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PARIS (Reuters) - The European Union Commission has decided to halt an anti-subsidy probe into biodiesel imports from Argentina and Indonesia after the complainant dropped its action, a Commission document seen by Reuters on Wednesday showed.
The Commission had received on September 27 a complaint from the European biodiesel lobby group EBB over an alleged unfair subsidizing of biodiesel imports from Argentina and Indonesia.
The EBB withdrew its complaint on October 7, the commission said.
"In accordance with article 14 (1) of the basic regulation the proceeding may be terminated where the complaint is withdrawn, unless such termination may not be in the Union's interest," the document said.
This is a separate procedure from a proposal from the European Commission to extend anti-dumping duties against imports of biodiesel from Argentina and Indonesia, accused of selling the product into the bloc at unfairly low prices.
Argentina is the world's biggest supplier of the fuel.
The EU had been the biggest buyer of Argentine biodiesel until last year, when sales began to tumble over dumping accusations, which have been denied by Argentina.
Argentina's foreign ministry issued a statement saying it felt "unease" about the continued inquiry into possible dumping.
It said there are no grounds for the inquiry and that a threatened increase in duties imposed by the EU would "exclude Argentina from the European market."
Representatives from Argentina's biodiesel exporting firms agreed that the EU's decision will do nothing to help increase shipments to the bloc across the Atlantic.
"In commercial terms, this doesn't change the fact that Argentina has lost the European market, given that the anti-dumping (taxes) to be set in November are very high," said a source from Argentina's biodiesel sector who asked not to be named.
"In general terms, the closing of the subsidies investigation means that the export rights (that apply to Argentina) are not a subsidy and cannot be judged against," he added.
(Reporting by Francesco Guarascio and Michel Rose; Additional reporting by Nicolas Misculin in Buenos Aires; Writing by Muriel Boselli and Asher Levine; Editing by Richard Chang and Leslie Gevirtz)