U.S. Taxpayers Subsidize European Biodiesel

Biodiesel that subsidized by up to $300 million from U.S taxpayers is undercutting the European biodiesel market, causing friction on both sides of the Atlantic.

A loophole in the 2004 subsidy act let U.S. fuel blenders claim a $1 per gallon subsidy for entire boatloads of biodiesel produced elsewhere if they added just a dribble of petroleum-based diesel to the shipment before sending it off to Europe for sale at prices up to 30 percent below what European producers must charge.

Some U.S. companies engage in "splash and dash," a practice whereby a tanker of biodiesel made elsewhere (typically Indonesia or Malaysia) receives just a splash of American-made petroleum diesel while at a U.S. dock and then dashes off to Europe for sale.

Adding insult to injury, much of the fuel subsidized by U.S. taxpayers at the rate of $1 a gallon isn’t even made in this country and is giving European motorists a break at the pumps.

Read the full story at Edmunds' Green Car Advisor.