HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN"L 352/70
EN
Official Journal of the European Union
21.12.2012
COMMISSION DECISION
of 20 December 2012
terminating the anti-subsidy proceeding concerning imports of bioethanol originating in the United
States of America and terminating the registration of such imports imposed by Regulation (EU) No
771/2012
(2012/825/EU)
THE EUROPEAN COMMISSION,
in the USA were causing material injury to the Union
industry. The authorities of the USA were invited for
consultations with the aim of clarifying the situation as
Having regard to the Treaty on the Functioning of the European
regards the contents of the complaint and arriving at a
Union,
mutually agreed solution. The authorities of the USA
accepted the invitation and consultations were
Having regard to Council Regulation (EC) No 597/2009 of
subsequently held on 17 November 2011. During the
11 June 2009 on protection against subsidised imports from
consultations no mutually agreed solution was found.
countries not members of the European Community ( 1 ) (‘the
basic Regulation’), and in particular Articles 14 and 15 thereof,
1.2. PARTIES CONCERNED BY THE PROCEEDING
(5) An
information
document
containing
the
essential
facts
After consulting the Advisory Committee,
and considerations on the basis of which it was decided
not to impose provisional countervailing measures
Whereas:
(information document) was disclosed to interested
parties in August 2012. Several interested parties made
written submissions making their views known on these
1. PROCEDURE
findings. The parties who so requested were granted the
opportunity to be heard. The Commission continued to
1.1. INITIATION
seek information it deemed necessary for its definitive
findings. The oral and written comments submitted by
(1) On
25
November
2011,
the
European
Commission
('the
the interested parties were considered and taken into
Commission') announced, by a notice published in the
account, where appropriate.
Official Journal of the European Union (


2 ), the initiation of
an anti-subsidy proceeding ('AS proceeding' or 'the
proceeding') with regard to imports into the Union of
(6) All
parties
were
informed
of
the
essential
facts
and
bioethanol originating in the United States of America
considerations on the basis of which it was intended to
('USA' or 'the country concerned').
recommend the termination of both the anti-subsidy
investigation concerning imports of bioethanol orig
inating in the USA and the registration of such
(2) On
the
same
day,
the
Commission
announced
by
a
imports (
notice published in the Official Journal of the European

4 ). The parties were also granted a period
within which they could make representations
Union ( 3 ), the initiation of an anti-dumping proceeding
subsequent to this final disclosure.
with regard to imports into the Union of bioethanol
originating in the USA and commenced a separate inves
tigation ('AD proceeding').
Sampling of exporters/producers in the USA
(7)
In view of the potentially large number of exporters/pro
(3) The
AS
proceeding
was
initiated
following
a
complaint
ducers in the USA, sampling was envisaged in the notice
lodged on 12 October 2011 by the European Producers
of initiation in accordance with Article 27 of the basic
Union of Renewable Ethanol Association (ePURE) ('the
Regulation.
complainant') on behalf of producers representing more
than 25 %, of the total Union production of bioethanol.
The complaint contained prima facie evidence of
(8) In
order
to
enable
the
Commission
to
decide
whether
subsidisation of the said product and of material injury
sampling would be necessary and if so, to select a
resulting therefrom, which was considered sufficient to
sample, exporters/producers in the USA were asked to
justify the initiation of an investigation.
make themselves known to the Commission within 15
days from the date of the initiation of the investigation
and to provide, as specified in the notice of initiation,
(4)
Prior to the initiation of the AS proceeding and in
basic information on their activities related to bioethanol
accordance with Article 10(7) of the basic Regulation,
during the period from 1 October 2010 to 30 September
the Commission notified the authorities of the USA
2011 ('the investigation period' or 'the IP').
that it had received a properly documented complaint
alleging that subsidised imports of bioethanol originating
(9) The
relevant
US
authorities
were
also
consulted
for
the
selection of a representative sample.
( 1 ) OJ L 188, 18.7.2009, p. 93.
( 2 ) OJ C 345, 25.11.2011, p. 13.
( 3 ) OJ C 345, 25.11.2011, p. 7.
( 4 ) OJ L 229, 24.08.2012, p. 20.

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EN
21.12.2012 Official
Journal
of
the
European
Union L
352/71
(10) More
than
60
companies
made
themselves
known
and
companies. It was thus not possible to investigate all of
provided the requested information within the 15 days
them given the time available for the investigation. It was
deadline.
decided to re-examine the data available for the initial
sample. This examination led to the conclusion that the
sample should be based on the largest individual
(11) In
accordance
with
Article
27
of
the
basic
Regulation,
The Commission selected a sample based on the largest
producing entities and not on groups of producers
representative quantity of exports of bioethanol to the
taking also into account a certain geographical spread
Union which could reasonably be investigated within
amongst sampled producers.
the time available. The sample selected on that basis
consisted of five bioethanol producers and one trader.
(17) Hence,
a
definitive
sample
of
six
individual
producers
was ultimately selected based on representativity in
(12) The
investigation
also
showed
that
although
exporters
terms of the production and sales volume of bioethanol
mentioned exports to the Union in the sampling ques
during the IP and the geographical location of the
tionnaire they received, none of the sampled producers
producer. These producers represent 36 % of the total
exported bioethanol directly to the Union market but
estimated Union production and 44 % of the total
sold it to unrelated blenders/traders in the USA which
production reported by the companies that submitted
then blended it with gasoline and resold it. In order to
data for the selection of a sample. This sample was
identify their exports to the Union, the producers relied
deemed to be representative for the Union industry.
mainly on data they received from the unrelated
blenders/traders customers.
(18) Interested parties were given the opportunity to
comment on the appropriateness of the choice of the
(13) In
this
context,
it
should
be
noted
that
the
information
sample.
provided by the US authorities demonstrated that all
bioethanol sold in and exported from the United States
(19) Some parties claimed that the sample was less represen
benefitted from the main subsidy scheme, in particular
tative than the one originally selected which included
when it was blended with gasoline. It was the blending
groups of companies. In their view, an objective
activity and the sale of the taxable mixture that triggered
analysis of the situation of the Union industry could
the subsidization of bioethanol in the US. In the present
only be made by including all companies which are
case it was found that the main subsidy identified in the
part of groups in the sample. They alleged in particular
US was claimed by and granted to the blenders. The
that costs and revenues could be allocated to certain
companies selected in the sample were mainly
companies of a group which are not visited and may
producers of bioethanol and only to a smaller extent
thus not be included in the injury analysis.
were blending bioethanol and it was predominantly the
traders/blenders that also exported their products to the
Union that received the main subsidy based on the bioe
(20) In
this
respect
it
should
be
noted
that
the
Commission
thanol contained in the blends they were producing.
duly considered and examined the data provided by all
Consequently, the sample, which is mainly composed
non-sampled companies and in particular the companies
of producers of bioethanol which did not export
belonging to groups, in order to make sure that all costs
directly to the Union and which did basically not blend
and revenues involved in the production and sale by the
bioethanol into fuel mixtures, was not reliable for estab
companies selected had been fully and correctly reflected
lishing the level of subsidisation in the present case.
in the injury analysis. Furthermore, the six companies
finally selected producers represented 36 % of the total
1.2.1. Sampling of Union producers
estimated Union production and this was considered to

be representative for the purposes of Article 27 of the
(14) In view of the potentially large number of Union
basic Regulation.
producers, sampling was envisaged in the notice of
initiation in accordance with Article 27 of the basic
(21) Some parties contested the inclusion in the sample of
Regulation.
Union producers which were in a start-up phase. They
also claimed that one company with important idle
(15) In
the
notice
of
initiation
the
Commission
announced
capacity in 2011, located in a Member State that did
that it had provisionally selected a sample of Union
not implement the Renewable Energies Directive
producers. This sample consisted of five companies and
('RED'), should not have been included in the sample.
groups, out of the 19 Union producers that were known
Parties added that in case these companies would be
prior to the initiation of the investigation. The sample
finally included in the sample, the Commission should
was selected on the basis of the production volume of
adjust their data in order to account for these extra
bioethanol during the investigation period and the
ordinary circumstances.
location of the known producers. This sample repre
sented 48 % of the total estimated Union production
during the IP.
(22) It is considered that the fact that companies recently

started or resumed operations does not preclude them
from being part of the sample. The inclusion of these
(16) However, the investigation revealed that the groups
companies is not in contravention with the criteria for
included in the sample consisted of a large number of
the selection of a sample as laid down in Article 27 of
companies or single entities producing the like product.
the basic Regulation. With regard to the adjustment of
In this case it would have meant to investigate thirteen
their data, parties did not provide any specific issue or

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EN
Official Journal of the European Union
21.12.2012
substantiated evidence to support their claim, nor a basis
(29) The
Commission
sought
and
verified
all
the
information
on how to make the claimed adjustment. Furthermore,
provided by interested parties and deemed necessary for
the investigation did not reveal any cost, such as for
the purposes of a determination of subsidisation,
example accelerated depreciations, which should be
resulting injury and Union interest.
adjusted to correct any distortion due to the start-up of
activity. Hence, this claim is rejected.
(30) Verification
visits
were
carried
out
at
the
following
US
authorities:
(23) Some
parties
also
disputed
the
exclusion
from
the
sample
of one company that was provisionally selected and
Federal authorities of the USA
located in a Member State with high consumption and
production of bioethanol. They claimed that this
— Departament of Agriculture
company performed particularly well and alleged that
this was the reason for its exclusion from the sample.
— Departament of Commerce
They further argued that the selection of the sample had
been skewed towards finding injury. According to these
— Department of Energy
parties the Commission should have sent so called mini-
questionnaires to all producers to collect the relevant
data in order to select a sample. In this respect it
— Department of the Treasury
should be noted that the company in question
informed the Commission that it could no longer be
— International Trade Administration
included in the sample. Regarding the sending of mini-
questionnaires, it should be noted that, prior to the
— Office of the United States Trade Representative
selection of the sample, the Commission requested
information from all Union producers known to be
(31) Verification
visits
were
also
carried
out
at
the
premises
of
concerned in order to collect the relevant data for the
the following companies:
purpose of the selection of a sample. The above claims
were therefore rejected.
Exporters/producers in the USA
(24) Finally,
it
was
claimed
that
the
sample
should
have
— CHS Inc, Inver Grove Heights, Minnesota
included companies producing bioethanol from sugar
beet since production from this raw material can be
— Marquis Energy LLC, Hennepin, Illinois
much more profitable than production from, for
example, wheat. Even though this claim was not
— Patriot Renewable Fuels LLC, Annawan, Illinois
substantiated, the information available has shown that
bioethanol produced from sugar beet represents only a
— Plymouth Energy Company LLC, Merrill, Iowa
small part of total Union production, around 12 % in
2011 and that two of the companies included in the
— POET LLC, Sioux Falls, South Dakota
sample partially use sugar beet as feedstock to produce
bioethanol. Therefore, this claim was rejected.
— Valero Renewable Fuels Company LLC, San Antonio,
Texas
1.2.2. Sampling of unrelated importers
Producers in the Union
(25) In view of the potentially large number of importers
involved in the proceeding, sampling was envisaged for
importers in the notice of initiation in accordance with
— Abengoa Energy Netherlands B.V., Rotterdam, the
Article 27 of the basic Regulation.
Netherlands
— BioWanze, S.A., Wanze, Belgium.
(26) Only
three
importers
provided
the
requested
information
and agreed to be included in the sample within the
deadline set in the notice of initiation. In view of the
— Crop Energies Bioethanol GmbH, Mannheim,
limited number of cooperating importers, sampling was
Germany
not deemed to be necessary.
— Ensus, Yarm, United Kingdom
1.2.3. Questionnaire replies and verifications
— Lantmnnen Energi / Agroetanol, Norrkoping,
(27) The
Commission
sent
questionnaires
to
all
parties
known
Sweden
to be concerned. Questionnaires were thus sent to the
authorities of the USA, the sampled US exporters/pro
— Tereos BENP, Lillebonne, France
ducers, the sampled Union producers, the three
cooperating unrelated importers in the Union and to
Unrelated importers in the Union
all users known to be concerned by the investigation.
— Shell Trading Rotterdam B.V., Rotterdam, the
(28) Replies were received from the authorities of the USA,
Netherlands
the sampled US exporters/producers, the sampled Union
producers, two unrelated importers and four users.
— Greenergy Fuels Limited, London, United Kingdom

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EN
21.12.2012 Official
Journal
of
the
European
Union L
352/73
Users in the Union
schedule for Advanced Biofuels includes the schedule
for Cellulosic Biofuels, Biomass-Based Diesel, and
Undifferentiated Advanced Biofuels.
— Shell
Nederland
Verkoopmaatschappij B.V.,
Rotterdam, the Netherlands
(35) More
specifically,
Cellulosic
Biofuel
( 1 ) is defined as a
renewable fuel derived from any cellulose, hemicellulose,
or lignin that is derived from renewable biomass and that
1.3. INVESTIGATION PERIOD
has lifecycle GHG emissions, as determined by the EPA
Administrator, that are at least 60 % less than the
(32) The
investigation
of
subsidisation
and
injury
covered
the
baseline lifecycle GHG emissions. Cellulosic biofuels
period from 1 October 2010 to 30 September 2011.
include bioethanol. There are researches and pilot
The examination of trends relevant for the assessment
projects largely supported by the US Federal Government
of injury covered the period from January 2008 to the
for producing Advanced Biofuels and in particular
end of the IP (‘the period considered’).
cellulosic bioethanol, produced in particular out of agri
cultural and forestry wastes. According to US officials
and publicly available data ( 2 ), the production of this
2. PRODUCT CONCERNED AND LIKE PRODUCT
type of biodiesel will reach around 4 billion litres in
2014 and more than 50 billion litres by 2021.
2.1. PRODUCT CONCERNED
Production of cellulosic bioethanol was negligible in
the IP.
(33) The
product
concerned
is
bioethanol,
sometimes
referred
to as ‘fuel ethanol’, i.e. ethyl alcohol produced from agri
cultural products, denatured or undenatured, excluding
products with a water content of more than 0,3 %
(36) During
the
investigation
period
up
to
now
corn
has
been
(m/m) measured according to the standard EN 15376,
the main feedstock used in the USA, while the main
as well as ethyl alcohol produced from agricultural
feedstock used in the Union is wheat.
products contained in blends with gasoline with an
ethyl alcohol content of more than 10 % (v/v) originating
in the USA, currently falling within CN codes
(37) The
investigation
showed
that
bioethanol
is
generally
ex 2207 10 00,
ex 2207 20 00,
ex 2208 90 99,
sold in its pure form to blenders/traders which
ex 2710 12 11,
ex 2710 12 15,
ex 2710 12 21,
blend ( 3 ) it with gasoline in particular to produce high
ex 2710 12 25,
ex 2710 12 31,
ex 2710 12 41,
level blends which are exported or sold on the domestic
ex 2710 12 45,
ex 2710 12 49,
ex 2710 12 51,
market for further blending and consumption. Blending
ex 2710 12 59,
ex 2710 12 70,
ex 2710 12 90,
is not a very complex operation and may be accom
ex 3814 00 10, ex 3814 00 90, ex 3820 00 00 and
plished by mixing the products in special tanks adding
ex 3824 90 97.
the desired percentages of bioethanol and gasoline.
(38) To identify the various types of bioethanol, bioethanol
(34) Bioethanol
can
be
produced
from
various
agricultural
blends or mixtures in use around the world, ethanol fuel
feedstocks, such as sugar cane, sugar beet, potatoes,
mixtures have "E" numbers which describe the
manioc, and corn. In the USA a distinction on the
percentage of ethanol fuel in the mixture by volume.
basis of the various feedstocks is made, as described
For example, E85 is 85 % anhydrous ethanol and 15 %
below:
gasoline. Low ethanol blends, from E5 to E25, are also
known as gasohol, though internationally the most
common use of the term gasohol refers to the E10
(a) The Conventional Biofuel (mainly produced from
blend. Blends of E10 or less have been used in more
corn feedstock and commonly called corn ethanol)
than twenty countries around the world by 2011, led
which is defined as a renewable fuel derived from
by the USA, where almost all retail gasoline sold in
corn starch produced from facilities that
2010 was blended with 10 % of ethanol.
commenced construction after the date of
enactment (December 19, 2007) and which must
achieve in the future a 20 % reduction in greenhouse
(39) The
investigation
showed
that
all
types
of
bioethanol
are
gas ('GHG') emissions compared to baseline lifecycle
considered to be biofuels under the current National
GHG emissions of gasoline and diesel.
Renewable Fuel Standard program (RFS1) established
under the Energy Policy Act of 2005, which amended
the Clean Air Act by establishing the first national
(b) The Advanced Biofuel which is defined as a
renewable fuel standard. The U.S. Congress gave the US
renewable fuel other than ethanol derived from
Environmental Protection Agency (EPA) the responsibility
corn starch, which is derived from renewable
biomass and has lifecycle GHG emissions, as
( 1 ) See US Internal Revenue Code (IRC) – sec. 40(b)(4) point E.
determined by the Energy Policy Act ('EPA') Adminis
( 2 ) See www.ethanol.org – RFS (Renewable fuels standard) under the
trator, that are at least 50 % less than baseline GHG
Energy Independence and Security Act of 2007.
( 3 ) The investigation showed that to avail the alcohol mixture credit, as
emissions. This term includes "cellulosic biofuels"
defined in Sec. 40(b)(3) of the IRC in the USA it sufficed to blend
such as bioethanol and "biomass-based diesel." The
neat bioethanol with as little as 0,1 % of gasoline.

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to coordinate with the US Department of Energy, the US
(45) In this context, it is noted that the product concerned
Department of Agriculture, and stakeholders to design
should primarily be defined on the basis of its basic
and implement this program.
physical, technical and chemical characteristics and not
its uses or applications. A product which has various
applications may indeed have the same or similar basic
characteristics notwithstanding its further use and in
(40) As a result of the policy engaged in the USA for a
number of years for the promotion of bioethanol, the
certain circumstances it may be necessary to deepen
USA became the largest worldwide producer of bioe
the analysis of the product definition and the product
thanol as from 2005 accounting for 57,5 % of global
scope in the light of the specificity of the industry and
production. In 2009, the EPA announced that the
the market.
Renewable Fuel Standard will require most refiners,
importers and non-oxygenate blenders of gasoline to
displace around 10 % of their gasoline with renewable
fuels such as ethanol. That requirement aimed to ensure
(46) In the present case, it was clear that the notice of
that at least 11 billion US gallons of renewable fuels
initiation did not intend to cover synthetic ethanol in
would be produced in 2009, in particular to keep with
the product definition. Synthetic ethanol has different
the targets established by the Energy Independence and
characteristics than bioethanol and does not correspond
Security Act of 2007 (EISA) but also to export to other
to the above criteria linked to the definition of the
markets.
product concerned. There is no producer that focusses
on the production of that product which took part in
this investigation. Therefore, synthetic ethanol cannot be
included in the definition of the product concerned and
(41) Based
on
official
sources,
market
and
publicly
available
is outside the scope of the investigation.
information ( 1 ), all types of bioethanol and bioethanol
contained in blends, namely mixtures of bioethanol
with mineral gasoline, which are produced and sold in
the USA and exported are considered to be bioethanol
(47) During the investigation of operators in the US and in
fuels and are part of a legislative package concerning
the Union, no questions regarding possible problems for
energy efficiency and renewable energy and alternative
distinguishing bioethanol for fuel application and bioe
fuels in the USA.
thanol destined to other applications were raised and
thus no relevant evidence could be examined. The inves
tigation confirmed that subsidization in the USA is
(42) It
has
been
found
that
all
types
of
bioethanol
and
bioe
intended for fuel bioethanol, namely bioethanol
thanol in blends covered by this investigation, despite
included in a fuel mixture and the investigation of
possible differences in terms of feedstock used for the
Union producers focussed on bioethanol destined to
production, or variances in the production process, have
fuel applications and not for other uses.
the same or very similar basic physical, chemical and
technical characteristics and are used for the same
purposes. The possible minor variations in the product
concerned do not alter its basic definition, its character
2.2. LIKE PRODUCT
istics or the perception that various parties have of it.
(48) It
was
found
that
bioethanol
manufactured
by
the
Union
industry and sold on the Union market have similar basic
physical, chemical and technical characteristics when
(43) Some
parties
claimed
that
the
definition
of
the
product
compared to bioethanol exported to the Union from
concerned was not clear, in particular because it did not
the USA.
allow for distinguishing the bioethanol for fuel appli
cations from that destined for other applications.
Hence, they claimed that the investigation should cover
ethanol for all uses and ethanol from all sources,
including synthetic ethanol that competes with bioe
(49) As
described
in
recital
(34)
above,
bioethanol
can
be
produced from various feedstocks. However, the investi
thanol for industrial use.
gation did not show that the feedstock used would lead
into any differences in the end product. It was found that
the product concerned produced in the USA and
(44) Another
party
claimed
the
opposite,
namely
that
the
exported to the Union is interchangeable with that
investigation should only cover bioethanol for fuel appli
produced and sold in the Union by Union producers.
cations and that bioethanol for industrial use should thus
In addition, there are no significant differences in the
be excluded.
uses and the perception by operators and users in the
market.
( 1 ) For instance (a) The information published by the American
Coalition for Ethanol (ACE) on the web (b) the Energy Policy Act
(EPA) of 2005, in particular P.L. 110-58 (c) the Energy Inde
pendence and Security Act of 2007 (P.L. 110-140, H.R.6) which
(50) It
is
therefore
concluded
that
bioethanol
produced
and
amended and increased the Renewable Fuels Standard (RFS)
sold in the Union and the product concerned should be
requiring 9 billion gallons of renewable fuels use in 2008 and
13,9 billion gallons in 2011, (d) fact sheets issued by the US
considered to be alike within the meaning of Article 2(c)
Department of Energy under the Clean cities actions, etc.
of the basic Regulation.

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EN
21.12.2012 Official
Journal
of
the
European
Union L
352/75
3. SUBSIDISATION
(d) Nebraska Ethanol Production Tax Credit
3.1. INTRODUCTION
(e) South Dakota Ethanol Production Incentive
(51) On the basis of the information contained in the
complaint and the replies to the Commission's question
naires, the following Federal Schemes, which allegedly
3.2. FEDERAL SCHEMES
involved the granting of subsidies, were investigated:
3.2.1. Fuel mixture tax credits - Excise Tax/Income
Tax credits
Federal Schemes
(a) Legal basis
(a) Fuel mixture tax credits - Excise Tax/Income Tax
(53) Title 26 U.S.C – Internal Revenue Code - sections 6426
credits
and 6427 is the legal basis for the fuel mixture tax credit
('mixture tax credit') on bioethanol.
(b) Small producer income tax credit
(b) Eligibility
(c) Income tax credit for producers of cellulosic bioe
thanol
(54) In order to be eligible for the mixture tax credit in the IP,
persons were required to create a mixture of bioethanol
(d) The US Department of Agriculture Bioenergy
with a taxable fuel (gasoline, diesel fuel or kerosene),
Program
which would then be used as a fuel or sold for use as
a fuel. For such persons (blenders), the credit was
0,45 USD per gallon of bioethanol blended in a taxable
(e) USDA Bioenergy Program for Advanced Biofuels
fuel.
(f) USDA Biorefinery Assistance Program
(55) The
producers
of
bioethanol
can
only
claim
the
incentive
when they are themselves performing a blending activity.
(g) USDA Biomass Crop Assistance Program
The producer must blend the unmixed bioethanol with
e.g. gasoline. Companies that do not produce but rather
(h) USDA Rural Energy for America Program
purchase unmixed bioethanol and blend it into a bioe
thanol mixture are also entitled to the mixture tax credit.
In terms of entitlement to the incentive, there are no
(i) Department of Energy Biorefinery Project Grants
differences between blended bioethanol destined for
domestic sales and export sales.
(52) On the basis of the information contained in the
complaint and the replies to the Commission's question
(c) Practical implementation
naires, the following State Schemes, which allegedly
involved the granting of subsidies, were also investigated:
(56) It is thus the activity of blending that triggers the eligi
bility for the mixture tax credit. The amount of the
State Schemes
subsidy granted for a blended fuel depends on the
proportion of bioethanol it contains. The subsidy can
be claimed either as a credit against excise tax liability
(a) Illinois State Bioethanol Incentives
or income tax liability or as a direct cash payment.
(i) Illinois Biofuels Production Facility Grants
(57) During the IP, the mixture tax credit was predominantly
(more than 90 %) claimed as an excise tax credit by a
(ii) E85 Infrastructure Grants
blender on Schedule C of Form 720, 'Quarterly Federal
Excise Tax Return'. The credit was allowed to the extent
(b) Iowa
of fuel tax liability and would be claimed on this form by
anyone subject to tax on gasoline, e.g. in a situation
where the blending of bioethanol and gasoline took
(i) Iowa Alternate Energy Revolving Loan Program
place within the storage terminal before the taxation of
gasoline.
(ii) Biofuels Infrastructure Grants
(58) The
blender
could
also
claim
a
refundable
income
tax
(c) Minnesota State Bioethanol Incentives
credit or direct payment instead of an excise tax credit,
but only for the amount by which the excise tax credit
(i) Minnesota Cellulosic Ethanol Investment Tax
exceeded the total excise tax liability, i.e. the amount by
Credit
which the maximum subsidy allowable for the mixture
exceeded the credit allowed on Form 720. It should be
noted that the excise tax credit could exceed excise tax
(ii) E85 Fueling Infrastructure Grants
liability if, for example, the gasoline used to make the

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Official Journal of the European Union
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mixture was taxed before it was acquired by the blender.
would trigger the mixture tax credit. It should be noted
In such cases claims could be made on Form 8849,
that the mixture tax credit (Excise Tax /Income tax credit)
'Claim for Refund of Excise Taxes'.
for bioethanol had been in existence since 1980, i.e. for
more than 30 years, and expired at the end of December
2011 (post-IP).
(59) The mixture tax credit was non-cumulative, i.e. it
remained the same whether the subsidy was claimed as
an excise tax credit, an income tax credit, a direct
(64) The
investigation found that two companies in the
payment to the taxpayer or any combination of the fore
sample made claims for the mixture tax credit in the
going. Claims for payment were made either on Form
IP. However, for both companies the subsidies obtained
8849, Schedule C of Form 720 or in case of the
were insignificant.
refundable income tax credit on Form 4136, 'Credit for
Federal Tax Paid on Fuel', which was attached to the
claimant's income tax return. It should be noted,
however, that the total amount of the subsidy could
(65) Nevertheless,
when
comparing
the
total
production
of
not exceed 0,45 USD per gallon of bioethanol.
bioethanol in the USA during the IP with the total
quantity of bioethanol receiving a mixture tax credit, it
is clear that all bioethanol produced in the USA in the IP
benefitted from a subsidy under this scheme. This is also
confirmed by the statistics provided by the relevant US
(60) A
non-refundable
income
tax
credit
was
also
available
to
authorities.
bioethanol blenders during the IP. This non-refundable
income tax credit on a quantity of fuel available to a
blender was reduced by the amount of the excise tax
credit claimed with respect to that same quantity of
(66) On
this
basis,
the
findings
of
investigation
clearly
showed
fuel. In other words, a blender could not claim both
that all bioethanol was subsidised through this mixture
the excise tax credit and the non-refundable income tax
tax credit during the IP.
credit for the same quantity of bioethanol blended with
gasoline. When applying for the non-refundable income
tax credit the producer had to declare that he had not
claimed the excise tax credit for the same quantity of
bioethanol.
(d) Conclusion
(67) The investigation showed that during the IP, all the US
produced bioethanol benefitted from the mixture tax
credit. This mixture tax credit has to be regarded as a
(61) The
mixture
tax
credit
can
only
be
claimed
once
for
the
fiscal incentive whether or not it is given to be offset
same quantity of bioethanol used to make a mixture, i.e.
against tax liabilities or as a cash payment.
either by the producer who blends himself or by a
purchaser who is undertaking the blending activity. In
both cases the blender is entitled to a 0,45 USD per
gallon tax credit for the number of gallons of bioethanol
(68) This scheme is considered to be a subsidy in the sense of
used in producing a mixture.
Article 3(1)(a)(i) and Article 3(1)(a)(ii) of the basic Regu
lation as the scheme provides a financial contribution by
the Government of the USA in the form of direct grants
(cash payments) and revenue foregone which is otherwise
due (tax offset). The subsidy confers a benefit to the
(62) The
investigation
showed
that
in
the
majority
of
cases
companies receiving them.
the one claiming the subsidy ('the claimant') was a
blender/trader with excise tax liabilities such as a petro
chemical company. Indeed, blending will depend on a
number of factors such as the available tank capacity
as well as the geographical location of available bioe
(69) The
scheme
is
limited
to
companies
that
are
involved
in
thanol and gasoline respectively. In most cases it
the bioethanol industry i.e. the blending of bioethanol,
appeared that the producer of bioethanol did not claim
and is therefore considered to be specific under
the mixture tax credit. In fact it is clear that the blending
Article 4(2), first sub-paragraph, point (a) of the basic
in most cases took place in terminals or terminal racks.
Regulation and therefore countervailable.
In this respect, it appears that the claimant was in the
majority of cases a person with excise tax liability.
(e) Calculation of the subsidy amount
(70) The bioethanol mixture tax credit was granted by
(63) The
market
for
unmixed
bioethanol
as
an
end-use
was
reference to the quantities of bioethanol used in a
not big and it therefore made economic sense to blend
blend, i.e.0,45 USD per gallon of bioethanol blended in
the bioethanol produced and make a mixture which
a taxable fuel.

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(71) It is considered that the amount of subsidy is 0,45 USD
(77) The
scheme
is
limited
to
companies
that
produce
bioe
per gallon on a country-wide basis as the total
thanol, and is therefore considered to be specific under
production of US bioethanol, including exports of bioe
Article 4(2), first sub-paragraph, point (a) of the basic
thanol to the Union, ultimately would have benefitted
Regulation and therefore countervailable.
from the bioethanol mixture credit. It is therefore not
necessary to differentiate between economic operators,
in particular as the subsidy is rarely granted to
producers of bioethanol but predominantly to operators
(78) Statistics
provided
by
the
US
authorities
showed
overall
who blend the bioethanol with e.g. gasoline.
very little use of the small producer's income tax credit in
contrast to claims made for the mixture tax credit. A
comparison of the total amount claimed under this
incentive in relation to the total production of bioethanol
3.2.2. Small producer income tax credit
showed insignificant overall subsidisation during the IP.
(a) Legal basis
3.2.3. Income tax credit for producers of cellulosic
(72) Title 26 U.S.C Internal Revenue Code, section 40 is the
bioethanol
legal basis for the small producer income tax credit.
(a) Legal basis
(79) Title 26 U.S.C Internal Revenue Code, section 40 is the
(b) Eligibility
legal basis for the income tax credit for producers of
cellulosic bioethanol.
(73) This
scheme
is
only
available
to
small
producers
of
bioe
thanol. A small producer is defined as any person whose
production capacity does not exceed 60 million gallons
of bioethanol per year. During the IP a small producer
(b) Eligibility
could claim a non-refundable, general business income
tax credit of 0,10 USD for each gallon of bioethanol
(80) This
scheme
is
only
available
to
producers
of
cellulosic
produced. Any blender or trader who purchases but
bioethanol.
does not produce bioethanol is not eligible for the
credit. In addition, to be eligible for the credit, the
production may not exceed 15 million gallons in any
(c) Practical implementation
taxable year and the bioethanol produced must be used
as a fuel, sold for use as a fuel, or used to create a
(81) Claims
for
the
income
tax
credit
are
made
annually,
as
mixture of bioethanol and a taxable fuel that is
part of the claimant's income tax return.
subsequently used as a fuel or sold for use as a fuel.
(82) Prior to 1 January 2012 the credit available was
0,46 USD per gallon of cellulosic bioethanol produced.
(c) Practical implementation
As of 1 January 2012 the credit increased to 1,01 USD
per gallon.
(74) Claims
for
the
small
producer
income
tax
credit
are
made
annually, as part of the claimant's income tax return. The
credit for each gallon of bioethanol produced by the
claimant during the relevant tax year, up to a
(d) Conclusion
maximum of 15 million gallons, is offset against the
claimant’s liability for corporate income tax. If the clai
(83) This scheme is considered to be a subsidy in the sense of
mant’s tax liability is less than the amount of credit
Article 3(1)(a)(ii) of the basic Regulation as the scheme
claimed, the excess amount can be carried forward to
provides a financial contribution by the Government of
subsequent tax years.
the USA in the form of and revenue foregone which is
otherwise due. The subsidy confers a benefit to the
companies receiving them.
(75) Due
to
the
eligibility
criteria,
only
two
companies
in
the
sample benefitted from this scheme during the IP.
(84) The
scheme
is
limited
to
companies
that
produce
bioe
thanol, and is therefore considered to be specific under
Article 4(2), first sub-paragraph, point (a) of the basic
Regulation and therefore countervailable.
(d) Conclusion
(76) This scheme is considered to be a subsidy in the sense of
Article 3(1)(a)(ii) of the basic Regulation as the scheme
(85) There
were
no
claims
for
the
income
tax
credit
from
provides a financial contribution by the Government of
producers of cellulosic bioethanol during the IP which
the USA in the form of revenue foregone which is
coincides with the lack of commercial production of
otherwise due. The subsidy confers a benefit to the
cellulosic bioethanol up to the end of the IP. In these
companies receiving them.
circumstances, no subsidy amount was calculated.

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3.2.4. The US Department of Agriculture Bioenergy
gation confirmed that this was not the case. The scheme
Program
as described above expired in 2006.
(a) Legal basis
(d) Conclusion
(86) The
US
Department
of
Agriculture
('USDA') Bioenergy
Program was originally authorized and funded by the
(94) It
was
found
that
the
scheme
was
terminated
in
June
USDA's Commodity Credit Corporation ('CCC') under
2006 and that no subsidies were provided during the IP.
its general authority under Section 5 of the CCC
Charter Act.
3.2.5. USDA Bioenergy Program for Advanced
Biofuels
(87) The
scheme
was
in
operation
from
1
December
2000
to
June 2006. It was administered by USDA's Farm Service
(95) The
Bioenergy
Program
for
Advanced
Biofuels
(generally
Agency (FSA).
referred to as the 'Advanced Biofuel Payment Program')
provides production-based payments to eligible
producers of 'advanced biofuels'. According to the US
(b) Eligibility
authorities, 'advanced biofuels' are specifically defined
to exclude fuel derived from corn which is the main
(88) When
the
program
was
in
operation,
all
commercial
feedstock for US bioethanol production.
bioenergy producers were eligible to participate.
Producers were required to provide evidence of
production, as well as evidence of the purchase and
(a) Legal basis
use of agricultural commodities related to that
production. In particular, bioethanol producers were
(96) Title
IX,
Section
9005
of
the
Farm
Security
and
Rural
required to produce and sell bioethanol commercially.
Investment Act of 2002 (2002 Farm Bill) as amended by
Title IX, Section 9001 of the Food, Conservation, and
Energy Act of 2008 is the legal basis for the Bioenergy
Program for Advanced Biofuels.
(89) To be eligible, a producer had to meet certain
requirements with regard to the keeping of records and
to provide required information, as well as granting
permission to CCC to verify such information. The
(b) Eligibility
relevant regulations set forth the details of the procedures
(97) An
applicant
must
be
an 'advanced biofuel producer'.
to be followed for signing up for the program, appli
The term 'advanced biofuel producer' is defined as: 'An
cations for payments and reporting procedures that
individual, corporation, company, foundation, associ
claimants were required to follow in order to be
ation, labor organization, firm, partnership, society,
eligible for payments.
joint stock company, group of organizations, or non-
profit entity that produces and sells an advanced
biofuel. An entity that blends or otherwise combines
(c) Practical implementation
advanced biofuels into a blended biofuel is not
considered an advanced biofuel producer under this
(90) In
each
fiscal
year
bioethanol
producers
could
sign
up
for
Program'.
the scheme by submitting the relevant forms. After
signing up, bioethanol producers submitted quarterly
applications for payment. The bioethanol producers had
(98) Advanced
biofuel
is
defined
in
Section
9001
of
the
Food,
to provide documentation of their net purchases of
Conservation, and Energy Act of 2008 as 'fuel derived
eligible commodities and net production of bioethanol
from renewable biomass other than corn kernel starch'.
during the relevant periods.
According to this Act, advanced biofuels specifically
include:
(91) The
scheme
provided
payments
to
bioethanol
producers
based on a combination of their base bioethanol
— Biofuel derived from cellulose, hemicellulose, or
production and increased bioethanol production in the
lignin;
corresponding period of the previous fiscal year. For
fiscal year 2006, companies only received incentives
from increased bioethanol production.
— Biofuel derived from sugar and starch (other than
ethanol derived from corn kernel starch);
(92) As
the
scheme
was
terminated
in
June
2006,
none
of
the
companies in the sample received incentives under this
— Biofuel derived from waste material, including crop
scheme during the investigation period.
residue, other vegetative waste material, animal waste,
food waste and yard waste;
(93) There
appears
to
have
been
confusion
about
whether
this
scheme was re-introduced for the fiscal year 2009
— Diesel-equivalent fuel derived from Renewable
(October 2008-September 2009). However, the investi
Biomass, including vegetable oil and animal fat;

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— Biogas produced through the conversion of organic
(a) Legal basis
matter from Renewable Biomass;
(106) Title IX, Section 9003 of the Farm Security and Rural
Investment Act of 2002 (2002 Farm Bill) as amended by
— Butanol or other alcohols produced through the
Title IX, Section 9001 of the Food, Conservation, and
conversion of organic matter from Renewable
Energy Act of 2008 is the legal basis for the Biorefinery
Biomass; and
Assistance Program.
— Other fuel derived from cellulosic biomass.
(b) Eligibility
(107) The program is administered by a branch of the
(c) Practical implementation
Department of Agriculture. It offers loan guarantees to
eligible applicants in support of the development and
(99) Bioethanol
producers
can
benefit
from
this
scheme.
In
construction of commercial-scale biorefineries using
order to eligible for payments, the producers must
eligible technology, or the retrofitting of existing facilities
maintain records for all relevant fiscal years and
with eligible technology. To be eligible for the scheme, a
quarters. Such records include documentation for
given project must use a technology adapted for a viable
purchase of feedstock, production of bioethanol, price
commercial-scale operation or it has to be demonstrated
and quantity of bioethanol sold. Producers receive
to have technical and economic potential for commercial
direct payments from the Government.
application in a biorefinery that produces advanced
biofuel. The project must use an eligible feedstock for
the production of advanced biofuels and bio-based
(100) The scheme provides payments to bioethanol producers
products. Examples of eligible feedstocks include, but
based on a combination of their actual production and
are not limited to, renewable biomass, biosolids, treated
incremental production, i.e. the increase in production
sewage sludge, and by-products of the pulp and paper
compared to the previous year. Actual production
industry. The majority of an eligible biorefinery's
payment rates are calculated quarterly for the amount
production must be of advanced biofuels.
of actual advanced biofuel produced each quarter. Incre
mental production payments are made for the quantity
of eligible advanced biofuel produced in a fiscal year by
(c) Practical implementation
an eligible producer that exceeds the quantity produced
in the prior fiscal year.
(108) Bioethanol producers can benefit from this scheme if
they meet the eligibility criteria and provided that
sufficient Government funds are available. A project
(101) The end-product is exactly the same regardless of
must have technical merit and the borrower must meet
whether the bioethanol is derived from the feedstock
certain financial criteria set out in relevant legislation.
mentioned in recital (98), or whether it has been
There must also be reasonable assurance that the loan
produced from corn which is the main feedstock for
being guaranteed will be repaid.
US bioethanol production.
(109) A successful applicant would receive a loan guarantee to
(d) Conclusion
enable the applicant to obtain the necessary fund from a
third-party lender. Maximal Agency (Federal Government)
(102) It was found that the subsidies provided under this
participation in an eligible project is a 90 % guarantee of
scheme did not benefit any of the companies in the
a loan which covers up to 80 % of eligible project's costs
sample. The majority of producers benefiting from this
of the project being financed. The borrower must provide
scheme are biodiesel producers. In fact, only 15 out of
the remaining 20 %. In addition, the maximum guarantee
around 155 companies in the USA who received
percentage decreases as the amount of the loan increases.
subsidies under this scheme in 2011 produced bioe
thanol.
(d) Conclusion
(103) As regards the companies not selected in the sample, the
(110) The investigation showed that no companies had yet
investigation showed that the total amount of subsidies
received payments from the US Government under this
granted under this scheme to bioethanol production was
scheme. During the IP three companies not selected in
insignificant when compared to the total production of
the sample had applied for a loan guarantee relating to
bioethanol during the IP.
the production of cellulosic bioethanol, although two of
the loan guarantee applications were pending. None of
these companies are producers of bioethanol derived
(104) It was therefore not necessary further to assess the
from corn. The investigation also showed that there
countervailability of this scheme.
has not yet been any production of bioethanol as a
result of this scheme.
3.2.6. USDA Biorefinery Assistance Program
(111) The investigation also showed that the loan guarantee
(105) The Biorefinery Assistance Program is meant to assist the
awards to future producers of cellulosic bioethanol had
development of new and emerging technologies for
no impact on the production and sale of bioethanol
advanced biofuels.
during the IP.

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(112) It is therefore not necessary to further evaluate the
(119) The first component of BCAP provides benefits to
countervailablity of this scheme in the context of this
producers of eligible crops. To be eligible for benefits
investigation.
the eligible crop must be produced in a geographic
area designated as 'project area'. The second component
of BCAP provides matching payments for the collection,
harvest, storage and transportation of renewable biomass
3.2.7. USDA Biomass Crop Assistance Program
sources or eligible materials.
(113) The USDA Biomass Crop Assistance Program ('BCAP')
supports the production of feedstocks for next-generation
advanced biofuels. BCAP provides benefits to producers
(c) Practical implementation
of eligible crops or owners of biomass materials grown
on eligible lands. As such, benefits are provided for the
(120) Biomass conversion facilities, including bioethanol
production of crops and materials that may be used as an
producers, do not receive compensation through BCAP.
input for advanced biofuels, but not for the production
Their suppliers, who produce eligible crops or own
of biofuels.
eligible material, receive payments. The authorities of
the USA stated that the BCAP has not contributed to
the production of any bioethanol, including cellulosic
bioethanol during the IP.
(114) According to the authorities of the USA, bioethanol
produced from corn, which accounts for nearly all US
bioethanol production and exports, is specifically
excluded from the BCAP. In the view of the authorities
(121) Regarding BCAP payments during the IP, three bioe
of the USA, given BCAP's focus on advanced biofuels,
thanol facilities qualified for the purpose of Research
and the lack of advanced biofuels commercial
and Development in the area of transportation and
production, the program did not confer any benefit on
storage. During the IP, a total of 1,7 million USD was
commercial producers of bioethanol in the United States
paid to 83 material owners who delivered corn to one
during the IP.
approved facility. No payments were made to the other
material owners for delivery of materials to the two other
qualified biomass conversion faculties.
(a) Legal basis
(115) Section 9011 of the Food, Conservation, and Energy Act
(122) Before the IP there were 458 biomass conversion
of 2008 (the 2008 Farm Bill) is the legal basis for the
facilities that were qualified to receive the delivery of
USDA Biomass Crop Assistance Program.
eligible materials. Only two of these qualified facilities
were bioethanol producers.
(b) Eligibility
(123) There were nine project areas established in the IP.
(116) BCAP has two components, each with specific and
During this time, crops were being signed up or were
different eligibility. The first component, the Project
in the process of enrolling in BCAP. Thus, no crop
Area component, provides benefits to producers of
'
collection or harvesting occurred in that period.
eligible crops' while the second component, the
Matching Assistance component, provides benefits to
owners of 'eligible materials'. Eligible crops and eligible
materials serve as inputs for advanced biofuels, heat,
(d) Conclusion
power, and bio-based products. According to the auth
orities of the USA, payments are not made to biofuel and
(124) As explained above, suppliers who produce eligible crops
bioenergy producers themselves.
or own eligible material, receive payments under this
scheme. There was no evidence showing that benefits
passed through to the producers of bioethanol and the
amounts paid are thus not countervailable.
(117) An eligible crop is defined as any crop of 'renewable
biomass' excluding any crop eligible to receive
payments under Title I of the 2008 Farm Bill. Among
other things, the excluded crops are corn, grain sorghum,
3.2.8. USDA Rural Energy for America Program
oats, rice, wheat, honey and sugar.
(125) The USDA Rural Energy for America Program ('REAP')
provides loan guarantees and grants to rural small busi
nesses and agricultural producers to purchase renewable
(118) Eligible material is defined as any 'renewable biomass',
energy systems and to make energy efficiency improve
excluding whole grain from any crop excluded from
ments. It also provides grants to conduct feasibility
'eligible crops' as mentioned above. Although the grain
studies for renewable energy systems, to perform
from excluded crops (such as corn) is excluded from
energy audits, as well as renewable energy development
'eligible materials', residuals from those crops (such as
assistance for agriculture producers and rural small busi
the cellulosic material) are 'eligible materials'.
nesses. According to the authorities of the USA, REAP

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supports a wide range of agricultural producers and small
projects, covering the period 1 October 2008 through
businesses in their efforts to reduce energy consumption;
30 September 2011 (the investigation period). According
it does not support the production of any specific
to the authorities of the USA, the majority of these
commodity and it is not specific to an enterprise or
awards were for projects unrelated to biofuels of any
group thereof.
kind. Such projects included, but were not limited to
solar, wind and energy efficiency.
(126) REAP has three components:
(131) During the IP, only two bioethanol producers received
benefits under REAP programs, each for a feasibility
— The Renewable Energy System ('RES') and Energy
study grant. Prior to the IP, one company received a
Efficiency Improvement ('EEI') Loan Guarantee and
grant for Renewable Energy Systems for a project
Grant Program provides loan guarantees and/or
involving bioethanol production from sugar and
grants to agricultural producers and rural small busi
alcohol-based waste.
nesses to purchase, install and construct renewable
energy systems and make energy efficiency improve
ments;
(d) Conclusion
(132) This scheme is considered to be a subsidy in the sense of
— The Energy Audit and Renewable Energy Devel
Article 3(1)(a)(i) of the basic Regulation as the scheme
opment Assistance Grant Program provides grant
provides a financial contribution by the Government of
assistance to entities that assist agriculture producers
the USA in the form of a grant. The subsidy confers a
and small rural businesses by conducting energy
benefit to the companies receiving them.
audits and providing information on renewable
energy development assistance;
(133) However, it should also be noted that none of these
grants appeared to be specific for the production of
— The Feasibility Studies Grant Program provides grant
any commodity including bioethanol which means that
assistance to applicants that need to complete a feasi
they cannot be considered countervailable pursuant to
bility study, which is required in applications for
Article 4 of the basic Regulation.
many of the Government's energy programs.
3.2.9. Department of Energy Biorefinery Project
(127) Through these three components, REAP is available for
Grants
the following types of projects: Renewable Energy
Systems, Energy Efficiency Improvements, Energy
(134) The relevant legislation authorises the funding of 'Inte
Audits, Renewable Energy Development Assistance and
grated Biorefinery Demonstration Projects' to demon
Feasibility Studies.
strate: the commercial application of integrated biorefi
neries with a focus on lignocellulosic feedstock; the
commercial application of biomass technologies for a
variety of uses, including liquid transportations fuels,
(a) Legal basis
high-value bio-based chemicals, substitutes for
(128) Title IX, Section 9006 of the Farm Security and Rural
petroleum-based feedstock and products, and energy in
Investment Act of 2002 (2002 Farm Bill) as well as Title
the form of electricity or useful heat; and the collection
IX, Section 9007 of the 2002 Farm Bill as amended by
and treatment of a variety of biomass feedstock.
Title IX, Section 9001 of the Food, Conservation, and
Energy Act of 2008 (the 2008 Farm Bill) is the legal
basis for the USDA Rural Energy for America Program.
(a) Legal basis
(135) Energy Policy Act of 2005, sections 931-932 is the legal
(b) Eligibility
basis for the Department of Energy Biorefinery Project
Grants.
(129) The eligibility criteria vary depending on the type of
project, as referred to in recital (127), and, as regards
projects for Renewable Energy Systems and Energy Effi
ciency Improvements, whether a grant or loan guarantee
(b) Eligibility
is being requested.
(136) Eligibility is specific to the funding opportunity
announcement (FOA) for each project published by the
relevant authorities of the Department of Energy.
(c) Practical implementation
Regarding FOAs relevant to bioethanol, recipients must
use cellulosic biomass and produce a biofuel; the
(130) The investigation showed that since the 2008 Farm Bill
particular eligible biomass and biofuel(s) are delineated
was enacted, REAP has made awards to over 5 960
in each FOA.

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(c) Practical implementation
3.2.10. Conclusion on Federal Schemes
(137) The scheme is administered through a series of annual
Fuel mixture tax credits - Excise Tax/Income Tax credits
competitive solicitations or FOAs that distribute appro
priated funds. The competitive solicitations are open to
(144) It was established that during the IP the US Government
eligible applicants from industry, academia and national
provided a credit of 0,45 USD for each gallon of ethanol
laboratories. Eligible applicants submit proposals that are
used in producing alcohol fuel mixture. This means that
reviewed against the criteria set out in the FOA. Once an
bioethanol blenders benefited from a reduced tax rate at
award has been granted, the relevant authorities of the
the time of sale or received a direct payment, which
Department of Energy monitor the performance of the
offset their normal liability for a part of the excise duty
recipient against the scope, schedule and cost through
on gasoline fuel. Only to a lesser extent the mixture tax
the life of the award. Payment for costs incurred by
credit was used to offset income tax liability. This is a
the recipient in performance of the project is made on
financial contribution, in the form of Government
a reimbursement basis.
revenue foregone, which confers a benefit to the
recipients in the form of a reduced tax liability. The
scheme is limited to companies that are involved in the
bioethanol industry, i.e. the blending of bioethanol, and
is therefore countervailable.
(138) No financial assistance agreements under this program
support the development of corn bioethanol process
technologies. The assistance is solely focused on
cellulosic advanced biofuels.
(145) The investigation established, however, that the main
subsidy scheme, the bioethanol mixture tax credit,
expired in the end of 2011 and has not been reintro
duced.
(139) Recipients must use cellulosic biomass and produce a
biofuel; the particular eligible biomass and biofuel(s) are
delineated in each FOA.
(146) Following the disclosure of the essential facts and
considerations on the basis of which the Commission
has decided to continue the investigation without the
(140) During the IP there were five large scale bioethanol
imposition of provisional measures, one party claimed
projects funded under this scheme. One of the
that various tax forms allow recipients to still claim
companies in the sample received benefits from this
this subsidy later than 31 December 2011.
scheme during the IP.
(147) In reply to this claim it is noted that the investigation
(d) Conclusion
showed that the bioethanol mixture tax credit was
predominantly claimed as an excise tax credit by a
(141) This scheme is considered to be a subsidy in the sense of
Article 3(1)(a)(i) of the basic Regulation as the scheme
blender at the time of the blending of bioethanol with
provides a financial contribution by the Government of
gasoline in order to reduce the excise tax liability of the
the USA in the form of grants. The subsidy confers a
claimant. Only to a limited extent the bioethanol mixture
benefit to the companies receiving them.
tax credit would be used to offset the income tax liability

of the claimant. It goes without saying that there is a
certain time span between the time of blending and the
time when the credit is paid to the claimant. The amount
of mixture tax credits provided during the IP also relates
(142) However, the investigation established that during the IP
to blending taking place before the IP. Consequently,
there was no commercial cellulosic bioethanol sold on
unless the scheme is retroactively reinstated, at the time
the market. In view of the particular circumstances in the
of the decision whether or not to impose definitive
present case, i.e. the fact that the scheme focuses for
measures in 2012, any claims for the mixture tax
example on cellulosic biofuels, and the lack of
credit would be insignificant. Therefore, there are no
commercial cellulosic bioethanol production, it is
elements to say that the subsidy continued.
considered that during the IP this scheme did not
confer any benefit on commercial producers of bioe
thanol in the USA and consequently did not have any
impact on exports of bioethanol to the EU during the IP.
(148) The same party argued that it is clear from the provisions
of Article 15(1), fourth subparagraph, that a subsidy
should not be considered as "withdrawn" until the
defending party has brought convincing evidence that
(143) It is also noted that in relation to the turnover of the
no payments, under any subsidy scheme benefitting
product concerned by the sampled companies, the
producers/exporters of the product concerned, could
amount of subsidies provided under this scheme was
still be made. It should be noted, however, that the bioe
insignificant.
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which provided potentially countervailable subsidies
(152) There were no claims for the income tax credit from
during the IP and this scheme has expired. The other
producers of cellulosic bioethanol during the IP which
investigated schemes which provided benefits directly to
coincides with the lack of commercial production of
the bioethanol industry were insignificant. This argument
cellulosic bioethanol up to the end of the IP.
is therefore rejected.
(149) The party has also claimed that the income tax credit for
(153) The investigation established that the US Department of
producers of cellulosic bioethanol, which is described in
Agriculture's Bioenergy Program expired in 2006 and
recitals (79) to (85) above, is a scheme designed to
was not re-introduced. As regards the USDA Bioenergy
replace the mixture tax credit scheme as a means of
for Advanced Biofuels, the USDA Biorefinery Assistance
subsidising the product concerned. In reply to this
Program, the USDA Biomass Crop Assistance Program,
claim it is noted that, while support for first generation
the USDA Rural Energy for America Program and the
bioethanol has been mostly phased out, schemes for
Department of Energy Biorefinery Project Grants, the
second generation biofuels has increased. However, the
investigation showed that to the extent these six
production of second generation biofuels is not
schemes provided benefits to production of bioethanol
significant and therefore granted subsidies are at this
during the IP, the amount of subsidies was insignificant.
stage very limited. It should be clarified that the
income tax credit for producers of cellulosic bioethanol
is not a replacement scheme for the mixture tax credit
scheme for the simple reason that it is already in
existence. Moreover, income tax credit for producers of
3.3. STATE SCHEMES
cellulosic bioethanol is, as the name of scheme suggest,
an incentive to producers of cellulosic bioethanol. The
3.3.1. Introduction
mixture tax credit provides an incentive to blenders. The
investigation showed that in the majority of cases the
(154) The investigation showed that three State schemes, i.e.
one claiming the mixture tax credit was a blender/trader
the E85 Infrastructure Grants run by the State of Illinois,
with excise tax liability such as a petrochemical company.
the Biofuels Infrastructure grants run by the State of Iowa
In other words, it was not bioethanol producers who
and the E85 Fuelling Infrastructure Grans run by the
claimed the bulk of the mixture tax credit during the
State of Minnesota are not applicable to bioethanol
IP. Therefore, it cannot be argued that the income tax
producers. These schemes provide fuel retail estab
credit for producers of cellulosic bioethanol replaces the
lishments with support for the installation of fuel
mixture tax credit. Consequently, this claim is rejected.
pumps capable of delivering high-ethanol content fuel
and are limited to bioethanol retailers. Consequently,
bioethanol producers receive no benefits from these
schemes. In this regard, it is noted that none of the
companies in the sample received benefits from these
(150) Finally, the party has claimed that the benefits can still be
schemes directly or indirectly.
conferred after the end of the mixture tax credit scheme
due to the continued utilization of fixed assets paid by
the subsidy. It was argued that in case of recurring
subsidies linked to the acquisition of fixed assets,
benefits accruing from previous years within the
depreciation period should be taken into account when
(155) Moreover, it was clarified by the US authorities that the
State of Minnesota does not have a Cellulosic Ethanol
calculating the benefit. First of all it is noted that the
Investments Tax Credit scheme as claimed by the
subsidy is not linked to the acquisition of fixed assets.
complainant. It was clarified that the State of
The mixture tax credit is a recurring subsidy in the sense
Minnesota enacted a law in early 2010 called the
that it is periodic and the benefits are presumed to accrue
'Small Business Investment Tax Credit' commonly
in the year in which they are granted. Moreover, as
referred to as the 'Angel Investment Tax Credit'.
mentioned above, during the IP, the claimants were
Contrary to what is alleged in the complaint, the Angel
only to a very little extent bioethanol producers.
Investment Tax Credit provides no tax credits to busi
Therefore, this claim is rejected.
nesses, but rather to investors who invest in small busi
nesses.
Other Federal Schemes
(151) Statistics provided by the US authorities showed overall
3.3.2. Illinois Biofuels Production Facility Grants
very little use of the small producer's income tax credit in
contrast to claims made for the mixture tax credit. A
(156) According to the authorities of the USA, this scheme was
comparison of the total amount claimed under this
not in operation during the IP, has not received funding
incentive in relation to the total production of bioethanol
since July 2007 and has been inoperative since 2008
showed insignificant overall subsidisation during the IP.
when funds were exhausted. When operative, the

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scheme authorised grants for the construction of new
3.3.5. South Dakota Ethanol Production Incentive
renewable fuel production facilities or the expansion of
existing facilities.
(164) The State of South Dakota administers a bioethanol
producer payment program that provides financial
assistance for eligible bioethanol plants of 0,20 USD
per gallon of bioethanol produced up to a possible 1
(157) Two grants were granted in 2008 when the scheme was
million USD annually per facility.
still in operation, and two companies outside the sample
located in Illinois each received a grant. However, this
scheme is no longer in operation and none of the
sampled companies availed of benefits under this
scheme during the IP.
(165) The ethyl alcohol must be fully distilled and produced in
South Dakota, must be 99 % pure, must be distilled from
cereal grains and must be denatured. The ethanol
production payment is only available for qualifying
3.3.3. Iowa Alternate Energy Revolving Loan
ethyl alcohol produced by plants than began production
Programme
on or before 31 December 2006.
(158) The Alternate Energy Revolving Loan Program (AERLP) is
authorized by section 476.46 Code of Iowa 1997 as
amended. This code states that the Iowa Energy Center
shall establish and administer an alternate energy
(166) Each eligible facility may receive a maximum of
revolving loan program and creates an alternative
83 333 USD per month of production incentive
energy revolving loan fund in the office of the
payments. If sufficient funds are not available to pay
Treasurer of State to be administered by the Energy
the monthly payment of 83 333 USD to each bioethanol
Center.
production facility, each facility receives a prorate share

of the funds available based upon the gallons of ethyl
alcohol produced that month proportionate to all qual
ifying gallons of ethyl alcohol produced at all qualifying
(159) Money in the AERLP fund may be used to provide loans
facilities. Each eligible facility may receive a maximum of
for the construction of alternate energy production
1 million USD per year and for all years of participation
facilities or small hydro facilities as defined in section
in the scheme a maximum of 9 682 000 USD in
476.46 Code of Iowa 1997, as amended.
production payments. As such the subsidies are
recurring and considered to be expensed each particular
year.
(160) According to the authorities of the United States, no
bioethanol production facilities received loans pursuant
to the AERLP for the years 2008, 2009, 2010 and the IP.
None of the sampled companies received benefits under
(167) The investigation showed that two of the companies in
this scheme. Consequently, it was decided not to further
the sample received benefits under this scheme during
investigate this scheme in the context of this proceeding.
the IP. For both companies, the subsidy amount was
calculated on the basis of the amount of payments
received during the IP. The amount of subsidy was
3.3.4. Nebraska Ethanol Production Tax Credit
then allocated over the total sales of bioethanol made

by the companies concerned during the IP as the appro
(161) The current Nebraska State motor fuels tax rate is
priate denominator.
0,267 USD per gallon for all gasoline, gasohol, diesel
fuel, bioethanol and compressed gases sold in the State.
The Ethanol Production Incentive scheme in effect during
the IP provides a 0,18 USD per gallon tax credit to qual
(168) This calculation showed that the amount of subsidy for
ifying ethanol production facilities in operation on or
both companies was insignificant.
before 30 June 2004.
(162) The deadline to apply to participate in this scheme was
3.3.6. Conclusion on State Schemes
16 April 2004. A qualified production facility must have
(169) The investigation showed that two of the US State
been located in the State of Nebraska and must have
schemes identified by the complainant, i.e. the
either (i) not been in production on or before
Nebraska Ethanol Production Tax Credit and South
1 September 2001 or (ii) not received credits prior to
Dakota Ethanol Production Incentive, provided subsidies
1 June 1999. All fermentation, distillation and dehy
to bioethanol production that are financial contributions
dration must take place at the qualified facility.
which confer a benefit to the producers in those States.
Although the schemes seem to be specific within the
States concerned, the amount of subsidies is insignificant
(163) This scheme did not benefit any of the companies in the
when compared to the total production of bioethanol in
sample. In any event, it appears that the amount of
the USA. Regarding subsidies received by the companies
subsidy was negligible when compared to the total
in the sample, it was also concluded that the amount of
production of bioethanol in the USA.
subsidisation was insignificant.

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3.4. AMOUNT OF COUNTERVAILABLE SUBSIDIES DURING
(179) In the present case the evidence found in the investi
THE IP
gation showed that all US exports of bioethanol were
subsidised by a maximum amount of USD 0,45 per
(170) The investigation has shown that all investigated schemes
gallon during the IP. It is noted that at a point in the
except the one mentioned in recital (171) below, were
investigation it became clear that any sample was not
negligible and not countervailable during the IP.
representative due in particular to the nature of
subsidisation in the present case. Moreover, the
sampled producers did not export the product
(171) As mentioned in recitals (53) to (71) above, the investi
concerned to the Union.
gation showed that the US Government provides a
mixture tax credit of 0,45 USD for each gallon of bioe
thanol used in producing an alcohol fuel mixture which
(180) Indeed, it was the activity of blending which triggered the
benefits ethanol blenders.
credit irrespective of whether the blender is a producer or
an exporter. In the present case it was established that it
was predominantly the exporters who claimed the Bioe
(172) As such the subsidy was granted on a per unit basis, i.e.
thanol Mixture Tax Credit.
by reference to the quantities of bioethanol used. The
benefit is also attached to the imported product in the
Union.
(181) It was also argued that, in the alternative to assigning
individual subsidy margins to the sampled companies,
the Commission should provide a pass-through analysis
(173) The amount of countervailable subsidies in accordance
on how the bioethanol mixture tax credit can auto
with the provisions of the basic Regulation is
matically be attributed to and benefit the producers.
0,45 USD per gallon.
The request for a pass-through analysis appears
unfounded. The subsidy is only paid once and the
product does not change. It is the product exported to
(174) It is noted that the amount of subsidisation depends on
the EU, bioethanol, which is subsidised. Therefore, there
the proportion, in weight, of bioethanol in the blend.
is no need for such analysis.
3.5.
(175) It is considered that the amount of subsidy is 0,45 USD
POST IP DEVELOPMENTS
per gallon on a country-wide basis as all of US produced
(182) Parties highlighted the fact that the main subsidy scheme,
bioethanol, including exports to the Union, ultimately
the mixture tax credit, which conferred countervailable
benefitted from the bioethanol mixture tax credit. It is
subsidies to US recipients in the IP, expired in the end of
therefore not necessary to differentiate between economic
2011 and has not been reintroduced. They noted that
operators, in particular as the subsidy is rarely granted to
Article 15 of the basic Regulation provides that no
producers of bioethanol but predominantly to traders/
measures shall be imposed if the subsidy or subsidies
operators that are blending the bioethanol.
are withdrawn or when the subsidies no longer confer
any benefit on the exporters concerned.
(176) Following the disclosure of the essential facts and
considerations on the basis of which the Commission
(183) In view of the current cessation of the main subsidy
decided to continue the investigation without imposition
scheme identified in the IP and the fact that there are
of provisional measures, several parties argued that in
no signs that it will be introduced, these parties
any case, the sampled producers should be assigned indi
considered that imposition of definitive countervailing
vidual subsidy margins, and in case they did not receive
measures would not be warranted. They also argued
the bioethanol mixture tax credit they should be assigned
that any imposition of definitive measures would
a zero subsidy margin.
anyway go beyond what is necessary to counter the
effects of the subsidisation at the time these measures
would be imposed.
(177) Pursuant to Article 15 of the basic Regulation, any regu
lation imposing the duty shall either specify the duty for
individual suppliers or the supplying country concerned.
(184) The investigation showed that the bioethanol mixture tax
In this case it was found that the structure of the bioe
credit procured during the IP was withdrawn at the end
thanol industry and the way the subsidies were granted,
of 2011. Given that this event occurred after the IP, the
in particular the Bioethanol Mixture Tax Credit, any indi
Commission thus contacted in several occasions the US
vidual subsidy margins would not be representative and
authorities to receive further information with regard to
would not reflect the actual situation on the bioethanol
the definitive termination of the main subsidy scheme.
market, in particular for the export.
(185) The information collected during the investigation at the
(178) It is clear from the WTO Agreement on Subsidies and
premises of the US authorities and the further clarifi
Countervailing Measures and GATT Article VI:3 that the
cation they provided demonstrated that certain
purpose of any measures is to offset the effect of the
amounts were paid out to US recipients just after the
subsidised imports.
IP, namely in the US fiscal year 2012, which ran from

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1 October 2011 to 30 September 2012. Whilst these
(191) It is also noted that pursuant to Article 14(3) of the basic
amounts would still lead to continued subsidisation
Regulation, there shall be immediate termination of the
above the de minimis threshold in the first quarter of
proceeding where it is determined that the amount of
fiscal year 2012, the amounts paid out after that period,
countervailable subsidies is de minimis, namely below
and in particular at the end of 2012, would be negligible
2 % ad valorem.
in view of the cessation of the main subsidy scheme in
December 2011. Up to now, there are no signs of
reinstatement of the mixture tax credit and any
(192) In view of the withdrwal of the main subsidy scheme
reinstatement of that scheme would normally require
established in the IP and the fact that the amount of
an act of the United States Congress.
subsidisation received for all other subsidy schemes
investigated were below the de minimis threshold during
the IP in the meaning of Article 14(3) of the basic Regu
4. REGISTRATION OF IMPORTS FROM THE COUNTRY
lation, it is considered that imposition of definitive
CONCERNED
measures is not warranted.
(186) The complainant requested several times registration of
imports of bioethanol originating in the USA with a view
of retroactive collection of duties. The request contained
(193) In the light of the above, it is considered that the present
sufficient evidence to justify registration in accordance
anti-subsidy investigation should be terminated.
with Article 24(5) of the basic Regulation.
(194) In line with the termination of this investigation the
(187) The Commission considered that, even if it had
registration of imports should hereby be terminated.
provisionally concluded that the main subsidy scheme
in force during the IP had ceased, in the sense that it
no longer conferred a benefit at the time provisional
(195) All parties were informed about the essential facts and
measures would have been imposed, there was evidence
considerations on the basis of which it was intended to
that the United States might reinstate such subsidy
terminate proceeding. They were granted a period within
scheme. Thus, in order to preserve the European
which they could make representations subsequent to
Union's rights under these special circumstances, the
this disclosure.
Commission decided to subject imports of the product
concerned to registration pursuant to Article 24(5) of the
basic Regulation so that, eventually, measures may retro
actively be levied against those imports from the date of
(196) In light of the above, the Commission therefore
such registration. A Commission Regulation (EU) No
concludes that the anti-subsidy proceeding concerning
771/2012 (
imports into the Union of bioethanol originating in the

1 ) was published on 24 August 2012 to
this effect.
United States of America should be terminated without
the imposition of anti-subsidy measures and that the
registration of imports should likewise be terminated,
5. TERMINATION OF THE ANTI-SUBSIDY PROCEEDING
AND OF REGISTRATION
6. ADVISORY COMMITTEE
(188) The investigation established that apart from the main
subsidy scheme, the mixture tax credit described in
(197) Objections to the termination of this anti-subsidy
recitals (53) to (71) above, the amount of subsidisation
proceeding were raised in the Advisory committee.
received for all other subsidy schemes investigated were
Consequently, in accordance with Article 14 of Regu
insignificant and not countervailable during the IP.
lation (EC) 597/2009, the proceeding shall stand
terminated if, within one month, the Council, acting by
a qualified majority, has not decided otherwise. This
(189) As mentioned above in recitals (182) to (185), the inves
Decision shall then be published in the Official Journal
tigation established that the main subsidy scheme, the
of the European Union,
mixture tax credit, expired in the end of 2011 and has
not been reintroduced. The information available clearly
point to the cessation of the main subsidy scheme. Up to
HAS ADOPTED THIS DECISION:
now, there are no signs of reinstatement of the mixture
tax credit and any reinstatement of that scheme would
normally require an act of the United States Congress.
Article 1
The anti-subsidy proceeding on imports of bioethanol,
(190) Article 15 of the basic Regulation provides that no
sometimes referred to as “fuel ethanol”, i.e. ethyl alcohol
measures shall be imposed if the subsidy or subsidies
produced from agricultural products (as listed in Annex I to
are withdrawn or it has been demonstrated that the
the Treaty on the Functioning of the European Union),
subsidies no longer confer any benefit on the exporters
denatured or undenatured, excluding products with a water
concerned.
content of more than 0,3 % (m/m) measured according to the
standard EN 15376, as well as ethyl alcohol produced from
( 1 ) OJ L 229, 24.8.2012, p. 20.
agricultural products (as listed in Annex I to the Treaty on

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the Functioning of the European Union) contained in blends
Article 3
with gasoline with an ethyl alcohol content of more than
10 % (v/v) currently falling within CN codes ex 2207 10 00,
Regulation (EU) No 771/2012 is hereby repealed.
ex 2207 20 00, ex 2208 90 99, ex 2710 12 11, ex 2710 12 15,
ex 2710 12 21, ex 2710 12 25, ex 2710 12 31, ex 2710 12 41,
Article 4
ex 2710 12 45, ex 2710 12 49, ex 2710 12 51, ex 2710 12 59,
ex 2710 12 70, ex 2710 12 90, ex 3814 00 10, ex 3814 00 90,
This Decision shall enter into force on the day following that of
ex 3820 00 00 and ex 3824 90 97 and originating in the
its publication in the Official Journal of the European Union.
United States of America, is hereby terminated.
Done at Brussels, 20 December 2012.
Article 2
Customs authorities are hereby directed to cease the registration
For the Commission
of imports carried out pursuant to Article 1 of Regulation (EU)
No 771/2012. No countervailing duty shall be collected on the
The President
imports thus registered.
José Manuel BARROSO

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