"Splash and Dash" under fire again. This time from the EU.

US Biofuel Energy Policy under fire.

In particular the practice of biodiesel crossing through US ports taking advantage of the federal blenders tax credit for biodiesel ($1.00 for virgin oil, $.50 for waste vegetable oil sourced biodiesels).

First US producers didn't think it was fair for foreign biodiesel producers to take the credit and flip the product to non US markets. Now EU producers don't think its fair that US firms manufacture the product for export as well.

I agree on both criticisms.

International Herald Tribune (reported by the AP)

The European Biodiesel Board — which represents 80 percent of EU producers — said "massive exports of unfair subsidized U.S. biodiesel" may break trade rules by undercutting European businesses and discouraging new output.

The EBB goes on to state:

"It is estimated that some 700,000 metric tons U.S. methyl ester (biodiesel) have entered the EU since January 2007 compared to only 90,000 tons for the whole 2006, meaning that the 1 million metric tons threshold could be reached before the end of this year." "This represents a sudden and sharp increase in U.S. exports which is only explainable by unfair support measures."

I agree with the complaint coming from the EBB. I disagree with the ultimate analysis though. Uber-expensive petroleum has a great deal to do with it as well. Got to blame the substitutablity of biodiesel with petroleum and the well developed markets of Europe as much as the US tax credits.