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EU starts year-long ‘surveillance’ of ethanol imports following industry request

The European Commission has introduced “surveillance” of fuel grade ethanol imports into the bloc, it said in a statement Nov. 4, in a measure designed to help the industry cope with changes in import patterns that have intensified during the coronavirus pandemic.

“In the context of the economic downturn caused by COVID-19, imports of bioethanol have significantly increased in the last months, at low prices,” the statement said.

“The European bioethanol industry has provided evidence that a further increase in imports would cause economic damage to the sector. The Commission has therefore taken immediate steps to enable tracking of import volumes, which will enable the bioethanol industry to better assess the situation.”

The surveillance of imports is not a measure that restricts imports, it added.

Fuel grade ethanol imports into the EU increased by 512% between 2017 and 2019, from 87,600 mt to 536,200 mt, a document published in the EU’s official journal on Nov. 3 said.

While renewable ethanol fuel grade consumption in the EU increased by 10% over 2017-2019 to reach 4.3 million mt, global production in 2019 stood at 87.5 million mt, thus “due to differences in market size even minor disturbances in the global market might have severe impacts on the offer in the EU in terms of quantities and prices,” the Commission added.

Information submitted to the commission by France also showed the main six fuel ethanol exporting countries into the EU undercut EU prices by 15% on average over 2019.

Following the EU’s lifting of antidumping measures on fuel ethanol in 2019, imports from the US, which accounts for over half of global fuel ethanol production, have increased steadily while Brazilian imports have significantly increased during 2020.

The new measure comes at a time when demand for fuel ethanol is seen weakening amid a tightening of lockdown measures across the EU. T2 Ethanol FOB Rotterdam prices have fallen 40% since reaching an all-time high in mid-September, according to S&P Global Platts data.

“COVID-19 market disturbances have created conditions that could accelerate the flow of imports into the EU — at unprecedented levels — once the crisis abates,” said Emmanuel Desplechin, secretary-general of ePURE, the European renewable ethanol association.

“In fact, due to the COVID-19 market disturbances, foreign fuel ethanol producers have accumulated significant stocks and are eager to sell them off by all means. Surveillance is a first step to collect information and monitor the evolution of imports…. The EU renewable ethanol industry stands ready to act to prevent further injury so as to preserve its sector and jobs throughout the EU,” said Desplechin.
Source: Platts

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