French oilseed processor Saipol, part of the Avril Group, plans to drastically reduce its biodiesel production and seed crushing in 2018 due to an influx of Argentine biodiesel into Europe.
The production cut, scheduled to start in February 2018, would affect all of the company’s five esterification plants in France, in addition to crushing activities at the same sites, Saipol said in a 6 October statement.
Production of rapeseed biodiesel would be cut by 60% with output falling from 1.3M tonnes in 2017 to a projected 700,000 tonnes in 2018, while crushing volumes were set to fall 30% from 3.5M tonnes in 2017 to 2.5M tonnes.
“These measures are necessary in order to preserve the competitiveness and future of crushing and esterification activities and the sale of biodiesel sourced from French agriculture and the employment associated with them,” Saipol stated.
The move came as a response to European Commission’s (EC) 28 September decision to cut anti-dumping duties on Argentine biodiesel from 22-25.7% to 4.5-8.1%, which Saipol said added further pressure on a market already suffering from deteriorating economic and regulatory conditions.
The company’s biodiesel sales had – in combination with production overcapacity and under-activity of its biodiesel production and crushing units – already declined significantly since the end of August.
According to the company, the duty cut, combined with Argentina’s own subsidies, removed all barriers to massive imports into Europe and gave Argentine biodiesel a competitive edge to which the French biodiesel sector had no response.
“Argentinian biodiesel is already being sold on the European market at a price that is much lower than that of the soyabean oil used to produce it, with a difference of up to US$60, and one that is equivalent to, or even slightly lower than, the price of raw rapeseed oil used to produce biodiesel in France,” Saipol said.
It estimated that up to 1.75M tonnes of soyabean biodiesel could be imported into Europe from Argentina annually and claimed that the French sector would not be able to deal with the competition if no effective countermeasures were implemented by the EC.
In addition to Argentine imports, the situation could be further exacerbated by a possible reduction of anti-dumping duties on Indonesia, the growth in the use of hydrotreated vegetable oils (HVO) in biodiesel production and the projected halving of the share of first generation biofuels in Europe’s energy mix by the revised European Renewable Energy Directive (RED).
However, Saipol said that it or its parent group had no plans to cease their pursuits in biodiesel production.