After limiting production earlier in the year, French biodiesel producer Avril has returned to running its plants at full capacity due to high petroleum oil prices and increasing demand.

The plants had been operating at full capacity since June, but continuing biodiesel imports from Argentina could still force the company to limit production, reported Reuters on 24 July.

Avril cut production at its oilseed processing unit Saipol for six months in March, citing the large influx of Argentine imports after the EU’s 2017 removal of import taxes as the reason.

“We will renew the part-time work plan for another six months because even though there is some progress, Argentine biodiesel is still coming massively into Europe every month,” Jean-Philippe Puig, Avril CEO, told Reuters.

“For the moment we are running at full capacity, but how long this will last, I have no idea,” he added.

EU producers were hoping that the EU Commission would impose new tariffs on Argentina in September, based on new allegations that the country was unfairly subsidising its biofuel industry.

As a positive turn, crude oil prices had climbed in the past months, mostly due to fears about possible US sanctions on Iran limiting oil supplies.

European buyers had also begun stockpiling biodiesel for the next year, anticipating higher prices following a new EU tax, said Reuters.

Earlier in July, unnamed industry sources told the news agency that Argentine biofuel sales to the EU had already halted due to the threat of new tariffs, which could leave 85% of the country’s biodiesel exports without viable markets.

In 2017, Avril produced 1.4M tonnes of biodiesel from a capacity of 1.8M tonnes and the company was expecting production to fall further this year due to the reduced output in March.