Challenge to Argentine Export Tax System

John Davis

asa_logo.jpgThe American Soybean Association (ASA) is filing a World Trade Organization challenge to Argentina’s export tax system… a system the ASA says turns out to be an unfair subsidy for Argentine biodiesel exports.

This story posted on Agriculture Online has details:

The Argentine export tax system favors biodiesel with lower export taxes for the fuel than for exports of raw soybeans, ASA’s president, John Hoffman of Waterloo, Iowa, told Agriculture Online.

“Right now there’s a huge advantage for crushers down there to export biodiesel,” Hoffman said. It amounts to $1.11 per gallon of biodiesel. Hoffman said it’s so profitable, that soybean crushers in Argentina are importing soybeans from Brazil and Paraguay.

So far, the biodiesel exports aren’t coming into the U.S., where biodiesel plants are already limiting production due to the high cost of vegetable oils. Hoffman said the Argentine biodiesel is mainly going to the European Union.

On the way, tankers of biodiesel stop by U.S. Gulf Coast ports, where as little as one percent petroleum diesel is blended in. That qualifies a load of biodiesel for the $1 dollar a gallon biodiesel tax credit intended for U.S. producers, said ASA spokesman Bob Callanan. That so-called “splash and dash” adds another $1 in subsidies, paid by U.S. taxpayers, for South American biofuel bound for Europe.

ASA officials are optimistic that they’ll be able to close the “splash and dash” loophole by stopping Congress from renewing it before it expires at the end of this year.

Biodiesel, International, Legislation