German biodiesel company cuts output after surge in EU imports

HAMBURG (Reuters) - German renewable fuel producer Natural Energy West is reducing biodiesel output by 50 percent because of surging European Union imports from Argentina and Indonesia, it said on Monday.

The output cut will be immediate and for an indefinite period, said the company, which produces about 240,000 tonnes of biodiesel a year at its plant in Marl and is jointly owned by German cooperative AGRAVIS, agribusiness Bunge, France’s Diester International and German oilseeds crusher C. Thywissen.

The move is the latest sign of problems in Europe’s biofuel industry after the EU’s March removal of duties on biodiesel imports from Argentina and Indonesia after legal proceedings at the European Court of Justice. The two countries had said the EU duties were unfair.

EU producers, meanwhile, say that biodiesel from Argentina and Indonesia gains unfair state support that allows it to be sold at low prices in Europe.

U.S. agribusiness group Archer Daniels Midland Co said on March 23 that was suspending production at a major biodiesel plant in Germany because of an increase in cheap imports.

Natural Energy West said its production cut is caused by “dumped biodiesel imports from Argentina and Indonesia, which have been flooding the European market since the winter”.

Production will continue only to meet existing contracts, it said.

“If the German government and the European Commission do nothing against the unfair trading practices undertaken by Argentina and Indonesia, the European (biodiesel) industry and the farming sector which supports it will face damage that threatens its existence,” said Natural Energy West CEO Detlef Volz.

Reporting by Michael Hogan; Editing by David Goodman