The European Union announced it is launching an anti-dumping investigation agaisnt U.S. bio-ethanol.

The dumping case alleges U.S. subsidies issued in the form of tax credits and a biofuel grant program including local state support in Illinois, Minnesota, Nebraska and South Dakota, are hurting companies in Europe, reports AFP.

A E.U. association of renewable ethanol producers ePURE alleges there has been a 500 perecent increase in the number of E.U. imports of U.S. ethanol between 2008 and 2010, reported the French wire agency.

The EU already has tarrifs in place against U.S. and Canadian biodiesel.

The European Commission has 15 months to address the complaint, and if the E.U. commissioners uphold the complaint, tarrifs could be levied against the U.S. fuel.

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