The year 2010 could see a trade dispute with Argentina over biodiesel. The European Biodiesel Board (EBB) is calling for a level-playing field to be restored with Argentine biodiesel producers. This follows a sharp increase in monthly biodiesel exports from Argentina to the EU, from less than 5,000 tonnes in July 2008 to almost 100,000 tonnes in July 2009. The EBB expects a final annual increase of 1,300%, from just 70,000 tonnes in 2008 to over one million metric tonnes in 2009.

The European biodiesel association believes that the surge in Argentine biodiesel exports to the EU is being driven by differentiated export taxes (DETs). "This system creates a clear distortion, as it creates an artificial incentive for the production and export of the finished product biodiesel rather than its raw material - soybean oil," notes the industry association. The EBB believes that the practical tax differential between soybean oil and biodiesel is in the range of 20% when ad hoc implementing rules...

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