Natural Energy West cuts biodiesel output at 240k mt/yr German plant

9 Apr 2018 |

German biodiesel producer Natural Energy West (NEW) said April 9 it will halve output at its 240,000mt/year plant in Marl, citing the impact of cheap imports from Argentina and Indonesia in the wake of rulings on EU antidumping duties.

NEW is the third German biodiesel producer in the space of a month to curtail output in response to sharply rising imports and weakening prices, which have squashed margins at many EU plants, particularly those that use domestically-produced rapeseed oil as a feedstock.

"The reduced production only keeps the company up to service existing supply contracts for biodiesel and the by-product pharmaceutical grade glycerine," the company said in a German language statement.

Around 800,000 mt of Argentine-origin biodiesel was exported to the EU during the second half of 2017, a period during which the World Trade Organisation ruled against the EU's antidumping duties and the EU lowered tariffs in expectation of a negative ruling by the ECJ.

Last year the US used tariffs to effectively block imports of Argentine biodiesel, prompting many producers in the Latin American country to eye European markets instead. 

The flood of extra supply has been the main factor in a 20% fall in fatty methyl ester FAME 0 prices since late last year, prompting many producers, particularly those in Germany, to reassess production levels and call for government action.

"We urge the federal government to stand up for the German biodiesel industry and related jobs and to put a stop to ruinous trade practices in Argentina and Indonesia," said NEW's CEO Detlef Volz in the statement.

EU recalibrates duties

Volz said that Argentina's government has enabled the country's biodiesel production to be offered below the prices of precursor soybean oil in Europe.

Indonesia is promoting its biodiesel production from palm oil in the same way, the CEO added.

The EU is expected within the next few months to impose new, recalculated antidumping duties on biodiesel imported from Argentina after it had to scrap the previous set of levies following the WTO and ECJ rulings.

NEW is owned by AGRAVIS Raiffeisen AG, a Dutch subsidiary of commodities conglomerate Bunge, D2I (Diester International Paris) and C. Thywissen.

Ruckus on the Rhine

Bunge said in late March it would cut output by 50% in Q2 at its 120,000mt/year biodiesel plant in Mannheim, while earlier that month ADM said it would suspend all production during Q2 at its 275,000mt plant in Mainz, which is also located near Germany's Rhine river.

Both companies cited the impact of cheap imports as the reason for the curtailments.

"If the federal government and the European Commission do not oppose the unfair trading practices of Argentina and Indonesia, European industry and upstream agriculture will be seriously damaged," warned Volz.

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