The European Biodiesel Board (EBB) has filed a complaint with the European Commission (EC) claiming Argentina is illegally subsidising its biodiesel exports, creating a market distortion.

The association, representing European biodiesel producers, lodged the complaint on 3 November with hopes that it could lead to the EC starting a countervailing duty investigation, wrote Euractiv France.

The EU’s previous 22-25% import tax, which was overturned in September following a World Trade Organization (WTO) decision, was based on an antidumping principle, but now EBB was claiming that Argentine biodiesel enjoyed both state aid and a differential tax treatment, creating unfair competition.

Argentina imposed an export tax falling on final buyers on soyabean products, which benefited producers who incorporated the tax in their selling price and the state, which received increased tax income.

Biodiesel, however, was exempt from the tax, which EBB said made it very competitive while being subsidised because of the highly complex system underlying the Argentine tax code.

The EC now has 45 days to indicate whether it would open an investigation, but according to Euractiv the decision could be reached much more quickly due to an urgent need to respond to a possible flood of Argentine biodiesel to the European market.

EBB also hoped that the EC would begin to register all Argentine imports if an investigation was started in order to discourage exporters.

The USA imposed 71.45-72.28% cash deposits on biodiesel imports from Argentina earlier in November, and Australia and Peru also had import tariffs in place, which Euractiv said would make it hard for Argentina to defend its case at the WTO.

“They will not be able to say that the problem is Australia, Europe, Peru or the USA. The problem is Argentina, which has an unfair policy that the EU must stop,” said Raffaello Garofalo, EBB secretary general.