"The European Union's trade authority plans to start an investigation into whether U.S. bioethanol exporters are receiving unfair state subsidies and selling their fuel to Europe at illegally low prices, diplomats said on Tuesday."

"The European Commission investigation could result in import tariffs as early as next year on hundreds of millions of litres of the fuel if EU officials unearth evidence of unfair trade practices in the United States.

'The Commission wants an investigation, and EU capitals will not stand in the way, so it will begin this month,' said one diplomat.

Biofuel producers have been racing to secure a slice of Europe's lucrative renewable energy market, where demand is boosted by official targets designed to fight climate change and wean the bloc off higher-polluting fossil fuels."

Juliane von Reppert-Bismarck reports for Reuters November 16, 2011. [2]