Biodiesel From Argentina And Indonesia Investigation Nos. 701-TA-571-572 (Final) Publication 4748 December 2017 U.S. International Trade Commission Washington, DC 20436 U.S. International Trade Commission COMMISSIONERS Rhonda K. Schmidtlein, Chairman David S. Johanson, Vice Chairman Irving A. Williamson Meredith M. Broadbent Catherine DeFilippo Director of Operations Staff assigned Nathanael Comly, Investigator Philip Stone, Industry Analyst Cindy Cohen, Economist Charles Yost, Accountant Russell Duncan, Senior Statistician Carolyn Holmes, Statistical Assistant Michael Haldenstein, Attorney Betsy Haines, Supervisory Investigator Address all communications to Secretary to the Commission United States International Trade Commission Washington, DC 20436 U.S. International Trade Commission Washington, DC 20436 www.usitc.gov Biodiesel From Argentina And Indonesia Investigation Nos. 701-TA-571-572 (Final) Publication 4748 December 2017 CONTENTS Page Determinations ............................................................................................................................... 1 Views of the Commission ............................................................................................................... 3 Part I: Introduction .............................................................................................................. I-1 Background ................................................................................................................................ I-1 Statutory criteria and organization of the report ..................................................................... I-2 Statutory criteria ................................................................................................................... I-2 Organization of report ........................................................................................................... I-3 Market summary ....................................................................................................................... I-3 Summary data and data sources ............................................................................................... I-4 Previous and related investigations .......................................................................................... I-4 Nature and extent of subsidies and sales at ltfv ....................................................................... I-4 Subsidies ................................................................................................................................ I-4 Sales at LTFV .......................................................................................................................... I-5 The subject merchandise .......................................................................................................... I-6 Commerce’s scope ................................................................................................................ I-6 Tariff treatment ..................................................................................................................... I-6 The product ............................................................................................................................... I-7 Manufacturing processes ...................................................................................................... I-7 Description and applications ............................................................................................... I-13 Domestic like product issues ................................................................................................... I-21 Part II: Conditions of competition in the U.S. market........................................................... II-1 U.S. market characteristics....................................................................................................... II-1 U.S. purchasers ......................................................................................................................... II-2 Channels of distribution ........................................................................................................... II-2 Geographic distribution ........................................................................................................... II-2 Supply and demand considerations ......................................................................................... II-4 U.S. supply ............................................................................................................................ II-4 U.S. demand ......................................................................................................................... II-9 i CONTENTS Page Part II: Conditions of competition in the U.S. market--Continued Substitutability issues ............................................................................................................. II-14 Lead times .......................................................................................................................... II-15 Knowledge of country sources ........................................................................................... II-15 Factors affecting purchasing decisions............................................................................... II-16 Comparisons of domestic products, subject imports, and nonsubject imports ................ II-19 Comparison of U.S.-produced and imported biodiesel ...................................................... II-19 Elasticity estimates ................................................................................................................. II-25 U.S. supply elasticity ........................................................................................................... II-25 U.S. demand elasticity ........................................................................................................ II-25 Substitution elasticity ......................................................................................................... II-25 Part III: U.S. producers’ production, shipments, and employment ...................................... III-1 U.S. producers ......................................................................................................................... III-1 U.S. production, capacity, and capacity utilization ................................................................. III-3 U.S. production by feedstock .............................................................................................. III-7 U.S. production by RIN type ................................................................................................ III-7 Alternative products ............................................................................................................ III-7 U.S. producers’ U.S. shipments and exports ........................................................................... III-7 U.S. producer’s commercial U.S. shipments by type ........................................................ III-10 U.S. producers’ monthly U.S. shipments ........................................................................... III-10 U.S. producers’ inventories ................................................................................................... III-12 U.S. producers’ imports and purchases ................................................................................ III-12 U.S. employment, wages, and productivity .......................................................................... III-13 ii CONTENTS Page Part IV: U.S. imports, apparent U.S. consumption, and market shares ............................... IV-1 U.S. importers.......................................................................................................................... IV-1 U.S. imports ............................................................................................................................. IV-2 Critical circumstances .............................................................................................................. IV-6 Negligibility .............................................................................................................................. IV-7 Cumulation considerations ..................................................................................................... IV-8 Fungibility ............................................................................................................................ IV-8 Geographical markets ....................................................................................................... IV-10 Presence in the market ..................................................................................................... IV-11 Apparent U.S. consumption .................................................................................................. IV-17 Part V: Pricing data ............................................................................................................. V-1 Factors affecting prices ............................................................................................................ V-1 Raw material costs ............................................................................................................... V-1 Transportation costs to the U.S. market .............................................................................. V-1 U.S. inland transportation costs ..........................................................................................