EU starts monitoring bioethanol to prevent import surge

Source: By Philip Blenkinsop, Reuters • Posted: Wednesday, November 4, 2020

BRUSSELS, Nov 4 (Reuters) – The European Union has begun monitoring incoming renewable ethanol used for fuel to see if measures are needed to prevent a surge of imports from U.S. and other producers, the EU official journal said on Wednesday.

The surveillance system, designed to provide information more rapidly than official statistics, will be in place for a year. It means imports need to be accompanied by a surveillance report.

EU demand, as elsewhere, collapsed due to the COVID-19 pandemic and any diversion of excess stocks in producing countries to the European Union could stifle a recovery for EU producers.

The EU responded to a similar threat of increased imports of steel with a surveillance system resulting in 2018 in quotas for certain grades and tariffs if those quotas are exceeded .

The EU journal said France had informed the European Commission, which coordinates trade policy for the 27-nation bloc, that imports of bioethanol increased by more than 500% between 2017 and 2019.

EU consumption of renewable ethanol for fuel increased by only 10% over the period. The French information also said imports undercut the prices of EU producers by an average 15%.

Some 84% of world production is in the United States and Brazil. Slight overcapacity in the United States has prompted countries including Brazil, China, Peru and Colombia to adopt measures to limit imports.

“Obviously, quantities previously exported from the U.S. to those markets might now be redirected to other markets as for example the EU market,” the EU journal said.

Anti-dumping measures on U.S. bioethanol expired in 2019.

European industry body ePURE said the introduction of surveillance measures was an important step towards preventing an import surge. (Reporting by Philip Blenkinsop;Editing by Elaine Hardcastle)