* Executive body seeks 9.5 pct duty on all U.S. bioethanol
* Country-wide duty unusual, normally differs by producer
* All EU member states must agree before duty takes effect (Adds details, context)
By Ethan Bilby
BRUSSELS, Jan 22 (Reuters) - The European Commission has proposed an unusual country-wide duty on all U.S. producers of bioethanol after an investigation into complaints that exporters used state subsidies to sell the fuel to Europe at illegally low prices.
The European Union's executive body is seeking definitive anti-dumping duties of 9.5 percent on all bioethanol coming from the United States, according to the proposal document seen by Reuters on Tuesday.
Since most bioethanol is a component in blended fuel, the proposal seeks a fixed charge of 62.30 euros per net tonne of bioethanol present in fuel.
European demand for bioethanol has been buoyed by official targets made to wean the bloc off fossil fuels and fight climate change. The bloc imports more than one billion litres annually from the United States, the world's largest producer.
The EU has been registering imports of American bioethanol from August in preparation for possible tarrifs. Overall shipments from the United States to the EU are worth more than 700 million euros ($930 million) a year.
The Commission followed a similar procedure of determining a duty in a case against blended U.S. biodiesel in 2008, imposing duties of up to 400 euros per tonne.
But the proposed country-wide nature of the duties is unusual.
The European Commission usually imposes different anti-dumping duties on different producers, based on how greatly they are deemed to undercut the EU market with their pricing, a so-called injury margin.
"It's the first time ever for a market economy country," a Brussels trade lawyer told Reuters. "If you have a market economy country like the U.S., I have never seen it before in my life."
The proposal, made after a 14-month investigation, must be agreed to by EU member states before the duties can take effect.
A European Commission spokesman could not immediately be reached for comment.
In the proposal, the Commission said that it needed to base its data on traders rather than producers, because bioethanol producers did not know whether their fuel would be shipped to the EU.
Since it was not possible to trace purchases from traders to individual producers, the Commission said, it decided to recommend country-wide duties.
The United States is the world's largest producer of bioethanol, accounting for nearly two-thirds of annual global production of 85 billion litres.
EU bioethanol industry association ePURE, whose members produce 80 percent of Europe's bioethanol, had complained to the Commission that tax credits in the United States allowed its exporters to cut their EU selling price by about 40 percent.
U.S. companies, including CHS Inc., Patriot Renewable Fuels, and Valero Renewable Fuels export bioethanol to Europe.
ePure estimates the value of these American bioethanol imports to the EU at 720 million euros a year. ($1 = 0.7526 euros) (Reporting by Ethan Bilby; Editing by Anthony Barker)