The US Department of Commerce made on 22 August a preliminary countervailing duty determination on Argentine and Indonesian biodiesel imports after finding the countries to be in violation of international trade rules by subsidising their producers.

In addition, the department determined that the imports had caused ‘critical circumstances’ in the USA, which could open the door for retroactive duties going back to May 2017.

The ruling will require importers of Argentine and Indonesian biodiesel to pay cash deposits on the imported fuel, ranging from 50.29% to 64.17% on Argentine and 41.06% to 68.28% on Indonesian biodiesel depending on the particular producer and/or exporter.

The cash deposit requirements would be imposed once the preliminary determination was published in the Federal Register, expected to happen during the week starting on 28 August.

Due to the ‘critical circumstances’ ruling, the deposit rates would apply retroactively 90 days back from the date of the Federal Register filing.

Doug Whitehead, chief operating officer of the US trade association National Biodiesel Board (NBB), said the industry was grateful the Commerce Department made its determination and that it would “level the playing field”.

“The Commerce Department has recognised what this industry has known all along – that foreign biodiesel producers have benefited from massive subsidies that have severely injured US biodiesel producers,” Whitehead said in an NBB statement.

The NBB Fair Trade Coalition filed in April a petition with the Department of Commerce to impose antidumping duties against Argentina and Indonesia, followed by a second petition in July, which claimed that biodiesel imports from the two countries had caused critical circumstances for the US industry.

The association claimed that Argentine and Indonesian imports surged by a tremendous 464% between 2014 and 2016 – accounting for 18.3% of the total US market share – with Argentine imports spiking another 144.5% following NBB’s original investigation petition.

“These surging, low-priced imports prevented producers from earning adequate returns on their substantial investments and caused US producers to pull back on further investments to serve a growing market,” NBB alleged.

The Department of Commerce would now audit the foreign producers and governments to confirm the accuracy of their data submissions before making its final decision on the countervailing duties, with a preliminary decision on related antidumping duties expected in October.

Final determinations were projected for later this year or early 2018, with a final decision by the International Trade Commission to follow soon after.