Brazil electricity tax decrease to help chlor-alkali

14 September 2012 21:33  [Source: ICIS news]

CAMPINAS, Brazil (ICIS)--Brazil’s recent plans to reduce electricity taxes for industries and residential consumers may diminish the gap between Brazilian and international prices for energy which in turn would help the heavily energy-dependent chlor-alkali industry, an executive for the country's chlor-alkali industry association Abiclor said on Friday.

On 14 August, Brazil’s president Dilma Roussef announced a major cut in electricity taxes that will reduce energy costs for industrial customers by up to 28% and for households by up to 16%.

According to Anibal do Vale, president at Abiclor, around 40% of the chlor-alkali industry's costs come from energy.

However, the measure will apply more for the captive market (companies that buy energy from major energy distributors) than for the free market (energy distributors, such as Eletrobras).

“A reduction like this will always be positive. It will help us to reduce the gap between Brazilian and international prices for energy,” said Vale, who is also president of Brazilian chlor-alkali producer Carbocloro.

The executive said Brazil has the third-most expensive energy in the world, adding the measure is “an important step in the right direction”.

“The chlor-alkali segment is very important for the advancement of the Brazilian economy and having high costs for energy could block its advancement. So, a 28% reduction would diminish that gap, but would not be able to make the sector more competitive,” said Vale.

By: Leo Siqueira
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