RTFA: UK decision on US renewable diesel imports risks domestic biodiesel production, energy security, jobs
The U.K.-based Renewable Transport Fuel Association expressed concern Sept. 15 following the U.K. government’s decision not to implement the Trade Remedies Authority’s recommended antisubsidy measures on imports of hydrotreated vegetable oil (HVO), also known as renewable diesel, from the United States.
Following an extensive investigation, TRA concluded that imports of U.S. renewable diesel were subsidized and had caused injury to the U.K. domestic biodiesel industry.
The TRA recommended an antisubsidy duty of approximately £260 (USD$348) per metric ton to level the playing field.
Despite the TRA’s findings on subsidy and injury, and its recommendation that a trade remedy should be imposed, Jonathan Reynolds, the U.K. secretary of state, has decided not to implement the measure, concluding it was not in the wider economic and public interest.
The RTFA said it believes the decision risks creating two serious long-term consequences for the U.K.
“First, it threatens the future of domestic biodiesel production and undermines the U.K.’s energy security and industrial resilience,” the group stated. “These should be national priorities. The EU recognizes this and already has measures in place to protect its domestic biofuel producers, and it is working on measures to further strengthen Europe’s energy security. Once strategically important production capacity is lost, investment to rebuild it again is highly unlikely.”
RTFA said greater dependence on imported fuels leaves the U.K. more exposed to international markets, overseas policy decisions and disruption to global supply chains.
“Second,” the group said, “this decision places further pressure on highly skilled, well-paid U.K. industrial employment. U.K. biodiesel plants support skilled manufacturing, engineering, technical, laboratory, logistics and operational roles, as well as employment throughout their domestic supply chains. These are precisely the kinds of productive industrial jobs that the U.K. needs to retain.”
The RTFA said it is particularly concerned by the precedent created when the U.K.’s trade-remedies system can establish both subsidization and injury to a domestic industry, recommend a remedy, yet government leaves that industry exposed to what it said is “unfair competition.”
“We ask the government to work with TRA and industry to assess whether the ‘Economic Interest Test’ adequately considers the risk of losing domestic production capacity, investment and domestic supply-chain resilience,” RTFA stated. “Ultimately, the RTFA is not seeking protection from legitimate international competition. What our members want is a level playing field where U.K. producers and overseas suppliers compete on fair and equivalent terms. Open competition can benefit the U.K. renewable fuels market, but that competition must not be distorted by overseas subsidies that place domestic manufacturers at a structural disadvantage.”
Dickon Posnett, the director of corporate affairs for biodiesel producer Argent Energy, said, “As a company that has, in good faith and in response to government stated wishes, invested in U.K. manufacturing to use U.K. wastes and offset dependence on foreign imports of fuels, we are shocked by the government’s decision to put foreign imports ahead of U.K. manufacturing. The secretary of state’s announcement has made it clear that he believes it is in the country’s economic interest to accept long-term harm to, and quite possibly the loss of, renewable fuel investments in U.K., and rather to encourage the short-term reliance on imports from the U.S. that in turn rely on heavy government grants. This is a resounding message from the government and one that will not be received well by anyone considering investment in manufacturing.”
RTFA Chief Executive Alex Wolfe added, “The issue here is much bigger than the price of a ton of biodiesel today. It is about what sort of renewable fuels industry we want the U.K. to have in five, 10 or 20 years. We need more clean-fuel production capacity, not less. The RTFA is not asking government to shield U.K. producers from competition. We are asking for a level playing field. British manufacturers are ready to compete with renewable fuel producers anywhere in the world, but they should not be expected to compete against the financial advantage created by overseas subsidies. We therefore urge Jonathan Reynolds and the government to consider not simply the immediate economics of imported fuel, but the long-term value to the U.K. of maintaining and growing domestic renewable fuel production, skilled employment, investment and energy security. Our objective is straightforward—fair competition, a level playing field and a strong U.K. renewable fuels sector capable of investing for the future.”
