By Sybille de La Hamaide
PARIS, May 28 (Reuters) - A European Union move to extend its duties on U.S. biodiesel imports is good news for producers but may not be enough to prevent more companies from going under as margins remain poor, Europe's largest maker said on Thursday.
In an interview with Reuters, Bernard Nicol, director general of France's Diester Industrie, said that without antidumping duties on cheap U.S. imports, the whole European biodiesel industry would collapse.
"Without this the situation for the sector would have been intolerable," Nicol said.
The European Commission, the 27-member bloc's executive arm, submitted a proposal on Thursday to impose tariffs of up to five years at a meeting of the EU's anti-dumping committee and a decision was expected next month. [ID:nLS984143]
It follows a decision in March to impose temporary duties on U.S. imports, based on a complaint from EU producers of biodiesel -- the main biofuel produced in Europe -- that they were being hammered by U.S. subsidies.
The United States exports more than 80 percent of its biodiesel output, all of it to Europe, but Nicol said the provisional duties had stopped the flood.
"Today the stream of U.S. biodiesel has already come to a full halt as none of the companies wanted to pay the expensive duties," he said. "Even the lowest duties are unbearable."
Under the new proposal, U.S. producers would face additional duties comprised between 213.8 euros ($297) and 409 euros ($567.5) per metric tonne of biodiesel exported to the EU.
Without additional duty, a tonne of U.S. biodiesel in Rotterdam costs an average of $850 per tonne.
SQUEEZE
But the duties would not be enough to save a sector which has already seen a significant number of companies fold over the last months due to a collapse in crude oil prices, he said.
"Still, very significant problems remain because biodiesel margins are very poor everywhere in the world," he said, stressing that vegetable oil prices -- the commodity biodiesel is made of -- did not fall at the same pace as crude oil prices.
A drought in Argentina, the world's No. 3 soybean exporter, and strong demand from China have made soybean and soyoil prices surge with U.S. soybeans hitting a new 8-month high on Thursday.
"We are in an uncomfortable squeeze situation. This means there are still a lot of companies that will go bankrupt," Nicol said, adding that a consolidation of the sector was to be expected with small companies taken over by stronger ones.
However, Diester Industrie, which controls 30 percent of the EU's biodiesel market, did not have any acquisition plan for the moment, he said.
"It is likely we will do at some point but we want to pause until we know the details of the new EU directive (on climate change), which means we have a year ahead of us," he said.
The EU directive, expected next year, is due to include targets on the use of renewable energies in transport.
For an analysis on the current European biofuel gloom, click on [ID:nLO458357].
To access a Reuters table of biofuel margins around the
world click on