* EU executive says U.S. industry evaded biodiesel tariffs
* Commission plans to battle transhipments via Canada
* Duties could apply to all U.S. biodiesel blends
* Plan highlights global race for renewable energy market
(Adds details, background, bullet points)
By Juliane von Reppert-Bismarck
BRUSSELS, March 25 (Reuters) - The European Union executive plans to extend punitive duties on biodiesel imports from the United States after finding U.S. exporters have been evading tariffs illegally, people familiar with the case said on Friday.
According to initial plans by the European Commission, biodiesel blends imported from Canada and U.S. biodiesel mixed with more than 80 percent of mineral diesel will face tariffs of more than 400 euros ($566.4) per tonne, the sources told Reuters.
If approved by EU governments, the duties would be in place by November 2011 and stay in place until 2014.
Canadian exporters BIOX Corp and Rothsay Biodiesel, affiliated to Maple Leaf Foods Inc, are to be exempted under the plan, the sources said.
"The Commission found the two companies were able to prove they were not involved in circumvention," said one source.
The plan highlights the growing battle to clinch a slice of a renewable energy market that is growing amid global efforts to fight climate change. It is likely to sour talks for a multi-billion dollar trade deal between the EU and Canada already troubled by EU environmental standards.
It centres on allegations that U.S. exporters have been shipping biodiesel to Europe via third countries and switching to diesel blends containing less than one in five parts of biodiesel to avoid high duties imposed on U.S. diesel blended with 20 percent or more of biodiesel.
The EU imposed those duties in 2009 after it found U.S.-made biodiesel was illegally subsidised and that exporters were selling it below cost on the EU market.
U.S. exports to the EU plummeted after the duties were launched, while Canadian sales to the EU soared to more than 140,000 tonnes in 2009, from about 1,700 tonnes in 2008, according to EU data. Singapore, which had also been investigated as a potential transhipment port for U.S. biodiesel, will be exempt from duties under the plan, the sources said.
European biodiesel producers have been demanding that the EU extend the scope of the trade measures to make up for damage caused to EU producers.
The plan -- on which EU industry, U.S. and Canadian exporters and later EU governments must comment -- is likely to open debate on the EU's strategy for sourcing fuel from renewable sources and questions on what measures are allowed under EU law to battle circumvention. (Editing by James Jukwey)