EU Opens Biofuel Benchmarking Probe

The European Commission said on Monday it had opened a formal antitrust investigation to look into suspicions that three ethanol producers have colluded to manipulate benchmark prices used by the industry.

The Commission said in a statement it was assessing the actions of Abengoa SA of Spain, Belgium's Alcogroup SA and Lantmannen ek for of Sweden after unannounced inspections over the past three years.

It said it had concerns that the companies may have colluded to manipulate ethanol benchmarks published by the price reporting agency Platts, such as by agreeing to submit or support bids to hike the benchmark and so drive up ethanol prices.

It added that the practice could lead to a reduction of the use of biofuels as an alternative to fossil fuels, with negative consequences for consumers and the environment.

"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," EU Competition Commissioner Margrethe Vestager said in a statement.

The Commission is also looking into whether producers or traders of bioethanol fixed prices or shared markets and customers, with a series of unannounced inspections carried out in March.

Reporting By Philip Blenkinsop