BRUSSELS  The European Union is preparing to impose trade duties on biofuels imported from the United States to prevent American producers from putting European producers of biodiesel out of business, diplomats said Monday.

Biofuels are developing into a big business, with sales of about 8 billion euros, or $10 billion a year, in Europe. Imports of biodiesel from the United States total about 1 billion euros.

The European Union and the United States subsidize their biodiesel industries. But European producers complain that their counterparts in the United States benefit twice: from subsidies by the federal government to produce the biodiesel and from subsidies granted by individual European governments when the fuel is sold on the Continent.

Peter Power, the spokesman for the European trade commissioner, Catherine Ashton, said the normal procedure in such trade disputes  after the European Commission proved that goods had been sold below cost and that European industry had been harmed  was to impose provisional duties. He said that any definitive measures, lasting five years, would need approval by European governments by summer.