US must cut ethanol tariff to 45 cents/gal – Unica

03 July 2009 04:32  [Source: ICIS news]

PIRACICABA, Brazil (ICIS news)--Brazilian sugarcane industry association Unica said on Thursday the US should cut its tariff on ethanol to 45 cents/gal to match the tax incentive US blenders receive.

US blenders are given a tax credit of 45 cents/gal to blend ethanol in gasoline, but the US tariff on ethanol is 54 cents/gal.

“Unless one is dyslexic, it makes no sense,” said Unica president Marcos Jank on the sidelines of the 7th SIMTEC ethanol conference in Piracicaba, Sao Paulo.

The US ethanol industry claims it would not oppose reducing the tariff, but Jank dismissed that as empty rhetoric.

“They are not doing anything about it,” he said.

The US tariff on ethanol is a highly contentious issue between the US and Brazil.

Unica claims the tariff hurts free trade.

However, its US counterpart, the Renewable Fuels Association (RFA), says the US has the right to protect its industry.

The RFA claims the tariff is needed to keep the US from subsidising foreign ethanol production. This is because the incentive is given regardless of where the biofuel is made, the group says.

The RFA has also argued that Brazil taxed ethanol when it had to import the product from the US several years ago.

“That was also a mistake,” Jank said, adding that Unica opposes any kind of trade barrier.

For more on ethanol, visit ICIS chemical intelligence
Bookmark Simon Robinson’s Big Biofuels Blog for some independent thinking on biofuels
To discuss issues facing the chemical industry go to ICIS connect

By: William Lemos
+1 713 525 2653

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly