The European Commission is to drop an anti-subsidy probe into imports of biodiesel from Argentina and Indonesia, major producers, but will continue an anti-dumping investigation, officials said Thursday.

The Commission said that the European Biodiesel Board, which represents the industry in the EU, had withdrawn its complaint that Argentina and Indonesia were unfairly subsidizing their exports of biodiesel.

"This means that the investigation will normally be terminated" unless it is found to be of wider interest, European Union trade spokesman John Clancy said.

The Commission, the EU's executive arm, "is currently assessing whether this is the case," Clancy said.

A parallel anti-dumping investigation begun in August 2012 will continue, with the deadline to "impose definitive measures, if any," on Nov. 28, he said.

"There is no decision yet regarding the imposition of definitive measures," Clancy added.

On Wednesday, the Argentinian government said it was ready to take the matter to the World Trade Organization if Brussels went ahead and imposed punitive anti-dumping import duties.

The EU takes about 90% of Argentinian biodiesel exports and is an important market for Indonesia .

Argentina is the world's top biodiesel producer, making 2.5 million metric tons worth $1.8 billion in 2012. Some 1.6 million ton were exported.

According to Argentinian companies, the Commission planned to impose a permanent import duty of 22-25% from 2014.

Trouble for the Argentinian biodiesel sector began in 2012 when Spain put in place measures to limit imports after the Argentinian government nationalized a stake of YPF oil company owned by Spanish oil giant Repsol.

Biodiesel is made up of ordinary diesel mixed with alcohol produced from plant crops, usually corn (maize) and is sold as a more environmentally friendly fuel.
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