It’s been building for more than a year, and now, it looks like the war of words between the U.S. and European biodiesel communities will turn into a duty war.

This story from CNNMoney says Dow Jones Newswires has obtained a document that says the European Commission will place temporary duties on American biodiesel imported onto the continent starting March 12th, 2009:

The decision comes in response to complaints from the European Biodiesel Board, which represents the main producers in the E.U., that a subsidy the U.S. government gives to its biodiesel companies is unfairly harming the E.U. biodiesel market.

The EBB said the subsidy, which amounts to $1 per gallon of biodiesel, had encouraged U.S. companies to flood the E.U. market with their biodiesel, driving down prices and forcing E.U. producers to shut down production. The E.U. is by far the world’s largest consumer of biodiesel.

Last summer when the two sides were really clashing heading toward these duties, Manning Feraci, the National Biodiesel Board’s Vice President of Federal Affairs, responded to the Europeans’ charges of unfair trade practices:

“The allegations of harm leveled by the European biodiesel industry in these trade complaints are baseless. It is disingenuous and hypocritical that several of the European biodiesel companies that joined in the complaints are the very entities actively involved in the trade of U.S. biodiesel.

“The European biodiesel industry is not being harmed by U.S. competition. High feedstock costs, changes to EU member policies – and in some cases – poor business practices are the true issues facing European biodiesel producers. It is unfortunate that the European Biodiesel Board (EBB) has found it politically expedient to blame the U.S. biodiesel industry instead of focusing its efforts on the true challenges facing its membership.

Representatives of the American and European governments will get a chance to meet one more time on March 3rd before the duties are imposed with hopes of settling this dispute.