1 % in 2016 and the investigation period. The higher profitability in 2014 was mainly due to the extraordinary and financial income of one of the sampled Union producers. Without those items, the profitability of the Union industry in 2014 would be comparable with the other years of the period considered.

(398) The profitability of the Union industry decreased further in the period following the investigation period and for the first six months of 2018 turned into a loss of 1,7 %.

(399) In spite of low profit levels, the Union industry was generating a positive cash flow from its operations in the whole period considered. It was able to self-finance its activities. But also in the case of cash flow, the Union industry generated the highest level in 2014, and did not exceed 37 % of that level in any of the following years.

(400) The Union industry continued to invest during the whole period considered, reaching their highest level of investments during the investigation period. Therefore, the sudden arrival of subsidised imports from Argentina towards the end of the investigation period has not yet negatively affected the level of investments carried out by the Union industry.

(401) The return on investments is the profit in percentage of the net book value of investments. The return on investment significantly decreased by 79 % during the period considered, largely reflecting the trend of profitability.

(402) The financial performance of the Union Industry in terms of profits during the investigation period limited its ability to raise capital.

(403) Following the disclosure of the information document, the GOA claimed that the low profitability of the Union industry during the whole period between 2014 and the investigation period cannot be the result of the imports from Argentina that resumed only in September 2017. In this context, the unrelated importer, Gunvor, also commented following the disclosure of the information document that the Union industry is not suffering from material injury.

(404) Following final disclosure, the GOA and CARBIO reiterated their comments with regard to the performance of the Union industry and made reference to a number of performance indicators that developed positively. The GOA also reiterated its conclusion that in the absence of imports from Argentina the economic situation of the Union industry was not affected by the imports from Argentina.

(405) The Commission observed that the trends, including the trends of profitability, show that the Union industry appears not to have fully recovered from the effects of past dumping. This refers to the period between 2014 and the investigation period that the GOA indicated in its comment. In addition, although imports from Argentina indeed resumed only in September 2017, the fact that they reached an estimated market share of more than 10 % in the last quarter of 2017 cannot be unrelated to the Union industry reaching only 0,8 % profitability during the investigation period (and ultimately losses afterwards). Consequently, that claim was rejected.

4.5.

Economic indicators following the investigation period

(406) The Commission requested and received replies to additional questions to the sampled Union producers. The post-investigation period data, like the microeconomic indicators for the investigation period, were presented as a weighted average of the three sampled Union producers.

(407) For the post-investigation period, for certain macroeconomic indicators such as capacity, capacity utilisation, production and sales the information could only be analysed for the sampled Union producers, due to the time limits of the investigation. Therefore, the figures for the investigation period are not directly comparable to the figures given in Section 4.4.2. The figures nevertheless allow an analysis of the development of the situation of the sampled Union producers after the investigation period.

(408) The production, sales and unit costs and unit sales prices, of the sampled Union producers developed as follows:

Table 19

Union industry following the investigation period

Source: Sampled Union producers.

Investigation periodJanuary-March 2018April-June 2018Total production (tonnes)2614770602303585734Index (annualised)1009290Sales volume on the Union market (tonnes)2657665591108648698Index (annualised)1008998Unit cost of production (EUR/tonne)827793787Index1009695

Average unit sales price in the Union on the total market (EUR/tonne)832765773Index1009293

(409) The developments during the period following the investigation period are presented in comparison to the investigation period for the first and second quarter of 2018, with values indexed to the investigation period.

(410) The capacity of the sampled Union producers in the first half of 2018 remained stable whereas the capacity utilisation decreased from 85 % to 76 %.

(411) Both, the production and sales decreased in the first and the second quarter following the investigation period.

(412) Both, the unit costs and the unit sales prices decreased in both quarters following the investigation period. The unit cost of production decreased by 5 % while the average sales price decreased by 7 %, leading to the decrease in profitability described in recital (398).

4.6.

Conclusion on injury

(413) Apart from a negligible figure of imports in 2015, there were no imports of biodiesel from Argentina to the Union market before September 2017. Although these imports started only late in the investigation period, the imports reached a level that allowed them to reach a market share of 2,8 % in the investigation period increasing to an estimated market share of more than 10 % in the last quarter of 2017, which appears to be confirmed for the first half of 2018, in spite of the registration of imports.

(414) During the period considered the injury indicators showed a mixed picture. Production and sales of the Union industry largely followed the market demand, were stable between 2014 and 2016, and increased in the investigation period, without fully benefitting from the market growth towards the end of the period considered, which was partly taken by the subject imports. Investments significantly increased during the period considered. This was a positive development indicating that the industry started to recover. The start of the increase of employment in 2015 can also be regarded as an indication that the Union industry started to improve its condition in the absence of subsidised imports from Argentina.

(415) In the period following the investigation period the majority of economic indicators showed a clear further deterioration of the economic situation of the Union industry. This concerns the capacity utilisation, production, sales and unit sales prices, as described above.

(416) However, the profitability of the Union industry remained low for most of the period considered, and it did not manage to further improve its productivity per employee. This indicates that the Union industry did not manage to reach the level of regular, profitable operations in this short time. The situation further deteriorated in the first six months of 2018 when the Union industry reported losses.

(417) The Commission found that the investigation period was already negatively influenced by imports from Argentina and the period following the investigation period indicated further deterioration of the situation of the Union industry. In spite of an increase of sales and production, caused by increasing consumption during the investigation period, the Union industry did not show indications of improving its economic situation. In fact, during the investigation period, the Union industry showed almost no profits in view of the pressure exercised by the low prices of the subject imports. The low profits during the investigation period turned into losses in the first six months of 2018. The trends examined before show that the Union industry appears not to have fully recovered from the effects of past dumping. Whilst not being conclusive on the existence of material injury during the period of investigation, the Commission will examine whether there is, at the very least, a threat of material injury.

1. THREAT OF INJURY

5.1.

Introduction

(418) In accordance with Article 8(8) of the basic Regulation, the Commission examined whether the subsidised imports from the country concerned amount to a threat of material injury to the Union industry.

(419) In the analysis of a threat of material injury to the Union industry, in accordance with Article 8(8), second subparagraph, of the basic Regulation, consideration is given to such factors as:

the nature of the subsidy or subsidies in question and the trade effects likely to arise therefrom,

a significant rate of increase of subsidised imports into the Union market indicating the likelihood of substantially increased imports,

sufficient freely disposable capacity of the exporting producer on the part of the exporter or an imminent and substantial increase in such capacity indicating the likelihood of substantially increased subsidised exports to the Union, account being taken of the availability of other export markets to absorb any additional exports,

whether imports are entering at prices that would, to a significant degree, depress prices or prevent price increases which otherwise would have occurred, and would probably increase demand for further imports, and

the level of inventories.

5.2.

The nature of the subsidy or subsidies in question and the trade effects likely to arise therefrom

(420) In recital (304), the Commission concluded on the existence of countervailable subsidies in accordance with the basic Regulation. Those subsidies found show that the imports of the product concerned potentially benefit from governmental support. The significant undercutting found during and after the investigation period is expected to affect even more negatively the delicate economic situation of the Union industry already observed during the investigation period. Moreover, as explained in recital (158), the GOA's measures supporting the domestic biodiesel industry ensure that biodiesel exports remain very competitive because of the lower costs of obtaining soybeans (as opposed to Union producers who are impacted by higher price fluctuations in the costs of the rapeseeds). It is therefore foreseeable that the subsidised imports of the product concerned, because of the nature of the GOA's support measures, could continue to negatively affect the Union industry's economic situation.

5.3.

Significant rate of increase of subsidised imports into the Union market indicating the likelihood of substantially increased imports

(421) There is a clear link between the sudden and substantial increase of biodiesel imports to the Union market from Argentina since September 2017 and the reduction of the anti-dumping duties imposed as of that month, as shown in Table 9. This indicates the ability of the Argentinian exporting producers to quickly react to the changing market conditions. In addition, the data showing Argentinian biodiesel imports following the investigation period confirms that, in spite of the registration of imports, the Argentinian exporting producers continue to export to the Union market similar quantities to the ones exported during the investigation period, once the anti-dumping duties were reduced or lifted.

(422) Therefore, in view of the attractiveness of the Union market for the Argentinian exports, the Commission considered that after the reduction of anti-dumping duties in September 2017, the fact that the volume of biodiesel imports from Argentina have increased significantly indicates the likeliness that such imports will continue to increase. The analysis of imports during the period of January to August 2018 set out in recital (463) confirms actual further increase of biodiesel imports from Argentina.

5.4.

Sufficient freely disposable capacity and absorption capacity of third countries

(423) According to the OECD agricultural statistics

OECD-FAO Agricultural Outlook 2016-2025 — © OECD 2016, https://www.oecd-ilibrary.org/agriculture-and-food/data/oecd-agriculture-statistics_agr-data-en, accessed on 10 September 2018.

of the world biodiesel consumption, in 2017 Argentina had only around 3,5 % of the worldwide consumption. As indicated in recital (202), Argentina exported during the investigation period 57 % of its production.

(424) The low level of Argentinian consumption compared with the worldwide consumption, and consumption in the Union at around 40 % and the USA at around 25 % clearly indicates that the Argentinian biodiesel sector is export-oriented and dependent on these markets (see also recital (209)).

(425) The spare capacity of the Argentinian biodiesel producers during the investigation period is estimated at more than 1,2 million tonnes. That estimate is based on information received from the sampled exporting producers, which represent 84 % of all exports to the Union, extrapolated to the whole Argentinian industry.

(426) The spare capacity of the Argentinian biodiesel producers remained at a similar level in the period following the investigation period according to the information provided to the Commission by the EBB.

(427) On 27 August 2017, the USA imposed provisional countervailing duties against imports of biodiesel from Argentina at rates between 50 % and 60 % and then on 9 November 2017 definitive duties at rates between 71,45 % and 72,28 %. In October 2017, the USA imposed provisional anti-dumping duties ranging from 54,36 % to 70,05 %. On 3 January 2018, the USA confirmed those duties in its Final Determination

International Trade Administration: Biodiesel From Argentina: Final Determination of Sales at Less Than Fair Value and Final Affirmative Determination of Critical Circumstances, document number 2018-04137.

, slightly modifying the levels to range from 60,44 % to 86,41 %.

(428) The magnitude of the level of duties imposed in the USA, which before the imposition of those duties was the most important export market for Argentina, gives strong indications that those biodiesel exports were immediately redirected to the Union market. This redirection is reinforced by the almost simultaneous decrease of anti-dumping duties on Argentinian biodiesel in the Union. This development is shown in Table 20 below:

Table 20

Export volume (tonnes) per month

Source: Argentinian Export Statistics.

Volume of exports from Argentina (tonnes)7/20178/20179/201710/201711/201712/2017To the USA220360144830000To the Union06000030000200000185000163091

(429) The level of exports from Argentina to the Union provided in Table 20 does not equate the level of imports to the Union from Argentina provided in Table 9 in recital (333). The difference is not only due to a different source of data, but mainly to a different timing in registering export and import transactions in the respective statistics.

(430) As indicated in recital (425), there is sufficient freely disposable capacity in Argentina which is even increasing due to a change in the pattern of sales (namely the exclusion of the USA market). That indicates the likelihood of substantially increasing quantities of subsidised exports to the Union. There are no other known export markets that could absorb those additional exports, since the USA and the Union together account for around 2/3 of the global consumption of biodiesel.

(431) Following the disclosure of the information document, with regard to the absorption capacity of the export markets for the Argentinian exporting producers, on 10 July 2018 the authorities of Peru confirmed the imposition of anti-dumping and countervailing duties, totalling together from 137,4 to 399,8 USD per tonne.

(432) The Commission found indications that the threat of a continued redirection of imports from Argentina may cause injury to the Union industry.

5.5.

Price level of subsidised imports

(433) Biodiesel imports from Argentina that arrived in the Union market during the last four months of the investigation period were imported at substantially lower prices than the prices charged by the Union industry. As explained in recital (354), the Commission established for the investigation period weighted average undercutting margins of between 9,5 % and 15,2 %. The comparison of prices observed in the import statistics compared with sales prices of the Union industry confirms this difference. The prices of biodiesel imported from Argentina decreased even further during the period following the investigation period.

5.6.

Level of inventories

(434) The evolution of level of inventories of the sampled Union producers is described in detail in recital (394). As explained, due to the fact that the product concerned is sold in bulk the level of inventories is a less meaningful indicator for the threat of injury.

5.7.

Conclusion

(435) In view of the analysis of the factors concerning threat of injury listed in recital (419), the Commission concluded that the fragile economic condition of the Union industry is likely to be aggravated by the imminent and continuing massive quantities of subsidised imports of biodiesel from Argentina. Therefore, at the very least there was a threat of a clearly foreseeable and imminent injury to the Union industry at the end of the investigation period, which supports a finding of threat of injury under Article 8(8) of the basic Regulation.

(436) Following final disclosure, the GOA disagreed with the conclusion of the Commission and stated that the increase of imports was due to the fact that imports from Argentina were illegally deprived of the Union market during the period of 2012 to 2017. The GOA also added that the Commission has not assessed evidence in order to confirm that the increase of biodiesel imports from Argentina will continue in the future.

(437) The Commission provided in recital (428) detailed information on the development of monthly imports of biodiesel from Argentina during the investigation period. In recital (463) the Commission provided information about the level of imports of biodiesel from Argentina in the period from January to August 2018. This information indicates that imports that started in September 2017 continued, in spite of their registration, following the investigation period.

(438) The imports, which the Commission found to be subsidised, and their continuing massive quantities imported to the Union constituted a threat of a foreseeable and imminent injury to the Union industry at the end of the investigation period. The Commission did therefore not change its finding of threat of injury under Article 8(8) of the basic Regulation.

(439) Following final disclosure, CARBIO commented, with regard to the analysis of the economic indicators following the investigation period, that prices of RME are seasonal, that in the period of August to October 2018 the RME prices were at a record high, and that sales of Union industry during the period following the investigation period increase if compared to 2016.

(440) The Commission took note of these comments. However they neither contradict nor change the Commission conclusion, in particular with regard to injury during the investigation period, set out in recital (417).

1. CAUSATION

(441) In accordance with Article 8(5) of the basic Regulation, the Commission analysed whether the threat of material injury to the Union industry was caused by the existing subsidised imports from the country concerned. In accordance with Article 8(6) of the basic Regulation, the Commission also examined whether other known factors could at the same time have threatened to injure the Union industry. The Commission ensured that any possible threat of injury caused by factors other than the subsidised imports from Argentina was not attributed to the subsidised imports. Those factors are imports from third countries and export performance of the Union industry.

6.1.

Effects of the subsidised imports

(442) As stated in recital (334), there were no imports or only negligible imports to the Union from Argentina in the years 2014-2016 as well as during the first months of the investigating period. However, the imports increased significantly during the last months of the investigation period. As indicated in recital (381) the estimated market share of the Argentinian imports for the last quarter of 2017 is above 10 % and remained above 10 % during the first quarter of 2018 that is after the investigation period and in spite of the registration of imports. As shown in recital (354), the Argentinian biodiesel imports were undercutting the Union industry prices by 9,5 % to 15,2 % during the investigation period.

(443) In view of the coincidence in time between, on the one hand, the significant and sudden increase of the subsidised imports of Argentinian biodiesel at prices below those of the Union industry, and, on the other hand, the Union industry's estimated loss of market share in the last quarter of 2017 and the first quarter of 2018, together with its inability to achieve profits, the Commission concluded that those subsidised imports had a negative impact on the situation of the Union industry. Moreover, the insignificant domestic consumption in Argentina, the significant spare capacity of the Argentinian biodiesel producers, and the foreclosure of the second biggest export market of USA have directed the excess production from Argentina to the Union, which constitutes 40 % of the worldwide consumption. Thus, the Union has become one of the most attractive destinations for Argentinian subsidised imports of biodiesel, to the detriment of the Union industry.

(444) Following the disclosure of the information document, the GOA claimed that the imports from Argentina do not represent a significant increase of imports or market shares. The unrelated importer Gunvor noted in this regard that imports return to their historical averages.

(445) In this regard, the Commission considered reaching an estimated market share exceeding 10 % in the last quarter of 2017 as compared to a 0 % market share during the first eight months of 2017 as a significant increase.

(446) In addition, following the disclosure of the information document CARBIO stated that in the context of a threat of injury analysis the Commission must indicate the likelihood of substantially increased imports, and that an increase in imports which is due merely to the return of allegedly normal conditions of trade and competition, resulting from the removal of unjustified anti-dumping duties, does not indicate a likelihood that imports will continue to increase substantially.

(447) As explained in recitals (335) to (338), imports of biodiesel from Argentina continued in 2018 and reached an estimated level of 11,5 %. In addition, there was no reduction of import levels from Argentina following the registration as of 25 May 2018 onwards. This, combined with the spare capacity of the Argentinian biodiesel producers described in recital (425) and the attractiveness of the Union market, indicates the likelihood that imports will continue to increase substantially in the future. In the Commission's view, this increase in imports originating from Argentina reflects unfair trading conditions (as opposed to normal trade conditions without the previous anti-dumping measures in place) because of the subsidies found to exist.

(448) Therefore, the Commission considered that the subsidised imports of Argentinian biodiesel are causing a threat of material injury to the Union industry.

6.2.

Other known factors

(449) The Commission also examined whether other known factors, individually or collectively, are capable of attenuating the causal link established between the subsided imports and the threat of injury found to exist.

(450) Following the disclosure of the information document CARBIO claimed that the Union industry had not managed to achieve a gradual recovery during the period considered, that is also during the time that there was no imports from Argentina. CARBIO further argued that this is evidence that there are other factors that impact on the performance of the Union industry.

(451) The Commission concluded in recital (416) that the profitability of the Union industry indeed remained low for most of the period considered and it did not manage to reach the level of regular, profitable operations. However, as explained in recital (405), the Commission observed that the Union industry appears not to have fully recovered from past dumping found in the previous investigation. Moreover, the fact that the Union producers

use rapeseeds as an input (compared to the Argentinian export producers, using soybeans) does not explain the price differences between the Union biodiesel and the Argentinian biodiesel. Should the exporting producers purchase the soybeans at undistorted prices, their export prices would be very similar to the Union prices. Thus, as further developed below, the investigation has not established any factors that would have attenuate the causal link between subsidised imports and the threat of injury found. Consequently, that claim was rejected.

6.3.

Imports from third countries

(452) The volume of imports from other third countries developed over the period considered as follows:

Table 21

Imports from third countries

Source: EU Import statistics based on Surveillance 2 database.

Country201420152016Investigation periodPeople's Republic of ChinaVolume (tonnes)5395116038497217313Index100227144028Market share0,0 %0,0 %0,3 %1,6 %Average price (EUR/tonne)941826763812MalaysiaVolume (tonnes)340240349571273427378395Index10010380111Market share2,9 %2,9 %2,3 %2,7 %Average price (EUR/tonne)8838809751007All countries except Argentina, China and MalaysiaVolume (tonnes)197787104765202879207953Index10053103105Market share1,7 %0,9 %1,7 %1,5 %Average price (EUR/tonne)820791762891

(453) Other than imports from Argentina, imports from only two other countries, the People's Republic of China (the PRC) and Malaysia, have exceeded a market share of 1 % in any given year.

(454) The only significant imports from the PRC appeared in the investigation period and reached a market share of 1,6 %.

(455) Imports from Malaysia were at a stable level throughout the period considered with a market share between 2,3 % and 2,9 %.

(456) Imports from third countries other than Argentina, the PRC or Malaysia never exceeded a combined market share of 1,7 %. Therefore, none of these countries could have had any significant influence the market share of the Union industry, in particular given the stable quantities of such imports.

(457) The average price of biodiesel imported from the PRC during the investigation period was 812 EUR per tonne. This was the only time when such imports were in significant quantities. With regard to Malaysia, the average import price ranged from 883 EUR per tonne in 2014 and increased to over 1000 EUR per tonne in the investigation period. At the same time the volumes increased only by 11 % during the period considered, which is below the increase in demand leading to a loss of market share.

(458) In this regard, the average import price from Argentina was 636 EUR per tonne in the investigation period, which is significantly lower than all other market players. The statistical information does not precisely indicate differences in the characteristics of the biodiesel imported to the Union. Price differences result from different levels of CFPP and from whether the biodiesel imported can be subject to double-counting or not.

(459) Following the disclosure of the information document the GOA claimed that there is no causal link between the imports from Argentina and injury to the Union industry due to other factors, namely imports from other countries.

(460) Following final disclosure, the GOA reiterated its claim that the Commission failed to examine the effects of all possible factors other than imports of biodiesel from Argentina that might be causing injury to the Union industry.

(461) Following final disclosure, CARBIO reiterated its claim that the threat of injury was not caused by imports from Argentina.

(462) With regard to imports from other countries, the Commission provided detailed information above. The two other countries with significant imports during the investigation period were Malaysia and the PRC, that held 2,7 % and 1,6 % market share in the Union, respectively. These market shares are appreciably lower compared with a market share established for the last quarter of 2017 for imports from Argentina of more than 10 %. Moreover, the average price for imports from Malaysia and PRC was 1007 and 812 EUR per tonne respectively. These prices, compared to 636 EUR per tonne of biodiesel imported from Argentina during the investigation period show that the imports from Malaysia and PRC, both in volume and value, did not attenuate the causal link established between the subsided imports and the threat of injury found to exist.

(463) Following the disclosure of the information document CARBIO commented on the increasing imports from Indonesia. The imports from other third countries during the first eight months of 2018, compared to imports from Argentina during the same period presented in recital (335) were following:

Table 22

Imports from third countries January-August 2018

Source: EU Import statistics based on Surveillance 2 database.

Volume of imports (tonnes)Estimated market shareAverage price (EUR)Argentina109202411,5 %613People's Republic of China1736931,9 %686Indonesia4677695,0 %667Malaysia3034213,2 %732All countries except Argentina, the PRC and Malaysia1501591,6 %542

(464) As analysed in more detail in recitals (336) to (338), imports from Argentina continued following the investigation period in spite of registration of imports. Their estimated market share, assuming an unchanged consumption level and annualised for comparability, amounts to 11,5 %. Imports from the PRC remained at a very similar level, reaching a market share of 1,9 % compared to 1,6 % during the investigation period. It is significant that imports of biodiesel from Indonesia into the Union appeared again, and reached an estimated market share of 5 % during the period of January-August 2018. At the same time, these imports were less than half the quantity of imports from Argentina. Imports from Malaysia increased slightly reaching an estimated market share of 3,2 % as compared to 2,7 % during the investigation period.

(465) With regard to the average price per tonne of imports from third countries, the price per tonne of biodiesel imported from Argentina remains by far the lowest among the four countries with significant imports. The average prices of imports from the PRC and Malaysia have also decreased during the first eight months of 2018.

(466) On that basis, the Commission concluded that the exports from third countries, although they might have contributed to the lack of recovery of the Union industry, did not attenuate the causal link between subsidised imports and the threat of injury found. The Commission concluded that it is unlikely that exports from third countries would be the main cause of injury in the imminent future.

6.4.

Export performance of the Union industry

(467) None of the sampled Union producers exported biodiesel during the period considered. The export statistics in Table 23 are therefore based on a publicly available source, and provide information for the whole Union industry:

Table 23

Export performance of the Union industry

Source: Eurostat export statistics

201420152016Investigation periodExport volume (tonnes)98552111884190633217146Index100114193220

(468) The level of biodiesel exports of the Union industry was limited. It did not exceed 3,5 % of its total sales on the Union market in any year of the period considered. The export performance of the Union industry cannot have been a cause for the lack of recovery of the domestic industry and its delicate economic situation in the investigation period.

(469) CARBIO in its submission commented that the low level of imports could not be the cause of injury suffered by the Union industry and repeated this argument following the disclosure of the information document. In this regard, the Commission notes that even less significant imports of the product concerned can have the effect of suppressing prices on the Union market. The imports from Argentina significantly exceed the threshold of negligible injury mentioned in Articles 10(9) and 14(4) of the basic Regulation, and in the last quarter of the investigation period even exceeded 10 %.

(470) CARBIO further claimed that there is no injurious effect of imports, because these depend on seasonal variations, the price of diesel and supply of feedstock. The information that the Commission received from the cooperating exporting producers, the Union producers and from public sources also included information concerning seasonal variations, the price of diesel and supply of feedstock. It allowed the Commission to take also these factors into account in its analysis.

(471) Following final disclosure, CARBIO reiterated the comment that the Union industry is not facing a threat of material injury and that the alleged threat of material injury was not caused by imports from Argentina. In addition, CARBIO makes reference to findings of the Commission Regulation (EU) 2018/1570

OJ L 262, 19.10.2018, p. 40.

, referred to in recital (347) in which the Commission concluded that it is not possible to establish a causal link between the dumped imports from Argentina and the material injury suffered by the Union industry.

(472) With regard to the reference made to Regulation (EU) 2018/1570, the Commission noted that the finding of this Regulation concerned material injury and not threat of injury, and that the investigation period reassessed by the Commission was 1 July 2011 to 30 June 2012, as compared to investigation period of January to December 2017 of this Regulation. Given the different time periods and the different legal standards, the findings of that Regulation are not relevant for the Commission's findings in this investigation.

6.5.

Reduction of production of the Union industry

(473) In the course of the analysis for the registration of imports, the Commission also took note of two companies that announced reductions in the production of biodiesel in March 2018, namely Saipol, the largest European biodiesel producer, and ADM

Information about reductions in the production of biodiesel of Saipol and ADM is made available to the interested parties on the file.

.

(474) Following the disclosure of the information document, the EBB provided additional information concerning the negative impact of increasing imports from Argentina on six companies of the Union industry. The information relating to five of the companies referred to a negative impact on their profitability. For one of the six companies, production will be substantially reduced as a result of the Argentinian imports. One of the six companies also indicated Argentinian imports had had a substantially negative impact on their revenue. These companies account for more than 10 % of Union production and capacity taken together.

6.6.

Conclusion

(475) The Commission established that there is a causal link between the threat of injury suffered by the Union industry and the subsidised imports of biodiesel from Argentina. There is a coincidence in time between the sharp increase of, in the particular, the level of the subsidised imports at low prices undercutting the Union industry's prices, and the drop of the Union industry's performance, in particular from the last quarter of 2017 onwards. The Union industry was unable to reap the benefits of increased Union consumption and had to limit its increase in production, lost market share and was unable to achieve profits. Those negative developments continued in the period following the investigation period. The Union industry had no other choice but to follow the price level set by the subsidised imports in order to avoid a further shrinking of its market share. This resulted in a loss-making situation which is likely to further deteriorate.

(476) The Commission distinguished and separated the effects of all known factors on the situation of the Union industry from the injurious effects of the subsidised imports.

(477) The other identified factors such as exports from other third countries, export sales performance of the Union industry, and a reduction of capacity of the Union industry did not attenuate the causal link.

1. UNION INTEREST

(478) In accordance with Article 31 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 subsidisation. The Commission bases the determination of the Union interest on an appreciation of all the various interests involved, including those of the Union industry, importers and consumers.

7.1.

Interest of the Union industry

(479) Biodiesel is an important element of an effort to reduce greenhouse gas emissions and improve the energy supply in the Union.

(480) The Union industry uses mainly feedstock produced by the Union agriculture. The upstream agricultural oil sector largely depends on the biodiesel industry. Imports of biodiesel from Argentina would therefore not only influence the biodiesel industry, but also the agricultural sector in the Union.

(481) After the disclosure of the information document, the EBB submitted further evidence of injury suffered by the Union industry, such as negative impact on their profitability and a substantial reduction of production (see recitals (362) and (474)).

(482) The Commission found that the situation of the Union industry is fragile since it has not fully recovered from the dumping previously suffered. The Commission therefore concluded that the imposition of countervailing duties would be in the interest of the Union industry.

7.2.

Interest of unrelated importers

(483) As referred to in recital (30), only one unrelated importer, Gunvor International BV, replied to the questionnaire sent by the Commission. In its reply, the importer submits that it is against the imposition of measures and that the situation of the Union industry is caused by an inefficient production system and management.

(484) The Commission observes that importers of biodiesel are very often traders on the Union market that not only do import, but also trade with biodiesel purchased from Union producers. However, the Union producers, especially the larger ones, rely to a significant extent on their own distribution channels. The Commission therefore does not expect the importers would be able to fully replace the level of imports affected by measures with biodiesel purchased from Union producers. The possible negative effect on importers can however partially be balanced by the increased volume of trade of biodiesel purchased from the Union industry.

7.3.

Interest of users/consumers

(485) Producers of diesel fuel, that is refineries, purchase the biodiesel, imported or produced by Union industry. Due to legal requirement, refineries need to add biodiesel to the fossil fuel sold on the market.

(486) In this regard it is the final consumer that would be affected by the price increase following imposition of measures. The price of fossil fuels is, with rare exemptions, lower than price of biodiesel, but given its content of normally no more than 10 %, the negative effect of price increase of biodiesel is only partially passed on to the consumer.

7.4.

Conclusion

(487) The Commission found that the imposition of duties would have the negative effect of increasing consumer prices. However, because of the limited content of biodiesel in the final product purchased by consumers (typically less than 10 %), this negative effect on the price of diesel fuel would only be a small proportion compared to the direct change in the price of biodiesel on the Union market.

(488) Following the disclosure of the information document the EBB stated that the Commission has acted inconsistently with its obligations by finding it was unable to conclude on Union interest despite the lack of any compelling reasons showing that the imposition of measures would be against Union interest.

(489) The Commission in its information document found it imperative to examine the effects of changes that took place shortly before issuing the information document and happened after the end of the investigation period.

(490) The EBB further commented that the Commission failed to clearly state the reasons on which its ultimate finding was based that it remained unclear as to whether the imposition of measures would be in the interest in the Union.

(491) The Commission, as explained in recital (489), found it imperative to further examine additional information with regard to Union interest and this was the reason for the decision of not imposing provisional measures.

(492) The Commission examined all additional information obtained following the disclosure of the information document, that included in particular, but was not limited to, the replies to additional questionnaires received from the EBB and the sampled Union producers, statistics on biodiesel imports to the Union after the investigation period and other data provided by interested parties following the disclosure of the information document. On the basis of the examination of this additional information, and further evidence of injury suffered by the Union industry, such as negative impact on profitability and a substantial reduction of production explained in recitals (366)(363) and (473), the Commission concluded that there are no compelling reasons under Article 31 of the basic Regulation that it would not be in the interest of the Union to impose measures.

1. DEFINITIVE COUNTERVAILING MEASURES

(493) On the basis of the conclusions reached by the Commission on subsidy, threat of injury, causation and Union interest, a definitive countervailing duty should be imposed to prevent the materialisation of the imminent threat of material injury caused to the Union industry by the subsidised imports.

8.1.

Injury elimination level

(494) To determine the level of the measures, the Commission first established the amount of duty necessary to eliminate the threat of injury suffered by the Union industry.

(495) When calculating the injury elimination level the Commission considered that this level should allow the Union industry to cover its costs of production and obtain a profit before tax that could be reasonably achieved by an industry of this type in the sector under normal conditions of competition, i.e. in the absence of subsidised imports, on sales of the like product in the Union.

(496) The injury elimination level was calculated on the basis of a comparison of the weighted average price of the subsidised imports, as established for the price undercutting calculations in recital (354), and the non-injurious price of the Union industry for the like product. The non-injurious price was established by adding to the cost of production a reasonable profit level. The target profit margin was set at 11 %, that is the level used by the Commission in its previous investigation with measures imposed on 26 November 2013.

(497) Following the disclosure of the information document CARBIO argued that the target profit should be the profit from the period between 2015 and September 2017 and not the 11 % target profit used in the previous investigation. CARBIO reiterated this claim following final disclosure.

(498) The Commission used the target profit of the previous investigation, because, irrespective of establishing injury or not, the Commission observed that the Union industry appears not to have fully recovered from the effects of past dumping, and therefore the profit levels reached during the period considered are not representative. In this respect, the Commission still considers the profit used in its previous investigation as appropriate and prevailing in a situation of low volumes of subsidised imports.

(499) The injury elimination level for other cooperating companies and for all other companies is defined in the same manner as the subsidy rates for these companies in recital (304).

8.2.

Retroactive imposition of countervailing duties

(500) As stated in recital (10), the Commission made imports of the product concerned originating in Argentina subject to registration by the registration Regulation in view of the possible retroactive application of any countervailing measures under Article 24(5) the basic Regulation.

(501) Pursuant to Article 16(4) of the basic Regulation, duties may be levied retroactively on products which were entered for consumption no more than 90 days prior to the date of application of provisional measures. The Commission observes that no provisional measures were imposed in this case.

(502) On that basis, the Commission considers that one of the legal conditions under Article 16(4) of the basic Regulation is not met and therefore the duties should not be levied retroactively on the registered imports.

(503) Following final disclosure, the EBB stated that the duties should be levied retroactively on the registered imports, as the four conditions for the retroactive collection of duties under Article 16(4) of the basic Regulation are met. In particular, EBB stated that the second part of Article 16(4) referring to not prior to the initiation of the investigation should be applied in the case at hand as it should be read separately from the text no more than 90 days prior to the date of application of provisional measures.

(504) Article 16(4) of the basic Regulation sets out that duties may be levied retroactively only on products which were entered for consumption no more than 90 days prior to the date of application of provisional measures but not prior to the initiation of the investigation. The second part of Article 16(4) referring to not prior to the initiation of the investigation cannot be read separately from the rest of the text of that Article as the Article does not allow for that.

(505) Consequently, in the absence of provisional duties, which, if in place, are a retroactive application of definitive duties, as set out in recital (502), the Commission considers that the legal conditions under Article 16(4) of the basic Regulation are not met and therefore the duties should not be levied retroactively on the registered imports.

8.3.

Definitive measures

(506) In the light of the foregoing and in accordance with Article 15(1) of the basic Regulation, a definitive countervailing duty should be imposed at a level sufficient to eliminate the threat of injury caused by the subsidised imports without exceeding the amount of subsidisation found.

(507) Given the high rate of cooperation of Argentinian exporting producers, the all other companies duty was set at the level of the highest duty imposed on the sampled companies. The all other companies duty will be applied to those companies which did not cooperate in this investigation.

(508) For the other cooperating non-sampled Argentinian exporting producers listed in Table 24, the definitive duty rate is set at the weighted average of the rates established for the cooperating exporting producers in the sample.

(509) On that basis, the definitive duty rates to be imposed are set as follows:

Table 24

Definitive Countervailing Duty

Company/GroupInjury elimination levelAmount of subsidisationCountervailing duty rateLDC Argentina SA31,7 %26,2 %26,2 %Group Renova25,0 %27,2 %25,0 %Group T633,9 %33,4 %33,4 %Other cooperating companies — COFCO Argentina SA and Cargill SACI29,6 %28,2 %28,2 %All other companies33,9 %33,4 %33,4 %

(510) The individual company countervailing duty rates specified in this Regulation was established on the basis of the findings of this investigation. Therefore, individual countervailing duty rates reflect the situation found during this investigation with respect to the companies concerned. Those individual duty rates (as opposed to the countrywide duty applicable to all other companies) are thus exclusively applicable to imports of products originating in the country concerned and produced by the companies concerned. Imported products produced by any other company not specifically mentioned in the operative part of this Regulation, including entities related to those specifically mentioned, cannot benefit from those rates and are subject to the duty rate applicable to all other companies.

(511) A company may request the continued application of those individual duty rates despite subsequently changing its name or the name of one of its entities. The request must be addressed to the Commission. The request must contain all the relevant information enabling to demonstrate that the change does not affect the right of the company to benefit from the individual duty rate which applies to it. If the change of name of the company does not affect its right to benefit from the duty rate which applies to it, a notice informing about the change of name will be published in the Official Journal of the European Union.

(512) Should developments after the investigation period lead to a change in circumstances of a lasting nature, appropriate action in accordance with Article 19 of the basic anti-subsidy regulation may be taken.

(513) In view of the case-law of the Court of Justice

Judgment in Wortmann, C-365/15, EU:C:2017:19, paragraphs 35 to 39.

, it is appropriate to provide for the rate of default interest to be paid in case of reimbursement of definitive duties, because the relevant provisions in force concerning customs duties do not provide for such an interest rate, and the application of national rules would lead to undue distortions between economic operators depending on which Member State is chosen for customs clearance.

1. DISCLOSURE

(514) Interested parties were informed of the essential facts and considerations on the basis of which it was intended to recommend the imposition of a definitive countervailing duty on imports of biodiesel, originating in Argentina.

(515) Interested parties were also granted a period within which they could make representations subsequent to this disclosure. The comments submitted by interested parties were duly considered, and, where appropriate, the findings have been modified accordingly.

1. FORM OF THE MEASURES

(516) Following final disclosure, eight cooperating exporting producers, including their related companies in Uruguay and Switzerland, and together with CARBIO, offered price undertakings in accordance with Article 13(1) of the basic Regulation.

(517) The Commission accepted these undertaking offers by Implementing Decision (EU) 2019/245

Commission Implementing Decision (EU) 2019/245 of 11 February 2019 accepting undertaking offers following the imposition of definitive countervailing duties on imports of biodiesel originating in Argentina (See page 71 of this Official Journal).

, as it considers that they eliminate the injurious effects of the subsidised imports and limit to a sufficient degree the risk of circumvention.

(518) Whenever the Commission withdraws, under Article 13(9) of the basic Regulation, its acceptance of an undertaking following a breach by referring to particular transactions and declares the relevant undertaking invoices as invalid, a customs debt shall be incurred at the time of acceptance of the declaration for release into free circulation of these transactions.

(519) The measures provided for in this Regulation are in accordance with the opinion of the Committee established by Article 15(1) of Regulation (EU) 2016/1036 of the European Parliament and of the Council

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 (OJ L 176, 30.6.2016, p. 21).

,

HAS ADOPTED THIS REGULATION:

Article 1

1. A definitive countervailing duty is imposed on imports of fatty-acid mono-alkyl esters and/or paraffinic gasoils obtained from synthesis and/or hydro-treatment, of non-fossil origin, in pure form or as included in a blend, currently falling within CN codes ex15162098 (TARIC codes 1516209821, 1516209829 and 1516209830), ex15180091 (TARIC codes 1518009121, 1518009129 and 1518009130), ex15180095 (TARIC code 1518009510), ex15180099 (TARIC codes 1518009921, 1518009929 and 1518009930), ex27101943 (TARIC codes 2710194321, 2710194329 and 2710194330), ex27101946 (TARIC codes 2710194621, 2710194629 and 2710194630), ex27101947 (TARIC codes 2710194721, 2710194729 and 2710194730), 27102011, 27102015, 27102017, ex38249992 (TARIC codes 3824999210, 3824999212 and 3824999220), 38260010 and ex38260090 (TARIC codes 3826009011, 3826009019 and 3826009030) and originating in Argentina.

1. The rates of the definitive countervailing duty applicable to the net, free-at-Union-frontier price, before duty, of the product described in paragraph 1 and produced by the companies listed below shall be as follows:

CompanyDefinitive countervailing dutyTARIC additional codeAceitera General Deheza SA33,4 %C493Bunge Argentina SA33,4 %C494LDC Argentina SA26,2 %C495Molinos Agro SA25,0 %C496Oleaginosa Moreno Hermanos SACIFyA25,0 %C497Vicentin SAIC25,0 %C498

COFCO International Argentina SA28,2 %C490Cargill SACI28,2 %C491All other companies33,4 %C999

1. Unless otherwise specified, the provisions in force concerning customs duties shall apply. The default interest to be paid in case of reimbursement that gives rise to a right to payment of default interest shall be the rate applied by the European Central Bank to its principal refinancing operations, as published in the C series of the Official Journal of the European Union, in force on the first calendar day of the month in which the deadline falls, increased by one percentage point.

Article 2

1. Imports declared for release into free circulation shall be exempt from the countervailing duty imposed by Article 1, provided that they are manufactured, shipped and invoiced by companies from which undertakings are accepted by the Commission and whose names are listed in Implementing Decision (EU) 2019/245, as from time to time amended, and have been imported in conformity with the provisions of the same Commission Implementing Decision.

1. The imports mentioned in paragraph 1 shall be exempt from the countervailing duty on condition that:

(a) such imports are accompanied by an undertaking invoice which is a commercial invoice containing at least the elements and the declaration stipulated in Annex 1 of this Regulation; and

(b) such imports are accompanied by an Export Undertaking Certificate according to Annex 2 of this Regulation; and

(c) the goods declared and presented to customs correspond precisely to the description on the undertaking invoice.

1. A customs debt shall be incurred at the time of acceptance of the declaration for release into free circulation:

(a) whenever it is established, in respect of imports described in paragraph 1, that one or more of the conditions listed in that paragraph and paragraph 2 are not fulfilled; or

(b) when the Commission withdraws its acceptance of the undertaking pursuant to Article 13(9) of Regulation (EU) 2016/1037 in a Regulation or Decision which refers to particular transactions and declares the relevant undertaking invoices as invalid.

Article 3

The companies from which undertakings are accepted by the Commission and whose names are listed in the Implementing Decision (EU) 2019/245 as subsequently amended, and subject to certain conditions specified therein, will also issue an invoice for transactions which are not exempted from the countervailing duty. This invoice is a commercial invoice containing at least the elements stipulated in Annex 3 to this Regulation.

Article 4

Registration of imports resulting from Implementing Regulation (EU) 2018/756 making imports of biodiesel originating in Argentina subject to registration shall be discontinued. No definitive countervailing duty will be levied retroactively for registered imports.

Article 5

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

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

Done at Brussels, 11 February 2019.

For the Commission

The President

Jean-Claude Juncker

Annex

ANNEX 1

The following elements shall be indicated in the Commercial Invoice accompanying the Company's sales to the European Union of goods, which are subject to the Undertaking:

(1) The heading COMMERCIAL INVOICE ACCOMPANYING GOODS SUBJECT TO AN UNDERTAKING.

(2) The name of the Company issuing the Commercial Invoice and the name of the Company manufacturing the goods.

(3) The Commercial Invoice number.

(4) The date of issue of the Commercial Invoice.

(5) The TARIC additional code under which the goods on the invoice are to be customs-cleared at the European Union frontier.

(6) The exact plain language description of the goods and:

technical specifications of the company product code number (CPC),

the company product code number (CPC),

CN code,

quantity (to be given in units expressed in Metric Tons).

(7) The description of the terms of the sale, including:

price per unit (Metric Ton),

the applicable payment terms,

the applicable delivery terms,

total discounts and rebates.

(8) Name of the Company acting as an importer to which the invoice is issued directly by the Company.

(9) The name of the official of the Company that has issued the Commercial Invoice and the following signed declaration:

I, the undersigned, certify that the goods sold for export to the European Union covered by this invoice were manufactured by (Company name and address) (TARIC additional code) in Argentina within the scope and under the terms of the Undertaking accepted by the European Commission through Implementing Decision (EU) 2019/245. I declare that the information provided in this invoice is complete and correct.

Annex

ANNEX 2

Export undertaking certificate

The following elements shall be indicated in the Export Undertaking Certificate to be issued by CARBIO for each Commercial Invoice accompanying the Company's sales to the European Union of goods which are subject to the Undertaking:

(1) The name, address and telephone number of the Cámara Argentina de Biocombustibles (CARBIO).

(2) The name of the company mentioned in Implementing Decision (EU) 2019/245 issuing the Commercial Invoice and the name of the Company manufacturing the goods.

(3) The Commercial Invoice number.

(4) The date of issue of the Commercial Invoice.

(5) The TARIC additional code under which the goods on the invoice are to be customs cleared at the European Union frontier.

(6) The exact description of the goods, including:

the technical specification of the goods, the company product code number (CPC) (if applicable),

CN code.

(7) The precise quantity in units exported expressed in Metric Tons.

(8) The number and expiry date (three months after issuance) of the certificate.

(9) The name of the official of CARBIO that has issued the certificate and the following signed declaration:

I, the undersigned, certify that this certificate is given for direct exports to the European Union of the goods covered by the Commercial Invoice accompanying sales made subject to the undertaking and that the certificate is issued within the scope and under the terms of the undertaking offered by [company] and accepted by the European Commission through Implementing Decision (EU) 2019/245. I declare that the information provided in this certificate is correct and that the quantity covered by this certificate is not exceeding the threshold of the undertaking.

(10) Date.

(11) The signature and seal of CARBIO.

Annex

ANNEX 3

The following elements shall be indicated in the Commercial Invoice accompanying the Company's sales to the European Union of goods, which are subject to the countervailing duties:

(1) The heading COMMERCIAL INVOICE ACCOMPANYING GOODS SUBJECT TO COUNTERVAILING DUTIES.

(2) The name of the Company issuing the Commercial Invoice and the name of the Company manufacturing the goods.

(3) The Commercial Invoice number.

(4) The date of issue of the Commercial Invoice.

(5) The TARIC additional code under which the goods on the invoice are to be customs-cleared at the European Union frontier.

(6) The exact plain language description of the goods and:

technical specifications of the company product code number (CPC),

the company product code number (CPC),

CN code,

quantity (to be given in units expressed in Metric Tons).

(7) The description of the terms of the sale, including:

price per unit (Metric Tons),

the applicable payment terms,

the applicable delivery terms,

total discounts and rebates.

(8) The name and signature of the official of the Company that has issued the Commercial Invoice.