Federal appeals court upholds antidumping duties on Argentine biodiesel

A federal appeals court ruling Aug. 2 affirmed the Court of International Trade’s earlier decision upholding the U.S. Department of Commerce’s antidumping duties on Argentine biodiesel after appellant Louis Dreyfus Argentina S.A. brought the case before the court.

The trade case originated in 2017 when the National Biodiesel Board Fair Trade Coalition initiated an antidumping investigation with the commerce department alleging that biodiesel from Argentina was being sold at less than fair value in the U.S.

The year before, in 2016, Argentina shipped nearly 450 million gallons of biodiesel to the U.S., by which the coalition successfully argued the domestic industry was harmed.

“Clean Fuels and other members of the Fair Trade Coalition are pleased that the Court of Appeals for the Federal Circuit has upheld Commerce’s determination on trade duties,” Kurt Kovarik, vice president of federal affairs for Clean Fuels Alliance America—an organization formerly known as the National Biodiesel Board—told Biobased Diesel Daily. “Domestic biodiesel producers have been able to grow and meet U.S. demand for cleaner, better fuels over the past five years and will continue to work with Commerce to ensure fair trade conditions in future.”

LDC challenged two calculations the commerce department used to determine the antidumping duties—the export price and constructed value of biodiesel.

“Certain renewable fuels, such as the biodiesel at issue here, are entitled to tradeable tax credits,” federal circuit judge Hughes writes in the Aug. 2 decision. “In calculating export price, Commerce subtracted the value of these tradeable credits, calling the credits ‘price adjustments’ … Because the credits fall within the regulatory definition of a ‘price adjustment’ and substantial evidence supports the value Commerce used for the credits, we affirm Commerce’s export price calculation. Calculating constructed normal value of biodiesel in Argentina, Commerce used an international market price for soybeans, the primary input into biodiesel, because the price of soybeans in Argentina is subsidized. Commerce also addressed the same soybean subsidy through countervailing duties. LDC argues that correcting for the soybean subsidy in the export price creates an improper double remedy.”

The Court of International Trade affirmed the commerce department’s finding that the soybean subsidy is not passed through to export prices and affirmed its reasoning that the pass-through analysis showed that the department did not provide a double remedy.

LDC appealed the commerce department’s treatment of RINs as a price adjustment and its use of international soybean prices to correct for the soybean subsidy. LDC challenged the department’s legal authority to subtract the value of RINs from the export price as a “price adjustment.”

LDC also argued that substantial evidence does not support the commerce department’s finding that it could use the value of separated RINs on the spot market as a proxy for the value of attached RINs.

“Commerce found a particular market situation that reduced LDC’s soybean costs,” the decision reads. “Finding that LDC had not passed the reduced soybean price through to the price of biodiesel exported to the United States, Commerce chose to adjust the constructed value upward to match the value in the ordinary course of trade, using the clear statutory authority of 19 U.S.C. § 1677b(e). As a result of its particular market situation adjustment, Commerce arrived at a constructed value that approximates normal value based on sales of biodiesel in the ordinary course of trade. And use of this constructed value resulted in an adequate remedy for dumping, which is not duplicative of the countervailing duty remedy.”

As a result, the federal appeals court, like the commerce department, found that “there is no risk of double counting in this case” and therefore “need not address LDC’s argument that the statute does not allow Commerce to make an adjustment that results in a double remedy or that creates a risk of a double remedy. … Commerce demonstrated with substantial evidence that its constructed value calculation does not result in a double remedy. We affirm the constructed value.”

The court’s Aug. 2 opinion can be accessed here.