US group ridicules Brazil's move to drop ethanol tariff

06 April 2010 22:00  [Source: ICIS news]

HOUSTON (ICIS news)--A US ethanol trade group on Tuesday downplayed news that Brazil has temporarily eliminated its 20% tariff on ethanol, saying Brazil’s trade policy is shaky and the country is unlikely to ever import ethanol because of the size of its market.

“Vacillating regulations regarding Brazil’s trade policy as well its domestic consumption of ethanol make it impossible for foreign ethanol producers to even consider exporting product into Brazilian markets,” the Renewable Fuels Association (RFA) said.

The RFA is a staunch supporter of the 54 cent/gal (€0.11/litre) duty the US imposes on Brazilian ethanol.

Brazil’s ethanol group Unica, a fierce critic of the US tariff, applauded the decision, calling it a major step forward in building a global biofuels marketplace.

“The question now is whether the US … will follow suit,” the Brazilian group said.

Brazil’s decision to do away with ethanol duties was largely symbolic since the country does not import ethanol, being instead the world’s top exporter of the product.

But the elimination of the tariff, which would be in effect until the end of 2011, came at time when the US industry is campaigning to have the US tariff extended.

The US tariff on ethanol would expire at the end of 2010 unless Congress renewed it.

US House members from mostly corn-producing states last week introduced a bi-partisan bill seeking a five-year extension on the restriction.

For more on ethanol, visit ICIS chemical intelligence
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By: William Lemos
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