The European Commission (EC) has decided not to impose provisional import tariffs on Argentine biodiesel even though it considers the fuelto be subsidised and a potential threat to EU producers, Reuters reports.

The EC’s decision on 21 September has been described as “incomprehensible for European oilseeds farmers” by the European Oilseed Alliance (EOA).

“While the US administration decided to introduce countervailing duties against subsidised biodiesel from Argentina at the beginning of the year, the inaction of the EU leads to even greater volumes of Argentinian biodiesel entering the EU,” EOA president Arnaud Rousseau said.

Some 1.5M tonnes of Argentinian soya biodiesel had entered the EU between September 2017 and July 2018, according to the EOA.

The EU cut its import duties on Argentine biodiesel at the end of September 2017 after a World Trade Organisation ruling in favour of Argentina. In response, the European Biodiesel Board launched a challenge and asked the EU for an investigation into Argentina’s alleged subsidies, with a final decision due in February.

“The Commission’s preliminary conclusions are that Argentinian [biodiesel] imports into the EU are subsidised and there appears to be a threat of material injury to the Union industry,” the EC said in a document.

Argentina provided support to its industry through a set of measures, including export duties on soyabeans, a biodiesel feedstock, that depressed prices to an artificially low level to the advantage of the downstream biodiesel industry, the EC added.

“However, the Commission finds it necessary to collect further information on developments … and will continue its investigation without the imposition of provisional measures.”

Reuters said that the EU’s removal of duties on low-price biodiesel from Argentina and Indonesia last September had led to major major producers such as Bunge and Archer Daniels Midland Co cutting output or closing plants in the EU.

French biodiesel maker Saipol, the EU’s largest producer and part of oilseed group Avril, cut production for six months in March, although it returned to full capacity in June due to high petroleum prices and increasing demand.