EU Extends Group II Import Quota


EU Extends Group II Import Quota
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A year after its initial implementation, the European Union has extended for six more months its quota and duty on imports of API Group II base stocks.

The regulation applies a tax of 3.7% to Group II viscosity grades ranging from 150 SUS to 600 SUS imported from nations that do not have free trade agreements with the EU. Group II producing nations such as Canada and South Korea have agreements giving them preferred status with the EU, while countries such as the United States and Saudi Arabia do not.

A European Commission spokesperson confirmed Monday that the first 200,000 metric tons of Group II imports from nations subject to the duty will again be exempted. The quota is for a six-month period, so counting toward it would reset on July 1.

The regulation was a subject of controversy when adopted in 2019, supported by ExxonMobil, which opened Europe’s first large Group II plant in Rotterdam, Netherlands, early that year, but opposed by importers and industry groups such as the Union of the European Lubricants Industry.

Some opponents argued for a larger quota, but actual import volumes did not breach the 200,000 ton level during the first half of 2020 – possibly in part because the COVID-19 pandemic reduced demand. In December, commodities market information provider ICIS reported that the quota was also unlikely to be reached for the second half of the year.