The European Commission has opened a formal antitrust investigation to scrutinise whether three ethanol producers have, in breach of EU antitrust rules, manipulated ethanol benchmarks published by a price reporting agency.
The companies concerned are Abengoa S.A. of Spain, Alcogroup SA of Belgium and Lantmännen ek för of Sweden, together with their relevant subsidiaries. They produce, distribute and trade ethanol.
Commissioner Margrethe Vestager, in charge of competition policy, stated:”Competitive biofuels markets are crucial to promote cleaner transport and to cut greenhouse gas emissions. This is an important element of the Commission’s ambitious strategy to limit greenhouse gas emissions and to boost renewable energies.”
Ethanol is an alcohol made from biomass (such as wheat, maize or sugar beet) that is mainly added to gasoline and used as a biofuel for certain motor vehicles. The Commission has concerns that these companies may have colluded to manipulate ethanol benchmarks published by the price reporting agency Platts, for example by agreeing between them to submit or support bids with a view to influencing benchmarks upwards and thus driving up ethanol prices.
Such practices, if confirmed, harm competition and undermine EU energy objectives by increasing prices for renewable energy, namely biofuels used for transport. This could lead to a reduction of the use of biofuels as an alternative to fossil fuels, with negative consequences both for consumers and the environment.
The prices assessed and published by price reporting agencies such as Platts serve as benchmarks for trade in the physical markets and in the financial derivative markets for a number of commodity products both in Europe and worldwide. In 2013, the Commission proposed a Regulation to enhance the governance, integrity and reliability of benchmarks used in financial instruments and contracts. This Regulation is at the final stage of adoption by the Council and European Parliament.
The Commission will now conduct an in-depth investigation as a matter of priority. The opening of formal proceedings does not prejudge the outcome of the investigation.
The Commission’s investigation started with unannounced inspections carried out in May 2013. Further inspections were carried out in October 2014 and March 2015.
Article 101 of the Treaty on the Functioning of the European Union (TFEU) prohibits anticompetitive agreements and concerted practices. The implementation of this provision is defined in the EU Antitrust Regulation (Council Regulation No 1/2003), which can also be applied by national competition authorities.
The initiation of proceedings by the Commission relieves the competition authorities of the Member States of their competence to apply EU competition rules to the practices concerned.
The Commission has informed the companies concerned and the competition authorities of the Member States that it has opened proceedings in this case.
There is no legal deadline for bringing an antitrust investigation to an end. The duration of an investigation depends on a number of factors, including the complexity of the case, the cooperation of the undertakings with the Commission and the exercise of the rights of defence.
In a separate investigation, the Commission is also assessing whether producers or traders of bioethanol have fixed prices or shared markets and customers, in violation of Article 101 TFEU.
Compliments of the European Commission