Bunge to cut biodiesel output at 120k mt/yr Mannheim plant
Commodities producer and trader Bunge is to cut production at its 120,000 mt/year capacity biodiesel plant in Mannheim, Germany in response to a flood of imports, the company confirmed in an email.
Bunge will further cut production at the plant in view of an increase in cheap imports into the EU following a lowering of import duties late last year.
"We expect to initially cut production by 50% in Q2. Afterwards we will review production periodically and adjust as necessary," a spokeswoman for Bunge said in an email, without specifying the current production figure.
The surge in biodiesel imports was also stoked by rulings from the World Trade Organisation and the European Court of Justice that the duties imposed by the EU were unjustified.
Bunge uses rapeseed oil as the main feedstock for the Mannheim biodiesel plant, which the conglomerate took control of in 2013.
In 2016 Bunge discontinued biodiesel production at its 95,000 mt/year plant in Bruck, Austria.
Last week, US commodities conglomerate ADM said that its 275,000 mt/year capacity plant in Mainz, Germany would cease production for the entire second quarter this year, a decision it said would be reviewed during the July-September period.
Low export taxes and other government incentives enable Argentinian and Indonesian companies to sell biodiesel in Europe at $50 to $60 a tonne cheaper than EU biodiesel producers can buy raw materials such as rapeseed oil, Claus Sauter, chief executive of German biofuels producer Verbio AG last week told Reuters.
He added that several hundred thousand tonnes of imported biodiesel, which are based mainly on soy oil and palm oil, had been stockpiled in Europe for use in the non-winter months, which could drive smaller producers out of business.
Germany’s consumption of biodiesel rose in 2017 compared with 2016 as tighter CO2 targets for biofuels increased consumption of products based on feedstocks such as used cooking oil, which have a lower carbon footprint than bioethanol.
New duties on the way
Germany’s exports of biodiesel were up 4.4% in 2017 compared with the previous year, but most of this gain took place before imported biodiesel started flowing into Europe.
The EU is expected to recalibrate its anti-dumping duties to a lower level than the level that was struck down by the ECJ and WTO.
Last year, the EU cut anti-dumping duties to between 4.5% and 8.1% for Argentinian biodiesel from the original rates of 22%-25.7%, while the rates for Indonesian product were retained at those set in 2013 - between 8.8% and 20.5%.