government provision of goods or services for less than adequate remuneration, such as the provision of soybeans; government purchase of goods for more than adequate remuneration and/or income or price support, such as the government mandated purchase of biodiesel (Biodiesel Supply Agreement); direct transfer of funds, such as provision of loans and export financing on preferential terms, including the preferential lending by the National Bank of Argentina (Banco de la Nación Argentina); and government revenue forgone or not collected, such as accelerated depreciation for biodiesel producers under the Biofuels Law of 2006, exemption and deferral of the minimum presumed income tax for biodiesel producers under the Biofuels Law of 2006, and several provincial tax exemptions.

The evidence of subsidisation was made available in the open version of the complaint and was further analysed in the memorandum on sufficiency of evidence.

It is alleged that the measures described in recital (8) amount to subsidies because they involve a financial contribution from the government of Argentina or other regional governments (including public bodies) and confer a benefit to the exporting producers of the product concerned. The measures are alleged to be limited to certain enterprises or industry or group of enterprises and are therefore specific and countervailable.

Therefore, the available evidence at this stage tends to show that the exports of the product concerned are benefiting from countervailable subsidies.

Furthermore, on the basis of the latest information provided by the complainant in its request for registration, the Commission has at its disposal sufficient evidence that the exporting producers' subsidy practices are starting to cause material injury (and not only a threat of material injury) to the Union industry.

The request for registration, together with the information submitted subsequently, provides sufficient evidence of critical circumstances, whereby towards the end of the investigation period (‘IP’) (1 January 2017 to 31 December 2017) and in the first quarter (January 2018 – March 2018) of the post-IP period, injury, which will be difficult to repair, started to materialise.

Indeed, this injury is being caused by massive imports, benefiting from countervailable subsidies, in a relatively short period of time. The evidence shows a massive increase of imports of the product concerned in absolute terms and in terms of market share in the period between August 2017 and the first quarter of the post-IP period. Specifically, the evidence available shows that imports of the product concerned from Argentina increased from 0 tonnes in August 2017 to 410 600 tonnes in the first quarter of the post-IP period with a corresponding steep increase in market share from 0 % to 10 %. Additional evidence received shows that between September 2017 and February 2018, Argentina exported 837 000 tonnes of the product concerned evidencing that further substantial imports can be expected in the period following February 2018.

The evidence further shows that the massive increase of imports of the product concerned from Argentina is starting to result in substantial adverse effects on the situation of the Union industry, including depressed price levels. Between 1 September 2017 and 31 March 2018 prices of FAME (fatty-acid methyl esters) biodiesel dropped by 12,3 %.

In addition, the evidence submitted by the complainant in its request for registration shows that the deteriorating market situation is resulting in planned reduction of production and/or recourse to partial activity in at least three companies in the Union. This will lead to a significant reduction in Union production and sales and will have a negative impact on employment in the Union industry.

Finally, the Commission assessed whether the material injury which has started to materialise after the investigation period is difficult to repair. In this regard, it is noted that the product concerned is very sensitive to price changes, as evidenced by the low level of imports of the product concerned following the imposition of anti-dumping duties in 2013 and the subsequent increase of imports following the reduction of anti-dumping duties in September 2017. There is a risk that an increasing number of Union producers will suffer from diminishing sales and reduced production levels if imports continue at the current increased levels at allegedly subsidised prices from Argentina as evidenced so far. It is clear that that risk will negatively impact employment and the overall performance of Union producers. Thus, the reduced income and permanent loss of market share constitutes a material injury which is difficult to repair.

Given the data set out in recitals (14) and (15) and the considerations laid down in recital (17), the Commission deemed it necessary to prepare the potential retroactive imposition of measures by imposing registration in order to preclude the recurrence of such injury. Indeed, the post-IP market conditions tend to confirm that the situation of the domestic industry is deteriorating due to the significant increase of subsidised imports already in the first quarter of 2018. Thus, should the Commission conclude that the domestic industry suffers material injury at the end of the current investigation, the collection of countervailing duties on registered imports may be deemed appropriate to preclude the recurrence of such injury.