US punishes ethanol but allows crude to flow free – Brazil’s Unica

21 April 2010 22:18  [Source: ICIS news]

HOUSTON (ICIS news)--Brazilian ethanol group Unica on Wednesday blasted a proposed US Senate bill that would extend the US tariff on ethanol, saying the US punishes clean energy but lets crude oil flow in tax-free.

The legislation, which was similar to a bill introduced in House of Representatives earlier in April, would extend the 54-cent/gal US tariff on imported ethanol through 2015.

The restriction was due to expire at the end of 2010.

“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,” said Joel Velasco, Unica’s chief representative in North America.

Unica claimed the trade barrier hurt US consumers because it prevented competition in the market place.

But US ethanol makers said the tariff was needed to keep US taxpayers from subsidising foreign production of the biofuel.

The US gives fuel blenders a tax break of 45 cents/gal for each gallon of ethanol blended in gasoline.

The credit is given regardless of where the biofuel is produced.

Unica has repeatedly challenged that claim, arguing that if the US tariff were solely intended to offset the blender credit, it should then match the incentive.

A key US ethanol trade group lobbying for the tariff extension has in the past stated that it would not oppose a reduction that left the tariff on par with the blender credit.

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By: William Lemos
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