EU Anti-Dumping Ruling on China Marks Serious Shift in Biofuels Market

The European Union has made waves in the international biofuels market by announcing preliminary anti-dumping duties on Chinese biodiesel and hydrotreated vegetable oil (HVO) importers.

The tariffs, ranging from 23.7% to 36.4%, are slated to take effect starting August 16^th. Many experts agree this ruling could mark the end of the EU’s principal biodiesel and HVO import redundancy.

This blog will get into some of the most important details about this emerging development. To get even more insights about what this will mean for the biofuels market, make sure to watch our on-demand webinar covering the topic.

Why is This Happening?

Anti-dumping measures like this occur when domestic governments impose tariffs on imported foreign goods when they are introduced to that market at prices lower than fair market value. This is where the term itself, "dumping," stems from.

By dumping fuels into a market like this, the domestic markets can be profoundly affected. Anti-dumping measures protect local economies and businesses from becoming unable to compete—something we've seen in multiple examples within the EU, US, and other regions in this case.

Chinese Imports Dominated Recent EU Biofuels Industry

Since late 2022, Chinese HVO and biodiesel supplies have been driving Europe's biofuel industry. This flood of imported biofuel was created mostly from waste (and double-counting in terms of EU biofuel mandates).

However, the imports significantly impacted the domestic market, leading to plummeting prices for biofuels and associated raw materials.

China's biodiesel exports reached a high point of around 1.8 million tons in 2023. These figures came despite mounting accusations from Europe of unethical business practices within China's supply chain.

Rather than focusing on these allegations, the EU concentrated its efforts on examining the systemic subsidies within China's industry. European producers have consistently argued that these subsidies are creating unfair competition.

Leading up to the announcement of the EU's provisional duties, export volumes of Chinese biodiesel to Europe have begun to decline. Nevertheless, they remained a significant source for the EU market.

Potential Deficit Will Likely Drive EU Biofuel Production Increases

As the market responds to these findings, several questions have emerged about what’s next. As biodiesel imports will assuredly decrease from China, several market opportunities will emerge.

European companies now face the challenge of meeting the increasing Renewable Energy Directive III (RED III) mandates with a significantly restricted supply pool by 2030. The demand is expected to triple from the 2020 levels.

Given China's dominant position in providing biodiesel and HVO, scaling the supply chain to accommodate the demand will become increasingly challenging. This supply deficit could pave the way for a significant revival of EU biodiesel and HVO production using imported raw materials. As a result, the demand for advanced feedstocks such as crude tall oil (CTO) could see a sharp increase in the short-term future.

View Our On-Demand Webinar Covering EU Anti-Dumping

The EU's decision to levy anti-dumping duties on Chinese biodiesel and HVO exporters marks a significant shift in the biofuel industry. The impacts of this decision will resonate far and wide, not only shifting the biofuel supply scenarios but also potentially offering a much-needed rebound for EU's domestic biofuel manufacturing.

To get a better sense of what this will mean for the market, check out our on-demand webinar, After China Anti-Dumping: The International Biofuels Landscape.

This webinar is designed to provide industry professionals with critical insights into these changes and what they mean for the future.

• What Just Happened and Why?: What the provisional tariff structure looks like, exemptions, timelines, and implications.
• Market Shifts and Strategic Responses: The current volume of biofuel at stake, trade flows for Chinese biofuels and UCOs, the revival of EU biofuel production
• Emerging Trends and Opportunities: Trends in sustainable aviation fuel (SAF), maritime markets and bio-bunkering, trade precedents in wake of the US elections, and other market implications.
• Strategy and Planning: Feedstocks from areas such as the US forest value chain, understanding structure within ESG-driven markets and requirements.

Use the button below to view the webinar today.