On the EU–U.S. Biodiesel ‘Splash & Dash' Controversy: Causes, Consequences and Policy Recommendations
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This paper shows that the effects of the U.S. blender’s tax credit of $1/gallon and ‘splash &
dash’ had minimal impacts on the EU biodiesel market. Reduced world oil prices and EU tax
exemptions, increased rapeseed oil prices and market uncertainty are shown empirically to be the
major contributors to reduced profitability of EU biodiesel production. Nevertheless, the EU
imposed tariffs sometimes exceeding the tax credit in retaliation for the U.S. ‘splash & dash’
program. Instead, EU imports from the United States can be beneficial for EU taxpayers, fuel
consumers as well as U.S. biodiesel producers.