Lower electricity taxes to benefit Brazil chems – trade group

17 September 2012 16:53  [Source: ICIS news]

CAMPINAS, Brazil (ICIS)--Brazil’s recent plan to reduce electricity taxes should benefit the biggest energy consumers in the nation's chemical industry, such as chlor-alkali and industrial-gas producers, a trade group said on Monday.

Earlier, Brazil’s president Dilma Rousseff announced tax cuts of up to 28% for industrial users and 16% for residential users.

Even if the cut amounts to 20%, it still shows that the government is concerned about the competitiveness of the Brazilian industrial sector, said Fernando Figueiredo, president at Abiquim.

The move should also diminish the gap between Brazilian energy costs and those in the rest of the world, said Anibal do Vale, president at Abiclor. Energy makes up about 40% of the total costs of the chlor-alkali industry.

Despite the cut, Brazilian customers will still pay more for energy than other parts of the world, Figueiredo said.

In 2011, Brazil’s electricity tax was 112% higher than a comparable rate in the US, Figueiredo said. 

“In this case, any reduction could represent important gains [for the industry’s] competitiveness," Figueiredo said. Energy makes up 20-30% of the total costs for parts of the chemical industry.

The executive said the chemical industry has been operating with a fairly high level of idleness, which was caused mainly by the increase of production costs, especially energy. 

By: Leo Siqueira
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