The European biodiesel industry says it will soon launch legal action against its US competitors, alleging that unfairly subsidised American production is undercutting it in the EU market. The European Biodiesel Board told the Financial Times it would by mid-April ask the European Commission to impose one or both of two kinds of import tariff on US imports. These tariffs are "anti-dumping" levies, used against exports sold more cheaply than in the home market, and "countervailing duties", designed to offset the effect of government subsidy. The conflict is the latest in a string of disputes surrounding the growing international trade in biofuels. European biodiesel companies, which have been cutting production sharply, have threatened action against American producers for several months. Raffaello Garofalo, secretary-general of the EBB, said the legal case was being finalised and the formal request would be made to the Commission by mid-April. The Commission will then examine the case according to a standard set of procedures, which require the European biodiesel industry to show that it is being substantially damaged by American imports. "We are very confident that the Commission will take up the case," Mr Garofalo said. "Many European producers have said that if things continue the way they are, the situation will become unbearable." The US government currently grants a subsidy of $1 per US gallon for biodiesel that is blended with conventional diesel. Much attention has focused on a loophole in American biodiesel regulations known as "splash-and-dash", whereby a small amount of US fuel is blended with product from low-cost biofuel producers such as Argentina, in order to benefit from the tax break and then exported to Europe. The US National Biodiesel Board has said it has worked with Congress to try to eliminate such abuse. The EBB said that "splash-and-dash" was only a marginal part of its case against the US. "Ninety per cent of what is arriving in Europe is produced in America from American materials," Mr Garofalo said. The EU is the main global market for biodiesel, worth