US, Brazil ethanol groups spar over ethanol tariff

22 February 2011 19:13  [Source: ICIS news]

PHOENIX (ICIS)--Ethanol groups from Brazil and the US sparred over the US ethanol tariff on Tuesday, a recurring theme that divides the world's two largest producers of the biofuel.

Brazilian sugarcane industry association Unica called on the US to drop its 54 cent/gal trade barrier on the biofuel, arguing that the US has become a net exporter of ethanol and is benefiting from trade.

The Renewable Fuels Association (RFA), a key US ethanol group, defended the tariff. It pointed to US imports of Brazilian ethanol in recent years, saying that the tariff had not been a trade barrier in the past.

The RFA claimed the ethanol tariff is needed to offset a tax credit the US gives for ethanol blending.

Unica countered that crude oil flowed freely around the world, and that trade barriers would keep ethanol from becoming a global market.

A European industry official defended the use of trade restrictions. Europe has received ethanol imports from both Brazil and the US in recent years.

Representatives from Unica and the RFA spoke at the 16th National Ethanol Conference in Phoenix, Arizona, which began on Monday.

The event, which is organised by the RFA, closes on Tuesday.

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By: William Lemos
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