Brazilians Betting Obama Will Be Green Enough to Help Brazil

Brazilian president Lula hold ethanol jar Brazil is hoping that its ethanol may gain momentum and space in the United States market during the administration of Barack Obama, who has already shown himself drawn towards environmental causes. Thus, the US may become sponsors of renewable energies.

Obama's campaign commitments included reducing carbon emissions by 80% until 2050, reducing dependence on oil imports, developing and implementing clean energy technologies and making the United States a leading country in issues pertaining to climate change.

The world's leading economy aims to consume 136 billion liters of ethanol in 2022. The current consumption is 30 billion (against 25 billion in Brazil).

"Should Obama maintain those ethanol consumption goals, then he may deem it necessary to complement the United States output with imports, and in this case, the expectation is that he would accept a reduction, for a certain export volume, of the tariff currently charged on Brazilian ethanol," says the director general at ícone  (Institute of Studies on Trade and International Negotiation), André Nassar.

Presently, the United States charges a tariff of US$ 0.54 per gallon of Brazilian alcohol, which inhibits the entry of the product in that country.

Nassar believes that Obama's concern with increasing energy efficiency may also translate into the United States' participation in the post-Kyoto Protocol and in a new clean development mechanism for carbon trade, with the adoption of goals for reducing emission of greenhouse gases.

"The Americans have a very heavy energy matrix in terms of CO² emission. If they are to clean up that matrix, that tends to open up opportunities to Brazil, most of all in ethanol, which is our main exportable source of renewable energy," he underscores.

Besides selling more ethanol to the United States, Brazil could attract United States investment in clean energy and also develop partnership for technology transfer, research and development.

As for the myth of Democrat protectionism and what it might represent for Brazilian agribusiness, Nassar explains that the subsidies granted to grain and questioned by Brazil are provided for in the United States Agricultural Law, the so-called Farm Bill, and vary according to international market prices.

The current law was passed halfway through last year and is valid until 2013. "In terms of agricultural policy and subsidies for grains, Obama's swearing in does not change anything. The law is the law and that is it," sums up Nassar.

He warns that during Bill Clinton's Democrat administration, especially in 1998 and 1999, prices decreased sharply, and the president was met with pressure from the Congress so as to grant complementary subsidies to the agricultural sector. That, according to him, might happen once again, but is unlikely.

"The United States deficit has never been so high, and the moments at which they over subsidized the agricultural sector were those with the lowest deficits. I believe that even if farmers push Obama, calling for more than stipulated by the Farm Bill, they will not get what they want."

The third topic of interest to the Brazilian agricultural industry is the Doha Round of the World Trade Organization (WTO). It is not yet known whether the negotiations, which have been dragging on for seven years, are going to be a priority for the new government. According to Nassar, the resumption of talks depends on the interest of the United States.

"The negotiations are not going to promote a large opening of trade, they are going to be more of a political signal. It is not the most important thing in the world, but it is important in order for us to close this subject and move on to more ambitious things," he claims.

The expectation, as a whole, is a favorable one. "In the face of the last eight years of United States unilateralism, which is what we experienced with the Bush administration, the Democrats are coming in with a stance of greater opening for international talks, which is a good thing.

"Exactly how that is going to come through in practice is not yet clear, but I tend to think that the form that Obama is proposing is a positive one for Brazil," he evaluates.



  • Show Comments (10)

  • falupa

    Obama is focusing on green technology. His efforts, however are geared toward building US jobs. I’m hoping that his efforts on green technology will bring about more power.

  • Brian J. Donovan

    Renergie Looks Forward to Working Closely with the Obama-Biden Administration
    Louisiana Enacts the Most Comprehensive Advanced Biofuel Legislation in the Nation

    Governor Bobby Jindal has signed into law the Advanced Biofuel Industry Development Initiative, the most comprehensive and far-reaching state legislation in the nation enacted to develop a statewide advanced biofuel industry. Louisiana is the first state to enact alternative transportation fuel legislation that includes a variable blending pump pilot program and a hydrous ethanol pilot program.

    The legislature found that the proper development of an advanced biofuel industry in Louisiana requires implementation of the following comprehensive À¢€œfield-to-pumpÀ¢€Â strategy developed by Renergie, Inc.:

    (1) Feedstock other than corn;
    (2) Decentralized network of small advanced biofuel manufacturing facilities;
    (3) Variable blending pumps in lieu of splash blending; and
    (4) Hydrous ethanol.

    Renergie looks forward to working closely with the Obama-Biden administration to:
    (a) reduce U.S. dependency on imported oil;
    (b) repeal the ethanol import tariff;
    (c) maximize the environmental benefits of ethanol-blended transportation fuels; and
    (d) create jobs in rural areas of the United States by growing ethanol demand, specifically hydrous ethanol demand, beyond the 10% blend market.

    Please feel free to visit Renergieˢ۪s weblog ( for more information.

  • João da Silva

    [quote]in that time my sonlaw has caught 134 brasilians trying to come through the texas bordor with mexico [/quote]

    Yeah, I know that part of U.S. Your Son-in-Law and his colleagues didn’t bother me while I was driving by. 😀

    It is sad that that so many Brasilians are trying to cross into the border illegally. Our land is so big and offers so many opportunities. But unfortunately the “Politicos” are not interested in bridging the gap between “Haves” and “Have nots”. So people try to emigrate into other countries legally or illegally. Even our first family got Italian citizenship for the “better future” of their children! Should I say more?

  • Forrest Allen Brown

    yes joao
    But she is already under deportation orders , there fore if her step in he would be viloating the law that says public officals
    may not use political infulence to gain residence fir some one in country ileagle .
    he would not want to be caught on that one so early in his office .

    bad enough that he moved his mother inlaw into the big house who pays her , or pays for her up keep ???

    yea still wating on fatimas permint papers to come through 28 months for you to try to do it the right way
    in that time my sonlaw has caught 134 brasilians trying to come through the texas bordor with mexico
    so how many have made it

  • João da Silva

    [quote]OBAMA should enforce imigration laws first by sending back his aunt living in the US on socila welfare programs [/quote]

    That is not going to be so easy, Forrest. The “First Aunt” has every right to defend her “Rights”. Besides, BHO can easily sponsor her for a green card and subsequent naturalization as a citizen of good ole U.S. of A. 😉

    You ready to pay homage to Fidel?

  • Forrest Allen Brown

    bo go see the new ford plant in brasil
    the unions in the states would not let them build it there as it would put
    well over a 1000 people out of a job .

    so instead they sent the plant to brasil and do you know there is not one US citisen working there .
    same with wall-mart a US citisen will not be hired in brasil to work there

    big business sends out the jobs to save money but the price in the states never goes down and in most cases
    goes up to cover the import of US owned compaines made goods in forgin lands .

    bend over here it comes again !!!!!!!!!!!!!!!!!!!!

    OBAMA should enforce imigration laws first by sending back his aunt living in the US on socila welfare programs
    while being under ordered deportation ?????????

    by sending bask some 6 million iileagls he would produce the 2 million jobs he wants to create !!!!!!!!!!!!!!!!!!!!

  • bo

    [quote]His efforts, however are geared toward building US jobs.[/quote]

    As they damn well should be!!! Gets a little old after a while of foreigners talking about the U.S. like we’re the fucking Red Cross. Does Brazil and other countries try and create jobs and wealth anywhere else but home?

  • João da Silva

    [quote]the tax payer is covering and big business is unhurt , [/quote]

    Here too Forrest, except that it has been so since 1998 and it accentuated for the past one year. One of many [i]recent [/i] examples is around 200 companies getting into trouble because of the currency speculation and looking towards BNDES, Banco do Brasil and CEF to bail them out. In fact, Augustus, Ch.C and I have made some interesting comments on this issue. Between 2005 and 2008, small export oriented manufacturing companies were forced to close because of the currency “Appreciation”. During that period, the big ones were exporting and in reality the domestic consumers were indirectly subsidizing the export prices, thus generating around $200 Billions of exchange reserve. The big ones also indulged in currency speculation last year that caused a few Billion Reais loss. Now they passed the buck to BNDES,BB and CEF!!

    Now “Brazilians Betting Obama Will Be Green Enough to Help Brazil”. Many may bet but I am certainly not one of them. 😀

  • Forrest Allen Brown

    More than 2/3 of the plants or at idle due to lower gas prices , oil at 47 a bbl it is not a good idea to make ethanol to big business

    But to me i say stick it to them .there are several other plants other than corn and sugar cane that produce ethanol cleaner and cheeper & not a food stock .

    I know OBAMA will work to get fair trade as the people of US have moved away from big business comanding the goverment after this 800 billion bail out .
    the tax payer is covering and big business is unhurt ,

  • bo

    [quote]”Exactly how that is going to come through in practice is not yet clear, but I tend to think that the form that Obama is proposing is a positive one for Brazil,” he evaluates.[/quote]

    Well, if one has listened to everything Obama has said and campaigned about, his administration will not be good for Brazil. The unfair trade practices that the U.S. allows Brazil to benefit from will come to an end or will be changed to be more “fair”. Also, it makes no sense to think that the U.S. will start importing ethanol from Brazil while allowing Brazil to destroy their environment, not to mention using slave-labor to produce it!!

    We’ll see just how “smart” brazilians are. I’ll lay odds that the Obama administration will be much better for the U.S. in economic relations with Brazil, but Brazilians will love Obama anyway.

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