The EU's €62.30/t ($76.44/t) anti-dumping duty applied to ethanol imports from the US is scheduled to be removed in late February, but an appeal is in process that could extend the imposition by 18 months.

The duty, which works out at €49.47/m³ ($60.66/m³), was imposed for five years on 23 February 2012. If the appeal is not accepted the duty will no longer be imposed on US product from then.

Imports from outside the EU also have to pay a duty of €102/m³ for denatured product and €192/m³ for undenatured product. So US producers looking to export to the EU fuel-ethanol market will pay at least €151/m³ more than domestic producers.

The EU imposed the duty to defend domestic firms' market share. US firms produce ethanol at a significantly lower cost and much greater volumes.

In accordance with World Trade Organisation rules an appeal against the duty's lifting was put forward by industry lobby group ePure. The European Commission will assess whether there are grounds to extend the duty for 18 months while the evidence is reviewed. ePure expected to hear a decision from the commission by the end of 2017, but its position is still not known.

The European ethanol forward curve has already priced in the removal of the anti-dumping duty, so if the appeal is unsuccessful the arbitrage from US to Europe will remain closed and imports from the US are unlikely. If the duty is removed forward prices are still likely to drop slightly to ensure the arbitrage remains closed, a trader told Argus. Forward prices are unlikely to rise too much if the duty is extended, as the market remains considerably oversupplied for 2018.

Source: Argus Media