Carbon Activated Tianjin Co., Ltd. v. United States , 2023 CIT 109 ( 2023 )

Slip Op. 23-
UNITED STATES COURT OF INTERNATIONAL TRADE
CARBON ACTIVATED TIANJIN CO.,
LTD. AND CARBON ACTIVATED
CORPORATION,
Plaintiffs,
and
CALGON CARBON CORPORATION,
NORIT AMERICAS, INC., AND DATONG
JUQIANG ACTIVATED CARBON CO.,
LTD., ET AL.,
Consolidated Plaintiffs,
Before: Mark A. Barnett, Chief Judge
Consol. Court No. 22-00017
v.
UNITED STATES,
Defendant,
and
CALGON CARBON CORPORATION,
NORIT AMERICAS, INC., CARBON
ACTIVATED TIANJIN CO., LTD.,
CARBON ACTIVATED CORPORATION,
AND DATONG JUQIANG ACTIVATED
CARBON CO., LTD., ET AL.,
Defendant-Intervenors.
Consol. Court No. 22-00017 Page 2
OPINION
[Sustaining the U.S. Department of Commerce’s final results in the thirteenth
administrative review of the antidumping duty order on certain activated carbon from the
People’s Republic of China]
Dated: July 21, 2023
John M. Peterson, Richard F. O’Neill, and Patrick B. Klein, Neville Peterson LLP, of
New York, NY, for Plaintiffs/Defendant-Intervenors Carbon Activated Tianjin Co., Ltd.,
and Carbon Activated Corporation.
Francis J. Sailer, Dharmendra N. Choudhary, and Jordan C. Kahn, Grunfeld, Desiderio,
Lebowitz, Silverman & Klestadt LLP, of Washington, DC, for Consolidated
Plaintiffs/Defendant-Intervenors Datong Juqiang Activated Carbon Co., Ltd., Datong
Juqiang Activated Carbon USA, LLC, Ningxia Guanghua Cherishmet Activated Carbon
Co., Ltd., and Datong Municipal Yunguang Activated Carbon Co., Ltd.
John M. Herrmann, Julia A. Kuelzow, R. Alan Luberda, and Melissa M. Brewer, Kelley
Drye & Warren LLP, of Washington, DC, for Consolidated Plaintiffs/Defendant-
Intervenors Calgon Carbon Corporation and Cabot Norit Americas, Inc.
Antonia R. Soares, Senior Trial Counsel, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice, of Washington, DC, for Defendant United States. With her
on the brief were Brian M. Boynton, Acting Assistant Attorney General, Patricia M.
McCarthy, Director, and Claudia Burke, Assistant Director. Of counsel on the brief was
Ashlande Gelin, Attorney, Office of the Chief Counsel for Trade Enforcement and
Compliance, U.S. Department of Commerce, of Washington, DC.
Barnett, Chief Judge: This consolidated matter is before the court following the
U.S. Department of Commerce’s (“Commerce” or “the agency”) final results in the
thirteenth administrative review (“AR13”) of the antidumping duty order on certain
activated carbon from the People’s Republic of China (“China”) for the period of review
(“POR”) April 1, 2019, through March 31, 2020. See Certain Activated Carbon From the
People’s Republic of China, 86 Fed. Reg. 73,731 (Dep’t Commerce Dec. 28, 2021)
(final results of antidumping duty admin. review; and final determination of no
Consol. Court No. 22-00017 Page 3
shipments; 2019–2020) (“Final Results”), ECF No. 16-2, and accompanying Issues and
Decision Mem., A-570-904 (Dec. 17, 2021) (“I&D Mem.”), ECF No. 16-3.1
There are three sets of challenges to the Final Results. Plaintiffs Carbon
Activated Tianjin Co., Ltd., and Carbon Activated Corporation (collectively, “Carbon
Activated”) challenge Commerce’s selection of surrogate values for carbonized material,
coal tar, hydrochloric acid, and steam, selection of surrogate financial ratios, and
valuation of ocean freight. See Confid. [Carbon Activated’s] Mem. of Law. in Supp. of
Pl.’s Rule 56.2 Mot. for J. of the Agency R. (“Pls.’ Rule 56.2 Mem.”), ECF No. 33-1;
Reply Br. in Supp. of Pls.’ [Carbon Activated’s] Rule 56.2 Mot. for J. on the Agency R.
(“Pls.’ Reply”), ECF No. 45.
Consolidated Plaintiffs Datong Juqiang Activated Carbon Co., Ltd., Datong
Juqiang Activated Carbon USA, LLC, Ningxia Guanghua Cherishmet Activated Carbon
Co., Ltd., and Datong Municipal Yunguang Activated Carbon Co., Ltd. (collectively,
“DJAC,” and together with Carbon Activated, “Respondents”) also challenge
Commerce’s selection of surrogate values for carbonized materials and coal tar, as well
as Commerce’s selection of surrogate financial ratios. See Confid. Mem. of Law in
Supp. of Consol. Pls.’ Mot. for J. on the Agency R. Pursuant to USCIT Rule 56.2
(“DJAC’s Rule 56.2 Mem.”), ECF No. 30; Consol. Pls.’ Reply to Def. and Def.-Ints.’
1 The administrative record filed in connection with the Final Results is divided into a
Public Administrative Record (“PR”), ECF No. 16-5, and a Confidential Administrative
Record (“CR”), ECF No. 16-4. Parties filed joint appendices containing record
documents cited in their briefs. See Public J.A. (“PJA”), ECF No. 47; Confid. J.A.
(“CJA”), ECF No. 48. Parties subsequently filed supplemental joint appendices with
record documents not contained in the CJA or PJA. See Public Resp. to Ct.’s Req.,
ECF No. 50; Confid. Resp. to Ct.’s Req. (“Suppl. CJA”), ECF No. 51.
Consol. Court No. 22-00017 Page 4
Resps. to Consol. Pls.’ Rule 56.2 Mot. for J. on the Agency R (“DJAC’s Reply”), ECF
No. 46.
Consolidated Plaintiffs Calgon Carbon Corporation and Norit Americas, Inc.
(together, “Calgon” or “Petitioners”) challenge Commerce’s selection of the surrogate
value for bituminous coal and Commerce’s reliance on the consumption of bituminous
coal as reported by DJAC. See Confid. Consol. Pls.’ Rule 56.2 Mem. of Law in Supp. of
Mot. for J. on the Agency R. (“Calgon’s Rule 56.2 Mem.”), ECF No. 32-1; Confid.
Consol. Pls.’ Reply to Def.’s and Def.-Ints.’ Resps. to Consol. Pls.’ Mot. for J. on the
Agency R. (“Calgon’s Reply”), ECF No. 43.
Defendant United States (“the Government”) filed a response supporting the
Final Results. See Def.’s Resp. to Rule 56.2 Mots. for J. on the Agency R. (“Def.’s
Resp.”), ECF No. 36. DJAC, as defendant-intervenors in a member case, and Calgon,
as defendant-intervenors in the lead case, also filed responses supporting certain
elements of the Final Results. See Consol. Def.-Int. DJAC’s Resp. to Consol. Pl. Pet’rs’
Mot. for J. on the Agency R. Pursuant to USCIT Rule 56.2 (“DJAC’s Resp.”), ECF No.
38; Def.-Ints.’ Resp. Br. (“Calgon’s Resp.”), ECF No. 37.2
JURISDICTION AND STANDARD OF REVIEW
This court has jurisdiction pursuant to section 516A(2)(B)(iii) of the Tariff Act of
1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) (2018)3 and 28 U.S.C. § 1581(c).
2 Although Carbon Activated intervened as a defendant-intervenor in a member case, it
did not file a response brief in the lead case. See Docket.
3 Citations to the Tariff Act of 1930, as amended, are to Title 19 of the U.S. Code, and
references to the U.S. Code are to the 2018 edition, unless otherwise stated.
Consol. Court No. 22-00017 Page 5
The court will uphold an agency determination that is supported by substantial evidence
and otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i).
BACKGROUND
I. Administrative Proceedings
On June 18, 2020, Commerce initiated AR13 of the antidumping duty order on
certain activated carbon from China. See Initiation of Antidumping and Countervailing
Duty Admin. Reviews, 85 Fed. Reg. 35,068, 35,070–71 (Dep’t Commerce June 8,
2020), PR 61, PJA Tab 3. Commerce selected Carbon Activated and DJAC as
“mandatory respondents” for individual examination in AR13 because “they were the
two largest exporters of the subject merchandise, by volume, during the POR.” Prelim.
Decision Mem. (“Prelim. Mem.”) at 2, PR 270, PJA Tab 20.
Because Commerce considers China to be a nonmarket economy (“NME”)
country for purposes of the antidumping laws, see id. at 4, the agency determines
normal value by valuing the factors of production used in producing subject
merchandise, general expenses, profit, and “the cost of containers, coverings, and other
expenses” in a surrogate market economy country. 19 U.S.C. § 1677b(c)(1).
Commerce identified six potential surrogate countries: Brazil, Malaysia, Mexico,
Romania, Russia, and Turkey. Prelim. Mem. at 11. On January 19, 2021, Commerce
invited interested parties to comment on Commerce’s list of economically comparable
countries, surrogate country selection, and surrogate value data. Id. at 10.
Respondents and Petitioners submitted comments regarding the surrogate country
selection process; Petitioners recommended that “Commerce select Malaysia and/or
Consol. Court No. 22-00017 Page 6
Mexico as either the primary and/or secondary [surrogate country],” while Respondents
“did not make an explicit recommendation” as to what country should be the primary
surrogate country and submitted data from a variety of countries to value the factors of
production. Id. at 12.
For the Preliminary Results, Commerce selected Malaysia as the primary
surrogate country because Malaysia was at the same level of economic development as
China, was a significant producer of comparable merchandise, and had reliable and
usable data to value all factors of production and to calculate surrogate financial ratios.
Id. at 17. For the Final Results, Commerce again selected Malaysia as the primary
surrogate country. See, e.g., I&D Mem. at 34 (identifying Malaysia as the primary
surrogate country in the context of Commerce’s selection of surrogate financial
statements).
Carbon Activated, DJAC, and Calgon subsequently challenged various aspects
of the Final Results.
II. Legal Background
An antidumping duty is “the amount by which the normal value exceeds the
export price (or the constructed export price) for the merchandise.” 19 U.S.C. § 1673.
When, as here, “the subject merchandise is exported from a nonmarket economy
country,” Commerce determines “normal value” by valuing the “factors of production” 4
4The “factors of production” include but are not limited to: “(A) hours of labor required,
(B) quantities of raw materials employed, (C) amounts of energy and other utilities
consumed, and (D) representative capital cost, including depreciation.” 19 U.S.C.
§ 1677b(c)(3).
Consol. Court No. 22-00017 Page 7
used in producing the subject merchandise, and “an amount for general expenses and
profit plus the cost of containers, coverings, and other expenses” in a surrogate market
economy country. Id. § 1677b(c)(1).
Section 1677b(c)(1) requires Commerce to value the factors of production “based
on the best available information regarding the values of such factors in a[n appropriate]
market economy country or countries.” Id. In deciding what is an “appropriate” market
economy country, Commerce must utilize, “to the extent possible, the prices or costs of
factors of production” in a market economy country that is at “a level of economic
development comparable to that of the [NME] country,” and is a “significant producer[]
of comparable merchandise.” Id. § 1677b(c)(4).
Commerce normally will value all factors of production in a single surrogate
country, 19 C.F.R. § 351.408(c)(2), referred to as the primary surrogate country, Jiaxing
Brother Fastener Co. v. United States (“Jiaxing II”), 822 F.3d 1289, 1294 & n.3 (Fed.
Cir. 2016). To select a primary surrogate country, Commerce has adopted a four-step
approach. See Import Admin., U.S. Dep't of Commerce, Non–Market Economy
Surrogate Country Selection Process, Policy Bulletin 04.1 (2004),
https://enforcement.trade.gov/policy/bull04-1.html (last visited July 21, 2023) (“Policy
Bulletin 04.1”). First, the Office of Policy assembles a list of potential surrogate
countries that are at a comparable level of economic development to the NME country
based on per capita gross national income as reported by the World Bank (the “OP
List”). Id. at 2. Potential surrogate countries are “not ranked” and are “considered
equivalent in terms of economic comparability.” Id. Second, among the potential
Consol. Court No. 22-00017 Page 8
surrogate countries, Commerce identifies countries that produce comparable
merchandise. Id. Third, Commerce determines whether any of the potential surrogates
that produce comparable merchandise are significant producers of comparable
merchandise. Id. at 3. Whether production is “significant” is generally determined in
relation to “world production of, and trade in, comparable merchandise.” Id. Finally, if
more than one country satisfies the first three criteria, Commerce selects the country
with the best surrogate value data as the primary surrogate country. Id. at 4; see also
Jiaxing II, 822 F.3d at 1293 (citation omitted) (describing the four-step process).
Commerce will “only resort to a second surrogate country if data from the primary
surrogate country are unavailable or unreliable.” Jiaxing Brother Fastener Co. v. United
States (“Jiaxing I”), 38 CIT 1404, 1412, 11 F. Supp. 3d 1326, 1332–33 (2014), aff’d
Jiaxing II, 822 F.3d at 1289.
Commerce, in selecting surrogate values, “generally selects, to the extent
practicable, surrogate values that are publicly available, are product-specific, reflect a
broad market average, and are contemporaneous with the period of review.” Jiaxing II,
822 F.3d at 1293 (citing Qingdao Sea-Line Trading Co. v. United States, 766 F.3d 1378,
1386 (Fed. Cir. 2014)); 19 C.F.R. 351.408(c)(1), (4) (directing Commerce to select
“publicly available,” “non-proprietary information” to value factors of production and
“manufacturing overhead, general expenses, and profit”). Commerce also prefers
surrogate values that are input-specific and tax- and duty-exclusive. See Policy Bulletin
04.1 at 4.
Consol. Court No. 22-00017 Page 9
There is no hierarchy for applying the surrogate value selection criteria. See,
e.g., United Steel & Fasteners, Inc. v. United States, 44 CIT __, __, 469 F. Supp. 3d
1390, 1398–99 (2020); Hangzhou Spring Washer Co. v. United States, 29 CIT 657,
672, 387 F. Supp. 2d 1236, 1250–51 (2005) (stating that the court “does not decide . . .
whether contemporaneity should be valued over specificity” absent “statutory
instruction” to do so). Commerce therefore has broad discretion to choose which
criteria to emphasize in selecting the “best available information” so long as it does so in
conformity with the substantial evidence standard. QVD Food Co. v. United States, 658
F.3d 1318, 1323 (Fed. Cir. 2011) (citing Ad Hoc Shrimp Trade Action Comm. v. United
States, 618 F.3d 1316, 1322 (Fed. Cir. 2010)). Commerce must articulate a “rational
and reasonable relationship” between the surrogate value and the factor of production it
represents. Globe Metallurgical Inc. v. United States, 28 CIT 1608, 1622, 350 F. Supp.
2d 1148, 1160 (2004). Due to the discretionary, fact-specific nature of Commerce’s
determinations, the court does not address “whether the information Commerce used
was the best available, but rather whether a reasonable mind could conclude that
Commerce chose the best available information.” Jiaxing II, 822 F.3d at 1300–01.
DISCUSSION
I. Calculation of Surrogate Financial Ratios
a. Additional Background
The administrative record in AR13 contained the financial statements of four
companies. See I&D Mem. at 32–33. Two financial statements were from Malaysian
producers of activated carbon, Century Chemical Works Sdn. Bhd. (“Century”) and
Consol. Court No. 22-00017 Page 10
Bravo Green Sdn. Bhd. (“Bravo Green”). Id. at 33. The record also contained financial
statements from Joint Stock Company Sorbent (“JSC Sorbent”), a Russian producer of
respiratory protection products and activated carbon, and S.C. Romcarbon S.A.
(“Romcarbon”), a Romanian producer of polyethylene, polypropylene, polyvinyl chloride,
polystyrene processing, filters and protective materials. Id.
For the Final Results, Commerce determined that the financial ratios of Century
and Bravo Green were the best available information for the purpose of calculating
surrogate financial ratios for multiple reasons. See id. at 35. First, Commerce
determined that Malaysia was the only country on the OP List that was a significant
producer of comparable merchandise because it was the only “net exporter” of subject
merchandise. Id. at 32–33. Second, Commerce determined that while Century and
Bravo Green’s principal business activity was the manufacture and sale of activated
carbon, Romcarbon’s financial statements indicated that its principal business activity
was unrelated to the manufacture or sale of activated carbon, and it was “difficult to
ascertain what portion of JSC Sorbent’s portfolio relate[d] to [other business activities]
and what portion relate[d] to the production of activated carbon.” Id. at 33. Finally,
Commerce explained that having found Malaysia to be the primary surrogate country,
Century and Bravo Green’s financial statements were preferable because of the
agency’s preference for valuing all factors of production in one surrogate country and
Consol. Court No. 22-00017 Page 11
Malaysia was the only country that provided multiple usable financial statements.5 Id. at
34.
b. Parties Contentions
Respondents challenge Commerce’s calculation of surrogate financial ratios
using the financial statements of Century and Bravo Green. See Pls.’ Rule 56.2 Mem.
at 8–26; Pls.’ Reply at 3–12; DJAC’s Rule 56.2 Mem. at 9–24; DJAC’s Reply at 1–7.
Respondents first contend that Commerce unlawfully calculated surrogate financial
ratios because agency policy prohibits Commerce from applying fixed criteria, such as
whether a country is a “net exporter” of subject merchandise, in determining whether a
surrogate country is a “significant producer” of subject merchandise. See Pls.’ Rule
56.2 Mem. at 11–17; Pls.’ Reply at 5–8; DJAC’s Rule 56.2 Mem. at 9–11; DJAC’s Reply
at 2–4. Respondents further contend that (i) Romania is a “significant producer” of
subject merchandise, Pls.’ Rule 56.2 Mem. at 17–21; DJAC’s Rule 56.2 Mem. at 11–16,
(ii) the Malaysian financial statements do not provide reliable financial ratios, Pls.’ Rule
56.2 Mem. at 21–24; Pls.’ Reply at 8–10; DJAC’s Rule 56.2 Mem. at 16–20; DJAC’s
Reply at 4–6, and (iii) the Romcarbon and JSC financial statements are superior to
5Commerce explained that the agency has a “long-standing preference to use multiple
companies’ financial statements whenever practicable because ‘using the greatest
number of financial statements will yield the most representative data from the relevant
manufacturing sector to calculate accurate surrogate financial ratios.’” I&D Mem. at 32
& n.216 (quoting Issues and Decision Mem. for Wooden Bedroom Furniture from China,
A-570-890 (Aug. 8, 2007) at 86,
https://access.trade.gov/Resources/frn/summary/prc/E7-16584-1.pdf (last visited July
21, 2023).
Consol. Court No. 22-00017 Page 12
those of Century and Bravo Green, Pls.’ Rule 56.2 Mem. at 24–26; Pls.’ Reply at 10–11;
DJAC’s Rule 56.2 Mem. at 20–24; DJAC’s Reply at 6–7.
The Government and Calgon contend that Commerce’s selection of financial
statements to calculate surrogate financial ratios is supported by substantial evidence.
See Def.’s Resp. at 12–22; Calgon’s Resp. at 9–17. The Government and Calgon first
argue that Commerce lawfully determined that Malaysia was the only significant
producer of subject merchandise, see Def.’s Resp. at 12–16; Calgon’s Resp. at 10–13,
and, thus, the financial statements of Century and Bravo Green represented the best
available information to calculate the financial ratios. See Def.’s Resp. at 16–17;
Calgon’s Resp. at 14–17.
c. Analysis
As an initial matter, Respondents contend that Commerce’s selection of financial
statements was flawed based on the agency’s finding that only Malaysia was a
“significant producer” of comparable merchandise. See Pls.’ Rule 56.2 Mem. at 11–21;
DJAC’s Rule 56.2 Mem. at 9–16. Respondents allege that in determining what country
was a “significant producer,” Commerce limited its analysis to whether a country was a
“net exporter,” and failed to consider the data quality of proposed surrogate values from
OP List countries. See Pls.’ Rule 56.2 Mem. at 11-17; DJAC’s Rule 56.2 Mem. at 9–11.
As noted above, in valuing factors of production, Commerce is directed to use,
“to the extent possible,” data from an economically comparable market economy
country that is a “significant producer[ ] of comparable merchandise.” 19 U.S.C.
§ 1677b(c)(4). “Significant producer” is not defined in the relevant statute or
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Commerce’s regulations. See Policy Bulletin 04.1 at 1. Because the term is not
defined, Commerce looks to the legislative history and Policy Bulletin 04.1 for guidance.
See, e.g., I&D Mem. at 31. Policy Bulletin 04.1 states that in determining whether a
country is a “significant producer” of comparable merchandise, “that country should not
be judged against the [non-market economy] country’s production level or the
comparative production of . . . [OP List countries].” Policy Bulletin 04.1 at 3. Instead,
the determination of whether a country is a “significant producer” “should be made
consistent with the characteristics of world production of, and trade, in comparable
merchandise.” Id. Policy Bulletin 04.1 also lists examples of production levels that
would make a country a “significant producer,” including being a “significant net
exporter.” Id. at 1 (discussing H.R. Rep. No. 100-576, at 590 (1988) (Conf. Rep.)).
Policy Bulletin 04.1 makes clear that “the standard for ‘significant producer’ will vary
from case to case” and that “fixed standards . . . have not been adopted.” Id. at 3.
Commerce’s determination that Malaysia was the only “significant producer” of
subject merchandise is supported by substantial evidence. Commerce stated that
Malaysia was the only significant producer of comparable merchandise because it was
the only OP List country that was a “net exporter,” a metric that is both supported by
Commerce’s policy and indicative of Malaysia having produced sufficient activated
carbon to ensure that it exported more than it imported. See I&D Mem. at 32–33; see
also Policy Bulletin 04.1. In addition to this metric, Commerce relied on financial
statements on the record to determine whether OP List countries were “significant
producers.” I&D Mem. at 33; see also Prelim. Mem. at 16 (explaining that the
Consol. Court No. 22-00017 Page 14
statements “provide[] more direct evidence of production of identical, and therefore,
comparable merchandise”). Commerce compared those financial statements to that of
Romcarbon, which indicated that activated carbon was not Romcarbon’s principal
manufacturing activity and thus not evidence of “significant production” of activated
carbon in Romania. See I&D Mem. at 33.
Respondents argue that in the eleventh administrative review of activated carbon
from China (“AR11”), the court invalidated Commerce’s finding that Romania was not a
significant producer of subject merchandise. See Pls.’ Rule 56.2 Mem. at 19–20; DJAC
Rule 56.2 Mem. at 15–16; see also Carbon Activated Tianjin Co. v. United States
(“Carbon Activated AR11”), 45 CIT __, __, 503 F. Supp. 3d 1278, 1286 (2021).
However, in that case, the court faulted Commerce for failing to explain its analysis or
reference the value of any country’s exports after finding that no country on the OP List
was a net exporter by volume. Carbon Activated AR11, 503 F. Supp. 3d at 1286. Here,
however, Commerce has determined that Malaysia is a net exporter both in terms of
quantity and value. See I&D Mem. at 32.
Furthermore, in the Final Results, Commerce did not rely solely on the fact that
Malaysia was the only significant producer of activated carbon to support its selection of
Century’s and Bravo Green’s financial statements. Instead, despite continuing to find
that Romania was not a significant producer of activated carbon, Commerce compared
Romcarbon’s financial statements to those of Century and Bravo Green. Id. at 33–35.
Commerce acknowledged that the Malaysian financial statements were “not as detailed”
as the agency preferred but explained that the financial statements still “provide[d]
Consol. Court No. 22-00017 Page 15
sufficient information to calculate surrogate ratios for factory overhead costs, [selling,
general, and administrative] expenses and profit.” Id. at 35. Commerce explained that
any lesser detail was outweighed by the fact that Century and Bravo Green’s principal
business activity was the manufacture and sale of subject merchandise; by Commerce’s
preference to use financial statements from the primary surrogate country; and by
Commerce’s preference to use financial statements from a country with multiple usable
financial statements on the record. See id. at 34.
While Respondents would have preferred a different outcome to Commerce’s
analysis, that is not a basis for the court to reject the agency’s conclusion.
Respondents simply restate their arguments without identifying any gaps in
Commerce’s consideration of the issues. Because Commerce adequately explained its
selection of Century and Bravo Green’s financial statements as discussed above, the
court finds that Commerce’s decision on this issue is supported by substantial evidence.
II. Valuation of Carbonized Material
a. Additional Background
For the Final Results, Commerce valued coal-based carbonized material using
Malaysian data under HTS 4402.90.1000, which covers “coconut shell charcoal.”6 I&D
Mem. at 38. Respondents argued before Commerce that the agency should instead
value coal-based carbonized material using Turkish data under HTS 4402.90, covering
“Wood Charcoal (Including Shell or Nut Charcoal), Excluding that of Bamboo.” Id. at 35.
6Specifically, HTS 4402.90.1000 covers “Wood Charcoal (Including Shell or Nut
Charcoal, Other Than of Bamboo: Of Coconut Shell).” I&D Mem. at 38.
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Commerce, however, concluded that the Malaysia data under HTS 4402.90.1000 was
the best available information on the record because, like the coal-based carbonized
material used by Respondents, coconut shell charcoal is steam activated and has
significantly fewer micropores than wood-based carbonized materials. Id. at 38–39.
Furthermore, Commerce noted that the record indicated that Respondents did not use
carbonized material made from wood or nut charcoal to produce subject merchandise.
Id. at 39.
b. Parties’ Contentions
Respondents contend that Commerce erred in selecting Malaysian coconut shell
charcoal data for use as the surrogate value for carbonized materials because (i) the
data was non-contemporaneous with the POR; (ii) the record indicated that “coal-based
carbonized material” is distinct from coconut shell material and “possesses
characteristics that place it between coconut shell charcoal and wood-based charcoal”;
and because the court rejected Commerce’s use of this data in the twelfth
administrative review on certain activated carbon from China (“AR12”). See Pls.’ Rule
56.2 Mem. at 26–32; Pls.’ Reply at 12–15; DJAC’s Rule 56.2 Mem. at 25-34; DJAC’s
Reply at 7–14. Respondents contend that Commerce should have instead selected
Turkish import data for HTS subheading 4402.90 as the surrogate value for carbonized
materials. Pls.’ Rule 56.2 Mem. at 32–33; DJAC’s Rule 56.2 Mem. at 34-37.
The Government and Calgon contend that substantial evidence supports
Commerce’s use of Malaysian import data under HTS 4402.90.1000 to calculate the
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surrogate value for carbonized material. See Def.’s Resp. at 22–25; Calgon’s Resp. at
17–24.
c. Analysis
As an initial matter, “each administrative review is a separate exercise of
Commerce’s authority that allows for different conclusions based on different facts in the
record.” Jiaxing II, 822 F.3d at 1299 (quoting Qingdao Sea-Line, 766 F.3d at 1387).
Thus, the court’s treatment of Commerce’s selection of Malaysian coconut shell
charcoal import data in AR12 does not necessarily mean that Commerce improperly
selected that data in AR13.7
In Carbon Activated Tianjin Co. v. United States (“Carbon Activated AR12”), 46
CIT __, 586 F. Supp. 3d 1360 (2022), the court faulted Commerce for selecting coconut
shell charcoal to value carbonized material because although Commerce found that the
respondent’s suppliers did not purchase carbonized material made from wood or nut
charcoal, Commerce failed to make an analogous finding as to whether respondent’s
suppliers purchased carbonized material made from coconut shell charcoal. Id. at
1379. The court concluded that “[a]bsent evidence [of use of] coconut shell charcoal,
Commerce’s selection of [coconut shell charcoal] over [other wood charcoal] was
unsupported by substantial evidence.” Id.Here, unlike in the original determination in AR12, Commerce provided a
reasoned explanation as to why coconut shell charcoal was a more appropriate proxy
7Furthermore, the court sustained Commerce’s use of import data under HTS
4402.90.1000 to value carbonized materials on remand. See Carbon Activated Tianjin
Co. v. United States, Slip Op. 23-66, 2023 WL 3151091, at *4–5 (CIT Apr. 28, 2023).
Consol. Court No. 22-00017 Page 18
for the coal-based carbonized material used by respondents than wood charcoal. See
I&D Mem. at 38–39. First, the record indicates that “both coconut shell- and coal-based
carbonized material are steam activated[,] whereas wood-based carbonized material is
generally chemically activated,” impacting “the ultimate physical structure of the
carbonized material.” Id. at 38. Second, the record showed that coconut shell- and
coal-based carbonized materials had a different level of filtration than wood-based
activated carbon. See id. at 39 (noting that coconut shell- and coal-based carbonized
materials have a “‘substantial’ amount of micropore surface area,” while wood-based
activated carbon has significantly fewer micropores and consists mostly of mesopores
and macropores).8 Furthermore, Commerce explained that while its selected data was
non-contemporaneous with the POR, the agency “favor[ed] specificity over
8 Respondents also contend that the agency overstated similarities between coconut
shell- and coal-based carbonized materials and failed to consider record evidence
contradicting the agency’s findings. Respondents argue that “wood based activated
carbon . . . is produced by either steam or phosphoric acid activation,” DJAC’s Rule
56.2 Mem. at 28 (quoting Final Surrogate Value Cmts. by DJAC and CA Tianjin (May
19, 2021) (“Final SV Submission”), Ex. 1-K, PR 230–42, PJA Tab 16); that “coconut
shell [charcoal]. . . contains 50 percent more micro-pores than bituminous coal,” id.(quoting Final SV Submission, Ex. 1-E); and that such evidence refutes Commerce’s
findings regarding the differences in the activation of, and filtration levels, of coconut
shell-, coal-, and wood-based carbon materials, see id. at 27–28; see also Pls.’ Rule
56.2 Mem. (arguing that there is overlap among the properties of wood-, coal- and
coconut-based carbonized materials). While a reasonable case might be made that
HTS 4402.90 provided the best surrogate value for carbonized material because the
physical characteristics of coal-based carbonized material placed it somewhere
between coconut shell charcoal and wood-based charcoal, Commerce made a
reasonable case that coconut shell charcoal and coal based carbonized material were
more similar because both were steam activated (as opposed to chemically-activated)
and had higher filtration levels than wood-based charcoal. See I&D Mem. at 38–39.
The fact that it is possible to “draw[ ] two inconsistent conclusions from the evidence”
does not mean that Commerce’s determination is unsupported by substantial evidence.
Consolo v. Fed’l Maritime Comm’n, 383 U.S. 607, 620 (1966).
Consol. Court No. 22-00017 Page 19
contemporaneity” in AR13 based on its finding that HTS 4402.90.1000 was the most
appropriate proxy to value the carbonized material used by Respondents. See id. at
40.9 Because Commerce adequately explained its reliance on Malaysian import data
under HTS 4402.90.1000 to value carbonized material, the court finds Commerce’s
determination on this issue is supported by substantial evidence.
III. Valuation of Coal Tar
a. Additional Background
For the Preliminary Results, Commerce valued coal tar using Malaysian HTS
subheading 2706.0010 covering “Mineral Tars, Including Reconstituted Tars.” See I&D
Mem. at 26.
In its supplemental questionnaire response, DJAC included a test report showing
that the predominant constituent of the coal tar utilized by its supplier was pitch, valued
under Malaysian HTS subheading 2708.10 (Pitch from Coal and Other Mineral Tars).
See Suppl. Section D Questionnaire Resp. (May 21, 2021) (“Suppl. SDQR”), Ex. SD-33,
CR 146–73, PR 243–56, CJA Tab 17. The average unit value (“AUV”) for coal tar was
around $1.56/kg, while the AUV for pitch was around $1.00/kg.11 See Surrogate Values
9 Finally, Respondents contend that Commerce should have used data from a second
surrogate country, Turkey, because of the lack of usable contemporaneous data from
Malaysia. See Pl.’s Rule 56.2 Mem. at 26–27, 32–33; DJAC’s Rule 56.2 Mem. at 34–
37. Having found that Commerce’s selection of Malaysian data is supported by
substantial evidence, there is no basis for the court to require the inclusion of additional
surrogate values from outside the primary surrogate country.
10 The court refers to HTS 2706.00 herein as “coal tar.”
11 Prices calculated using a conversion rate of 1 Malaysian Ringgit to $0.24 U.S. dollars.
See DJAC’s Rule 56.2 Mem. (citing to Case Br. of [Respondents] (Sept. 27, 2021)
(“Respondents’ Case Br.”) at 52 no.94, CR 214–215, PR 295–96, CJA Tab 28.
Consol. Court No. 22-00017 Page 20
for the Prelim. Results (June 18, 2021) (“Prelim. SV Mem.”) at 4, PR 273–74, PJA Tab
21.
Respondents requested that Commerce instead use the Malaysian domestic
market price of $0.216/kg to value coal tar. See Case Br. of [Respondents]
Respondents’ Case Br. at 61–62. Respondents’ argued that the Malaysian import data
for coal tar was unreliable because (1) it is uncommon for value-added products to be
sold at less than the price of raw material, (2) an occurrence of this unlikely scenario in
the Malaysian import data was likely caused by the predominance of Spanish imports
as an overall percentage of Malaysian coal tar import data, and (3) the domestic price of
coal tar was so much lower than the import price of coal tar that it would not make
economic sense to consume imported coal tar. See Respondents’ Case Br. at 57–60.
Commerce continued to value coal tar using import data under Malaysian HTS
subheading 2706.00 for the Final Results. I&D Mem. at 26–27. Commerce disagreed
with Respondents that the AUV for Malaysian HTS 2706.00, being higher than that of
Malaysian HTS 2708.10, distorted its reliability as a surrogate value, stating that “there
may be factors involved with pricing apart from the cost of manufacturing that impact a
product’s value” that could “cause a product with less ‘value-added’ like coal tar to be
more expensive than another product.” Id. at 26. Commerce stated that Respondents
failed to provide specific evidence explaining “why the pattern of Spanish imports into
Malaysia under HTS 2706.00 [were] priced higher than those under HTS 2708.10” and,
thus, had failed to show that Malaysian HTS 2706.00 import data were unreliable. Id. at
26–27. Finally, Commerce explained that it could not verify the alternative surrogate
Consol. Court No. 22-00017 Page 21
value data provided by Respondents because it came from a private market report and
the report did not explain the methodology used to obtain the reported prices. Id. at 27.
As a result, Commerce concluded that it could not “determine how representative the
prices are of a broad market average or if they are tax- and duty-exclusive.” Id.
b. Parties’ Contentions
Respondents argue that Malaysian HTS subheading 2706.00 import data is
unreliable because the AUV for HTS subheading 2706.00 significantly exceeded the
AUV of a higher value-added product, pitch. Pls.’ Rule 56.2 Mem. at 33–35; Pls.’ Reply
at 15–17; DJAC’s Rule 56.2 Mem. at 39–45; DJAC’s Reply at 14–17. Respondents
argue that Commerce failed to respond to arguments they advanced in the
administrative proceedings, failed to account for contrary record evidence regarding the
aberrancy of the AUV for Malaysian HTS 2706.00, and improperly refused to
benchmark Malaysian coal tar and pitch AUVs with the domestic market price data of
those products in Malaysia and other market economy countries. Pls.’ Rule 56.2 Mem.
at 33–37; DJAC’s Reply at 17–22.
The Government and Calgon contend that Commerce lawfully determined that
Malaysian import data under HTS subheading 2706.00 are the best available
information on the record to value coal tar. See Def.’s Resp. at 29; Calgon’s Resp. at
25–27. The Government contends that there is no record evidence demonstrating that
the data are aberrant based on the AUV of coal tar being higher than that of pitch, or
that the majority of imports of coal tar and pitch having originated from Spain rendered
the data unreliable. See Def.’s Resp. at 29–31. Finally, the Government contends that
Consol. Court No. 22-00017 Page 22
Commerce lawfully refused to benchmark Malaysian coal tar and pitch AUVs with the
domestic market price data of these products in Malaysia, Russia, and other market
economies because the record lacked publicly-available domestic prices to use as a
comparison with import AUVs. See id. at 31–33.
c. Analysis
Respondents advance the same arguments they raised before Commerce in
support of the contention that Malaysian import data under HTS subheading 2706.00
were aberrant and should not have been used to value coal tar. See Pls.’ Rule 56.2
Mem. at 33–37; DJAC’s Rule 56.2 Mem. at 39–45; DJAC’s Reply at 14–18. The court
finds that Commerce supported its reliance on Malaysian import data under HTS
2706.00 with substantial evidence. As Commerce explained, Respondents failed to
identify record support for their arguments. I&D Mem. at 26–27. With respect to the
argument that the Malaysian data was aberrant because the AUV of the value-added
product, pitch, was lower than that of coal tar, a raw material, Respondents did not
provide evidence to support their inference that the higher value-added product
necessarily should be priced higher on the same per weight basis. As Commerce
noted, there could be multiple factors affecting the pricing of coal tar and pitch imports
that would lead to these pricing trends, such as lower demand for the value-added
product or the nature of the further processing (e.g., combining the input with other low-
value, high-weight inputs). See id. at 26.
Respondents’ arguments that the Malaysian coal tar import data are tainted by
the predominance of Spanish imports as an overall percentage of Malaysian import data
Consol. Court No. 22-00017 Page 23
simply shifts this price relationship issue to the Spanish data, but again, as Commerce
found, Respondents failed to provide evidentiary support for their assertion that the
Spanish data were aberrant. See id. at 26–27. First, the import prices for Spanish coal
tar and pitch do not appear to be outliers as the import price for both are lower than the
overall Malaysian import prices for coal tar and pitch. See Respondents’ Case Br. at
58. Second, as discussed above, there are many factors that may impact domestic
prices in such a way that a value-added product sells at a lower per weight price than
the raw material used in its manufacture. The data on which Respondents rely provide
a potential example of such a factor. During the POR, Spain imported nearly five times
as much coal tar as it exported. See Final SV Submission, Ex. 2-M. Such an
imbalance could indicate that there is little domestic production of coal tar in Spain.
Furthermore, Respondents’ contention that the Spanish data was aberrant because
coal tar was traded in the Spanish market at a third of the price at which it was exported
to Malaysia, see DJAC’s Rule 56.2 Mem. at 41–42, is not supported by the data. While
the AUVs of Spanish exports vary significantly from country to country, there is no
evidence that exports to Malaysia were priced significantly higher than those to other
countries.12 See Final SV Submission, Ex. 2-M. Finally, Commerce supported its
determination by comparing Malaysian import data for coal tar to that of the import data
12 The AUV for exports of Spanish coal tar typically fell between $1.00/kg and 1.20/kg,
whereas Spanish exports to Malaysia fell squarely within that range ($1.034/kg). See
Final SV Submission, Ex. 2-M. The primary data point impacting driving down Spain’s
total AUV for coal tar during the POR was its exports to Denmark, which were priced
significantly lower than those to other countries ($0.35/kg) and accounted for over two-
thirds of total Spanish exports of coal tar. See id.
Consol. Court No. 22-00017 Page 24
for coal tar from other OP List countries, finding that the Malaysian prices were not
aberrant because the Malaysian prices were approximately 46 percent of the highest
import price for other OP List countries. I&D Mem. at 27.
Respondents suggest that Commerce should have benchmarked Malaysian coal
tar and pitch import prices against the domestic market prices in Malaysia, and that
Commerce unlawfully rejected the domestic pricing data contained in the Coal Tar and
Coal Tar Pitch Market Report (“Market Report”) Respondents submitted. Pls.’ Rule 56.2
Mem. at 36; DJAC’s Rule 56.2 Mem. at 42–46. While Respondents assert that the
Market Report was publicly available, Respondents have not identified record evidence
to support that assertion, nor did the court’s independent review of the record uncover
such evidence. Respondents contend that Commerce should have relied on the Market
Report because “[t]he record is devoid of any evidence suggesting the Market Report is
not freely available” and “[t]he Market Report is evidently not a price quote.” DJAC’s
Rule 56.2 Mem. at 19–20; see also Pls.’ Rule 56.2 Mem. at 36. However, it is
incumbent upon an interested party, and not Commerce, to create the record, see
Qingdao Sea-Line, 766 F.3d at 1386, and absent record evidence detracting from
Commerce’s decision to disregard the Market Report, Commerce’s determination to rely
on Malaysian HTS 2706.00 is supported by substantial evidence.
Consol. Court No. 22-00017 Page 25
IV. Valuation Of Hydrochloric Acid
a. Additional Background
To value hydrochloric acid,13 Commerce selected Malaysian import data for HTS
2806.10 which covers “hydrogen chloride (hydrochloric acid),” see I&D Mem. at 45, and
which constitutes a basket category including both anhydrous hydrogen chloride and
aqueous hydrochloric acid, see Pls.’ Rule 56.2 Mem. at 38. Commerce explained that,
because Malaysia is the primary surrogate country, its “regulatory preference for valuing
all [surrogate values] from one surrogate country” meant that its “first preference in
selecting [surrogate value] data . . . is to utilize publicly available prices within Malaysia.”
Id. Commerce, therefore, declined Respondents’ request to rely on Brazilian import
data under HTS subheading 2806.10.20. Id. at 45–46.
In response to Respondents’ argument that Malaysian HTS 2806.10 was not
specific to Carbon Activated’s inputs, which consisted only of aqueous HCl, Commerce
explained that record evidence “only demonstrate[d] the purity level of HCl . . . for a
portion of the total quantity of HCl used in production.” Id. at 46 & n.307 (citing Carbon
Activated’s Suppl. Section D Questionnaire Resp. (May 13, 2021), Ex. SD-10.1 (“Aug.
2019 Test Report”), CR 92, PR 220, Suppl. CJA Tab 2). Commerce also noted that the
record contained “certain information related to HCl” but that Respondents had “failed to
provide an explanation as to how these documents tie to the [surrogate value] and
actual consumption of the HCl . . . reported for the POR.” Id. at 46
13 “HCl” is the chemical formula for hydrogen chloride; the parties have used this
formula interchangeably with the terms hydrochloric acid and hydrogen chloride.
Consol. Court No. 22-00017 Page 26
b. Parties’ Contentions
Carbon Activated contends that substantial evidence does not support
Commerce’s use of Malaysian HTS subheading 2806.10 to value the HCl used by
Carbon Activated. Pls.’ Rule 56.2 Mem. at 37–39; Pls.’ Reply at 17–18. Carbon
Activated contends that HTS subheading 2806.10, which covers two forms of HCl, (i)
anhydrous or liquid HCI (without added water) and (ii) aqueous HCI (with added water),
was not specific to the diluted aqueous HCl Carbon Activated used, Pls.’ Rule 56.2
Mem. at 38, and, thus, Commerce should have valued its HCl inputs using import data
under Brazilian HTS subheading 2806.10.20, id. at 39.
The Government contends that Carbon Activated failed to substantiate its use of
aqueous HCI and that Commerce’s selection of the Malaysian data is otherwise
supported by substantial evidence. Def.’s Resp. at 33–35.
c. Analysis
It is Respondents’ burden to build a record that supports their desired outcome.
See QVD Food Co., 658 F.3d at 1324. Here, Commerce’s determination that Carbon
Activated failed to demonstrate the aqueous nature of all their HCl inputs is supported
by substantial evidence. See I&D Mem. at 46.
In support of their contention that they used only aqueous HCl in the production
of subject merchandise, Carbon Activated cites to a document of limited utility. See
Pls.’ Rule 56.2 Mem. at 38 (citing Aug. 2019 Test Report). The document, which is not
fully translated, contains two pages, one of which is titled “HCl (Liquid) Test Report,”
and includes the terms “date,” “concentration,” and “inspector.” Aug. 2019 Test Report.
Consol. Court No. 22-00017 Page 27
Carbon Activated claims that “HCl with purity levels less than 100 [percent] are
considered aqueous solutions,” and that the test report demonstrates that the
concentration level of the HCl supplied to Carbon Activated was aqueous. Pls.’ Rule
56.2 Mem. at 38.
As Commerce explained, the test report only demonstrated the purity level of HCl
for a portion of Carbon Activated’s purchases over a limited period of time. I&D Mem. at
46. It is reasonable for Commerce to require parties to demonstrate the purity level for
all purchased HCl; parties cannot submit limited information to Commerce and expect
the agency to extrapolate that data to all missing data to the benefit of the party.
Furthermore, Commerce explained that Respondents had failed to provide an
explanation as to how other record documents, including information relating to HCl
published by PubChem and a safety datasheet from Woodman Hill Ltd., tied to the
surrogate value and actual consumption of HCl reported for the POR. I&D Mem. at 46
& n. 308 (citing DJAC and Carbon Activated Surrogate Value Comments (Mar. 4, 2021)
(“Respondent SV Cmts.”), Exs. 6D, 6E, PR114–76, PJA Tab 11). Nor does Carbon
Activated attempt to demonstrate the relevance of these documents before the court
(except to demonstrate the existence of two forms of HCI). Pls.’ Rule 56.2 Mem. at 38.
The existence of two forms of HCI fails to establish that the substance reported in the
test report “HCl (Liquid)” constitutes aqueous HCI; while the test report indicates the
“concentration” of HCl, it does not explain that the only contaminant diluting its purity
was water. See Aug. 2019 Test Report.
Consol. Court No. 22-00017 Page 28
Having reviewed the record evidence and Commerce’s explanation, the court
finds that Commerce’s determination to value HCl using Malaysian import data for HTS
subheading 2806.10 is supported by substantial evidence.
V. Valuation of Steam
a. Additional Background
Commerce valued steam using Malaysian import data for HTS 2711.11, which
covers liquefied natural gas. I&D Mem. at 48.
b. Parties’ Contentions
Carbon Activated contends that HTS subheading 2711.21, covering natural gas
in a gaseous state constitutes “the best available information” on the record. Pls.’ Rule
56.2 Mem. at 40–43; Pls.’ Reply at 18–19. Carbon Activated argues that the agency
failed to support its selection of HTS 2711.11 given that record evidence shows that
Carbon Activated consumed gaseous natural gas and that domestic gaseous natural
gas prices in Malaysia were available at “significantly lower prices” during the POR,
contradicting the reliability of Malaysian HTS 2711.11 import data. Pls.’ Rule 56.2 Mem.
at 40–43.
The Government responds that Malaysian import data for liquefied natural gas
was the best available information in the record to value steam because this data was
publicly available and from the primary surrogate country. See Def.’s Resp. at 35. The
Government further contends that import data for liquefied natural gas was a more
appropriate source to value steam input than import data under Malaysia HTS 2711.21
because the data for liquefied natural gas imports “represent a significantly larger
Consol. Court No. 22-00017 Page 29
volume of imports . . . from multiple countries . . . covering the entirety of the period of
review whereas the import data under HTS 2711.21 represent a smaller volume of
imports from only one country [ ] covering only two months of the period of review.”
Def.’s Resp. at 35–36.
c. Analysis
Carbon Activated first argues that Commerce has “not adequately explained why
[liquefied natural gas] is an appropriate substitute over natural gas in the gaseous
state,” Pls.’ Rule 56.2 Mem. at 41, because the agency “failed to explain how the use of
[liquefied natural gas] explains the cost incurred by plaintiffs when they did not use a
liquid to produce steam, and instead used natural gas in a gaseous state,” id. at 42.
The court has previously rejected the argument that Commerce may not select liquefied
natural gas as a surrogate because it is not “specific” to steam, noting that “the energy
source input need not be in the same phase (solid, liquid, gaseous) as the steam the
energy creates.” Carbon Activated AR12, 586 F. Supp. 3d at 1377. Carbon Activated’s
argument is no more developed in this case than it was in AR12, and the court remains
unconvinced.
Carbon Activated’s reliance on Yantai Oriental to support the use of domestic
gaseous natural gas prices also fails. See Pls.’ Rule 56.2 Mem. at 41–42 (citing Yantai
Oriental Juice Co. v. United States, 26 CIT 605, 617 (2002)). In Yantai Oriental,
“Commerce nowhere explain[ed] how the use of seemingly more expensive imported
coal data [was] the best available information,” 26 CIT at 617, whereas here, Commerce
explained that the domestic natural gas prices identified by Respondents were
Consol. Court No. 22-00017 Page 30
unreliable and did not represent the best available information, I&D Mem. at 49. As in
AR12, Commerce was unable to establish the underlying methodology Respondents
used to derive and collect domestic natural gas prices. See id.
Furthermore, as Commerce explained, of the six identified sources of data for
domestic natural gas prices, only two were partially within the POR, one showing only
the price for residential use, and the other only for commercial use. Id. Additionally, the
data that were partially within the POR were from one company with an unclear
geographic scope. Id. Commerce thus supported its rejection of the domestic data
based on lack of contemporaneity and because it did not “represent a broad market
average.” Id.
Commerce has the discretion to choose which criteria to prioritize in selecting
what constitutes the “best information available.” See QVD Food Co., 658 F.3d at 1323.
The court declines to interfere with Commerce’s discretion in selecting among potential
surrogate values because the agency has adequately explained its selection of HTS
subheading 2711.11 and supported its selection with substantial evidence.
VI. Valuation of Ocean Freight
a. Additional Background
The administrative record contained two sets of data, one from Maersk and the
other from Descartes, for valuing ocean freight expenses. See I&D Mem. at 42.
Commerce determined that the Maersk data represented the best available information
to value Respondents’ ocean freight expenses because the data covered the entire
POR, whereas the Descartes data covered less than one-half of the POR. Id. at 42–43.
Consol. Court No. 22-00017 Page 31
Furthermore, Commerce found that the rates contained in the Maersk data represented
actual freight charges, whereas the Descartes data contained only “approximations” of
freight charges. Id. at 43.
b. Parties’ Contentions
Carbon Activated contends that Commerce erred in selecting the Maersk data
over the Descartes data because the freight charge quotes contained in the Maersk
data “are unreliable and do not represent consummated transactions.” Pls.’ Rule 56.2
Mem. at 44; Pls.’ Reply at 20–21. The Government responds that substantial evidence
supports Commerce’s selection of the Maersk data to value ocean freight expenses.
Def.’s Resp. at 38.
c. Analysis
This issue boils down to a disagreement over the factual information contained
on the record. The Government contends that the Maersk rates represent actual
shipping rates, and that the Descartes data covers only part of the POR and are not
product specific. See Def.’s Resp. at 38–39. Carbon Activated, on the other hand,
contends that the rates contained in the Maersk data do not represent consummated
transactions, and that the Descartes data contain freight charges representing actual
transactions covering comparable merchandise for all twelve months of the POR. Pls.’
Rule 56.2 Mem. at 44–46.
The court’s review of these data sets indicates that Commerce’s selection of the
Maersk data is supported by substantial evidence. First, Carbon Activated has not
provided any evidence undermining Commerce’s determination that the Maersk data
Consol. Court No. 22-00017 Page 32
represented actual tariff rates and not approximations. Carbon Activated argues that
the language in the Maersk data stating, “[t]his look up is not covered by a service
contract, therefore tariff rates have been applied,” indicates that the Maersk data “does
not represent actual shipments, but instead is based upon quotes.” Pls.’ Rule 56.2
Mem. at 45; see also Pet’rs.’ Submission of Surrogate Values (Mar. 4, 2021), Att. 6C,
PR 177–78, CJA Tab 12. The meaning of this disclaimer in the Maersk data is unclear,
but the court finds that the inclusion of the language “tariff rates have been applied” is
not inconsistent with Commerce’s acceptance of them as based on actual
transactions.14 Likewise, Carbon Activated’s contention that the Maersk data are
unreliable because the prices remained static throughout the POR is without merit. See
Pls.’ Rule 56.2 Mem. at 45. Carbon Activated assumes that ocean freight prices
fluctuate frequently throughout the year but fails to support that assertion with evidence.
Even if the alleged flaws in the Maersk data exist, Carbon Activated has failed to
show that the Descartes data was the best available information to value ocean freight.
Carbon Activated has not provided any evidence to support its contention that the
Descartes data represents actual transactions. Each of the shipping rates contained in
the Descartes data contain a disclaimer stating that the rates are merely “[e]stimates of
freight charges . . . furnished as a convenience . . . and represent nothing more than an
14 Although Commerce did not address the meaning of this language specifically in the
Final Results, Commerce was clear that it found the Maersk data to be based on “actual
consummated transactions.” See I&D Mem. at 43. The court finds that the language
“tariff rates have been applied” is consistent with such a finding by the agency.
Consol. Court No. 22-00017 Page 33
approximation of freight charges.”15 Respondent SV Cmts., Ex. 13B. See I&D Mem. at
42; Respondent SV Cmts., Ex. 13B. Furthermore, the Descartes data cover only a part
of the POR. See I&D Mem. at 42–43; see also Respondent SV Cmts., Exs. 13A, 13B.
For these reasons, Carbon Activated has failed to show that Commerce erred in not
selecting the Descartes data. Commerce’s selection of the Maersk data to value ocean
freight is supported by substantial evidence.
VII. Valuation of Bituminous Coal
a. Additional Background
For the Preliminary Results, Commerce used Malaysian imports under HTS
subheading 2701.12 (Bituminous Coal, Whether or Not Pulverized, But Not
Agglomerated) to value bituminous coal used in the production of activated carbon. I&D
Mem. at 21.
In their administrative briefing, Respondents contended that Commerce should
value the bituminous coal used by DJAC and its supplier using Malaysian import data
under HTS 2701.19 (Other Coal). Respondents’ Case Br. at 34. Respondents argued
that because the bituminous coal used by DJAC had a Useful Heat Value (“UHV”) of
less than 5,833 kcal/kg, it did not reach the heat value threshold to be classifiable under
15 Commerce also found that the Descartes data was not the best available information
because it was not “product-specific.” For example, while the Descartes data for April
15, 2019, covers activated carbon, it also covers merchandise such as “automobiles &
parts,” candles, chairs, Christmas decorations, “tires & tubes,” and over one-hundred
other products that are not subject merchandise. See Respondent SV Cmts., Ex. 13B.
It is unclear whether the record indicates that ocean freight rates are dependent upon
the good being transported within a standard container, nevertheless, Commerce’s
conclusion that the Descartes data did not represent actual transactions and did not
cover the entire POR is adequate to support its decision to select the Maersk data.
Consol. Court No. 22-00017 Page 34
HTS subheading 2701.12, which is defined, in part, by a calorific value limit equal to or
greater than 5,833 kcal/kg. See id. at 32–33. Petitioners argued that Respondents
conflated the UHV scale with the Gross Calorific Value (“GCV”) scale, which uses
higher numbers than the UHV scale, and that using the GCV scale, the bituminous coal
used by DJAC and its supplier resulted in a heat value above the 5,833 kcal/kg required
for valuation under HTS subheading 2701.12. See Pet’rs’ Rebuttal Br. (Oct. 6, 2021) at
25–28, CR 218, PR 303, CJA Tab 31. Petitioners further argued that the UHV scale
was developed for the Indian coal industry only and, thus, is not reflected in the HTS
Notes. See id. at 26–27.
For the Final Results, Commerce used Malaysian import data under HTS
subheading 2701.19 as the surrogate value for bituminous coal. See I&D Mem. at 20.
In doing so, Commerce relied on its finding in AR11, in which it determined, on court-
ordered remand, that bituminous coal with a calorific value of less than 5,833 kcal/kg
should be classified under HTS 2701.19. See id. at 21–22. Specifically, in AR11,
Commerce found that Note 2 to Chapter 27 of the HTS (“Note 2”) limits the applicability
of HTS subheading 2701.12 to bituminous coal with “a calorific value limit . . . equal to
or greater than 5,833 kcal/kg.” Carbon Activated Tianjin Co. v. United States (“Carbon
Activated AR11 Remand”), 45 CIT __, __, 547 F. Supp. 3d 1310, 1314 & n.6 (2021).
Here, Commerce found that there was “insufficient record evidence to demonstrate that
the heat values discussed in [Note 2] are derived using either the UHV or GCV scale
because the notes do not explicitly state one way or the other” and, therefore,
Consol. Court No. 22-00017 Page 35
Commerce declined to adopt Petitioners’ interpretation of the import statistics. I&D
Mem. at 21.
b. Parties’ Contentions
Calgon contends that Commerce erred in using Malaysian import data under
HTS subheading 2701.19 to value bituminous coal used by DJAC and its supplier.
Calgon’s Rule 56.2 Mem. at 12–18; Calgon’s Reply at 2–6. Calgon challenges the
agency’s finding that the record failed to establish which scale was referenced in Note
2. Calgon’s Rule 56.2 Mem. at 13. Calgon also challenges Commerce’s reliance on its
remand determination in AR11 without applying it to the unique facts of AR13. Id. at
17–18; Calgon’s Reply at 5–6. Calgon further argues that Commerce failed to address
evidence detracting from its conclusion that Malaysian import data under HTS 2701.19
was the best information on the record. Calgon’s Reply at 2–5.
The Government responds that Commerce’s selection of HTS subheading
2701.19 to value bituminous coal is supported by substantial evidence. Def.’s Resp. at
40. The Government contends that record evidence does not indicate whether the UHV
or GCV scale applies in Note 2 or that the UHV scale is specific to the Indian industry.
Id. at 41–42. The Government also maintains that Commerce correctly applied its
AR11 practice of valuing bituminous coal with a known heat value of less than 5,833
kcal/kg under HTS subheading 2701.19 in AR13. See id. at 42–43. DJAC agrees that
Commerce’s selection of HTS 2701.19 to value bituminous coal is supported by
substantial evidence. See DJAC’s Resp. at 2–12.
Consol. Court No. 22-00017 Page 36
c. Analysis
Calgon first contends that Commerce failed to address record evidence that the
heat values discussed in Note 2 are derived using either the UHV or GCV scale. See
Calgon’s Rule 56.2 Mem. at 13. Calgon argues that, because the formulas for the UHV
and GCV tests can result in differing classification of coal, and because the record
evidence relating to the UHV scale only applied to the state of coal mining in India, the
record indicated that the UHV scale was specific to the Indian coal industry. See
Calgon’s Rule 56.2 Mem. at 13–15.
Contrary to Calgon’s contentions, Commerce did address Calgon’s arguments
and record evidence detracting from its decision. Commerce explained that it was
following its practice in AR11, in which it determined that, due to the applicability of Note
2, bituminous coal with a heat value below 5,833 kcal/kg should be valued using HTS
2701.19. I&D Mem. at 21. Commerce then explained that no record evidence
addressed whether the heat values discussed in Note 2 are derived using either the
UHV or GCV scales, but acknowledged that, in the past, Commerce used values
derived from the UHV scale in its determinations in this proceeding. See id. at 21–22 &
n.140 (citing Issues & Decision Mem. for Activated Carbon from China, A-570-904 (Nov.
2, 2012) (“AR4 IDM”), https://access.trade.gov/Resources/frn/summary/prc/2012-27423-
1.pdf (last visited July 21, 2023).16
16Calgon argues that Commerce’s citation to AR4 IDM is inapposite because, in AR4,
Commerce found that the data it selected had a UHV that matched the UHV reported by
the respondent, whereas here, record evidence indicates that UHV is not reflected in
the Malaysian import statistics to value bituminous coal but is instead a measurement
Consol. Court No. 22-00017 Page 37
Calgon next contends that Commerce failed to support its interpretation of HTS
subheadings 2701.12 and 2701.19 with substantial evidence. See Calgon’s Rule 56.2
Mem. at 16. Calgon argues that Commerce’s specific focus on heat value is flawed
because the agency failed to analyze the meaning of the HTS subheadings beyond
heat value, as the agency had done in AR11. Id. at 17. In AR11, however, Commerce
analyzed the plain language of HTS subheadings 2701.12 and 2701.19 only to the
extent that the record lacked evidence regarding the heat value of certain bituminous
coal used by an uncooperative supplier. See Carbon Activated AR11 Remand, 547 F.
Supp. 3d at 1316–1318 (noting that without evidence of the heat values of bituminous
coal used by the respondent’s suppliers, Commerce relied on the plain language of the
HTS descriptions to determine the best available surrogate value). When Commerce
had the heat value information, Commerce relied on that information in connection with
the HTS descriptions to select the surrogate value for bituminous coal with a known
heat value of less than 5,833 kcal/kg. See id. at 1317–18.
Calgon also argues that Commerce’s reliance on AR11 does not constitute
substantial evidence. See Calgon’s Rule 56.2 Mem. at 17. Calgon argues that the
AR13 record contains evidence specifying “that HTS subheading 2701.12 covers
‘bituminous coal’ including coking and non-coking bituminous coal that are classifiable
limited in use to the Indian coal industry. See Calgon’s Rule 56.2 Mem. at 15–16.
Calgon, however, fails to point to any record evidence indicating that the UHV scale is
so limited, and Commerce need not address such undeveloped, unsupported
contentions. Cf. Timken U.S. Corp. v. United States, 421 F.3d 1350, 1354–57 (Fed. Cir.
2005) (finding that an agency need not address every argument made by parties, but
only those involving material issues of law or fact).
Consol. Court No. 22-00017 Page 38
under HTS subheading 2701.12.1000 and HTS subheading 2701.12.9000.” Id. at 17–
18. The fact that HTS subheading 2701.12 covers both coking and non-coking
bituminous coal does not contradict Commerce’s determination. Commerce agreed
with Calgon’s assertion, see I&D Mem. at 22; however, Commerce found HTS
subheading 2701.12 to be overbroad because DJAC and its supplier used only non-
coking bituminous coal, and, when interpreted in conjunction with Note 2, HTS
subheading 2701.19 was more specific, id.Based on the foregoing, the court finds that Commerce’s determination to value
bituminous coal using Malaysian import data under HTS subheading 2701.19 is
supported by substantial evidence.
VIII. Commerce’s Acceptance of DJAC’s Reporting of Bituminous Coal
Consumption
a. Additional Background
Commerce must determine the normal value of subject merchandise by valuing
the factors of production, which include the “quantities of raw materials employed.” 19
U.S.C. § 1677b(c)(3)(B). Accordingly, Commerce requested, and DJAC reported, the
specific quantities of inputs used to produce activated carbon, including bituminous
coal. See DJAC Section D Resp. (Sept. 17, 2020) (“DJAC SDQR”), Ex. D-6, CR 36–41,
PR 84, CJA Tab 5. DJAC reported both the total quantity of bituminous coal it
consumed during the period of review as well as the total quantity of bituminous coal
consumed to produce merchandise under consideration. See DJAC Suppl. Section D
Resp. (May 21, 2021) (“DJAC Suppl. SDQR”) at 11–12, CR 146–73, PR 243–56, CJA
Consol. Court No. 22-00017 Page 39
Tab 17 (explaining the reporting method it used in its initial section D questionnaire
response); see also DJAC SDQR, Ex. D-6.
Petitioners asserted that there was a discrepancy between the two consumption
figures as reported by DJAC. See Pet’rs’ Cmts. Concerning Section D Questionnaire
Resp. of DJAC (Dec. 4, 2020) at 9–10, CR 55, PR 90, CJA Tab 7. Commerce
instructed DJAC to reconcile that difference. See Letter from [Commerce] to DJAC,
Suppl. [Section D] Questionnaire (Apr. 20, 2021) at 7–8, CR 66, PR 193, CJA Tab 14.
DJAC responded that the difference amounted to the difference between the
quantity of bituminous coal consumed in the production of merchandise under
consideration and “total consumption quantity of bituminous coal during the POR,
irrespective of the end-product.” DJAC Suppl. SDQR at 11. In other words, some of
the bituminous coal DJAC consumed during the POR was consumed in the production
of non-subject merchandise. See id. Specifically, DJAC explained that the difference
could be accounted for by (1) self-produced normal-ash carbonized material DJAC sold
during the POR; (2) the closing inventory of self-produced normal-ash carbonized
material during the POR; (3) the opening balance amount of self-produced low-ash
carbonized material; and (4) the quantity of Screenings 2 produced. Id. at 11–12.
DJAC provided an equation (essentially, the sum of items 1, 2, and 4, less item 3)
showing that the quantity of bituminous coal attributed to the four categories of materials
listed above was equal to the difference between the total consumption of bituminous
coal, irrespective of end-product, and the total quantity of bituminous coal used in the
production of merchandise under consideration. See id. Calgon, however, argued that
Consol. Court No. 22-00017 Page 40
DJAC incorrectly subtracted the closing POR inventory of normal-ash carbonized
material from the calculation of standard consumption of bituminous coal, and
incorrectly added the opening balance of low-ash carbonized material. See Pet’rs’
Cmts. on Continuing Deficiencies in DJAC’s Resp. to the Dep’t’s Suppl. Section D
Questionnaire (June 4, 2021) at 9–12, CR 181, PR 266, CJA Tab 19.
For the Preliminary Results, Commerce accepted DJAC’s explanation, made no
adjustments to DJAC’s reporting of bituminous coal, and did not address Calgon’s
arguments that DJAC’s reporting was incorrect. See generally Prelim. Mem.; Prelim.
Results Margin Calculation for [DJAC] (June 18, 2021), CR 194, PR 276, CJA Tab 22.
Commerce did, however, issue a second supplemental cost questionnaire to DJAC prior
to issuance of the Final Results in which the agency requested that DJAC “revise [its]
calculation of the standard bituminous coal consumption during the POR such that it
excludes the opening POR inventory balance of . . . low-ash carbonized material and
includes the closing POR inventory balance of . . . normal-ash carbonized material.”
See Section C Third Suppl. Questionnaire, and Section D Second Suppl. Questionnaire
(July 19, 2021) (“2nd Suppl. SDQR”) at 6–7, CR 200, PR 283, CJA Tab 25. In
response, DJAC explained its position that no adjustment to its calculation methodology
was necessary. See DJAC 3rd Suppl. Sec. C and 2nd Suppl. Sec. D. Resp. (Aug. 11,
2021) (“DJAC 2nd Suppl. SDQR”) at 11, PR 291, CR 206–212, CJA Tab 27.
For the Final Results, Commerce accepted DJAC’s reporting of bituminous coal
consumption, despite DJAC not making any change to its treatment of opening and
closing inventories as a result of the agency’s July 19 supplemental questionnaire. See
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I&D Mem. at 9–11. Commerce concluded that DJAC’s calculation methodology
properly accounted for opening and closing inventories of low-ash and normal-ash
carbonized materials. See id. at 10–11.
b. Parties’ Contentions
Calgon contends that Commerce misunderstood DJAC’s calculation of its
bituminous coal consumption. Calgon’s Rule 56.2 Mem. at 24–28; Calgon’s Reply at 7–
11. Specifically, Calgon alleges that, contrary to Commerce’s instructions, DJAC’s
calculation did not exclude its opening inventory of bituminous coal from its
consumption calculation of bituminous coal. See Calgon’s Rule 56.2 Mem. at 26–27;
Calgon’s Reply at 8–11. Calgon further contends that this misunderstanding “renders
the agency’s findings inconsistent with the approach relied on by [the agency] in
[AR12],” in which Commerce excluded the opening inventory balance of carbonized
material from DJAC’s bituminous coal consumption calculation. Calgon’s Rule 56.2
Mem. at 28–30.
The Government and DJAC contend that DJAC’s reporting of its bituminous coal
consumption was consistent with the prior review and that Commerce’s reliance on
DJAC’s reporting is supported by substantial evidence. Def.’s Resp. at 45–46; DJAC’s
Resp. at 12–23.
c. Analysis
DJAC reported both the total consumption of bituminous coal used in the
production of merchandise under consideration and the total consumption of bituminous
coal irrespective of end-product. See DJAC SDQR, Ex. D-6; DJAC Suppl. SDQR at 11;
Consol. Court No. 22-00017 Page 42
DJAC 2nd Suppl. SDQR, Ex. 2SD-Q13 at Ex. D-6.2.1–6.2.2. Because these quantities
did not match, Commerce asked DJAC to reconcile the difference. See DJAC Suppl.
SDQR at 11. DJAC provided a narrative explanation for the difference between these
totals as well as detailed calculations supporting its explanation. See id. at 11–12. The
Government and DJAC contend that Commerce’s acceptance of DJAC’s reported
consumption of bituminous coal is supported by substantial evidence, while Calgon
contends that, because Commerce misunderstood DJAC’s calculations, the Final
Results must be remanded.
The court has reviewed the record information and Calgon’s claim and finds that
Commerce’s acceptance of DJAC’s consumption of bituminous coal is supported by
substantial evidence. The crux of Calgon’s contention is that, in reporting its total
bituminous coal consumption, DJAC should have excluded the opening inventory of
self-produced carbonized material and included the closing inventory of self-produced
carbonized materials.17 See Calgon’s Rule 56.2 Mem. at 26–27. Calgon’s argument is
without merit. Calgon asserts that the difference between the two consumption figures
“is a negative number,” such that DJAC in fact “subtracted closing inventory” and
“added opening inventory.” Id. at 27 (emphasis omitted). DJAC’s treatment of each
adjustment demonstrates that DJAC properly excluded its opening inventory and
17Calgon argues that DJAC’s calculations in this review are inconsistent with its
calculations in AR 12. See Calgon’s Rule 56.2 Mem. at 28–30; Calgon’s Reply at 7–11.
However, Calgon did not provide any record evidence demonstrating that DJAC’s
calculations in AR13 are different than the calculations made in AR12, and the
calculations made in AR12 are not part of the record of the Final Results before the
court.
Consol. Court No. 22-00017 Page 43
included its closing inventory in order to reconcile the difference between the two
bituminous coal consumption figures. See DJAC Suppl. SDQR at 12.18
The court’s review of the record indicates that DJAC’s treatment of opening and
closing inventories of carbonized materials aligns with DJAC’s explanation of its
calculations, Commerce’s understanding of the calculations, and the calculation method
that Calgon contends should have been followed. In particular, the difference between
DJAC’s total consumption of bituminous coal during the period of review and its
consumption of bituminous coal used to produce merchandise under consideration is
fully accounted for by DJAC’s production of non-subject merchandise and the difference
between the starting and ending inventories of what might be considered work-in-
process. Calgon fails to point to any record evidence to the contrary, nor do they
provide any explanation as to how DJAC’s calculations were incorrect or failed to
reconcile fully its consumption of bituminous coal during the POR. Accordingly,
Commerce’s determination with respect to this issue will be sustained.
18As DJAC explained, the difference between the two consumption figures was equal to
the sum of its self-produced normal-ash carbonized materials, the closing inventory of
self-produced normal ash carbonized material, and Screenings 2, minus the opening
balance of self-produced low-ash carbonized materials. See DJAC Suppl. SDQR at 12.
Furthermore, the exhibit to DJAC’s initial section D questionnaire response illustrates
that DJAC appropriately accounted for its opening and closing inventories of self-
produced carbonized materials in its calculations. See DJAC SDQR, Ex. D-12.6.
Consol. Court No. 22-00017 Page 44
CONCLUSION
For the foregoing reasons, the court will sustain Commerce’s Final Results.
Judgment will enter accordingly.
/s/ Mark A. Barnett
Mark A. Barnett, Chief Judge
Dated: July 21, 2023
New York, New York