Ethanol Makers in Brazil Lambast US for Subsidies and Tariffs on the Fuel

EthanolReacting to newly introduced legislation from American senators Chuck Grassley (Republican from Iowa) and Kent Conrad (Democrat from North Dakota) extending subsidies to corn ethanol and the 54-cents per gallon tariff on imported ethanol – particularly sugarcane ethanol from Brazil – for five more years, the Brazilian Sugarcane Industry Association (UNICA) issued the following statement. 

The statement should be attributed to Joel Velasco, UNICA’s Chief Representative in North America.

Sugarcane ethanol from Brazil is an advanced, low-carbon fuel that could help the United States cut dependence on Middle East oil, save money at the pump and improve the environment as both the U.S. Environmental Protection Agency and the California Air Resources Board have recognized. 

However, Congress has erected an elaborate system of subsides and trade barriers that make sugarcane ethanol more expensive and nearly unavailable in the U.S. As a result, Americans cannot fully benefit from this clean, more affordable alternative. 

It is ironic that Congress allows oil from nations hostile to America into the country tariff-free, but is more than willing to punish clean energy from Brazil, a long-standing democratic ally.

Thanks to generous government incentives and consumption mandates over the last 30 years, the United States has built the world’s largest ethanol industry, producing more than 12 billion gallons of corn ethanol per year. 

Brazil is the world’s second-largest producer with about 6 billion gallons, without government subsidies.  Americans and Brazilians share the same goal to reduce dependency on fossil fuels, and Brazilians are proud to have replaced half of their gasoline needs with sugarcane ethanol.

Unfortunately, the world’s #1 ethanol producers – American producers who comprise what is according to President Obama’s Biofuels Working Group  a “well established” and “mature” industry – appear determined to avoid healthy market-based competition. At a time when U.S. ethanol exports are at a record high, the industry continues to ask for government bailouts, this time to the tune of US$ 30 billion.

Senator Grassley, in his statement introducing the bill, claimed the legislation would help replace oil from countries like Venezuela.  In fact, the loophole for importing duty-free ethanol through the Caribbean Basin Initiative actually encourages those countries to use more of Hugo Chavez’s petroleum to power ethanol dehydration facilities since they are net energy importers.  In this case, protectionism is not helping America’s energy security.

Consumers win when businesses have to compete in an open market, because competition produces higher quality products at lower costs.  The same principle holds true for the renewable fuels market.  Competition will create a race to the future and generate better options for American consumers.

Earlier this month, Brazil took an important first step to build an open and global biofuels marketplace by eliminating its tariff on imported ethanol through the end of 2011. UNICA is asking the Brazilian government to make the tariff elimination permanent if Congress will do the same and drop the U.S. tax on imported ethanol.

After 30 years of subsidies and import taxes, American consumers deserve clean fuels at a market-based price.  Brazilian sugarcane ethanol producers are ready to compete.  What about American corn ethanol producers?

The Brazilian Sugarcane Industry Association (UNICA) represents the top producers of sugar and ethanol in the country’s South-Central region, especially the state of Sao Paulo, which accounts for about 50% of the country’s sugarcane harvest and 60% of total ethanol production.

UNICA develops position papers, statistics and specific research in support of Brazil’s sugar, ethanol and bioelectricity sectors. In 2009, Brazil produced an estimated 605 million metric tons of sugarcane, which yielded 33 million tons of sugar and 26 billion liters (6.9 billion gallons) of ethanol.

Tags:

You May Also Like

In 2010 Brazil Plans to Add US$ 10 Billion in Agricultural Exports

The Brazilian govenment is working to win an agricultural product import market this year ...

Music: Assorted Brazilian Biscuits

Given the brushoff by BMG, singer Maria Bethânia signed with Biscoito Fino and began ...

Best-seller Books, Plays and Movies

By Brazzil Magazine Plays, movies & best-seller books PLAYS Rio Como Encher um Biquíni ...

UN Scolds Brazil for Its Police and Prison System

The organization of the Brazilian police, the high death toll in police actions, and ...

Real, the Brazilian currency

Brazil’s 2.9% Growth Is the Worst in South America

Brazil's economy expanded 2.9% last year compared to 2.35% in 2005 according to the ...

Brazil Decides to Become a Shipbuilding Power

Tuesday, February 7, witnessed the first step towards the concretization of the Technological Improvement ...

Brazilian Businessmen Can’t Decide If They Want Chavez in the Mercosur

In Brazil, the National Congress controversy over the incorporation of Venezuela to the Mercosur ...

Sí£o Paulo, Brazil, Agricultural Exports Fall Close to 10%

Agribusiness products exports from the state of São Paulo, in Brazil's Southeast, totaled US$ ...

Free Trade Agreement Approaches Israel to Brazil and Mercosur

Israel and Mercosur, which comprises Brazil, Argentina, Uruguay and Paraguay plus Venezuela, will sign ...

Denying Education is the Other AIDS. And Brazil Is Guilty of Inflicting It

Some sectors of the fight against AIDS have suggested that Thabo Mbeki, the former ...