Price and market trends: Europe fuel ethanol market sources back ePURE alert over Peru exports

14 February 2014 00:00 Source:ICIS Chemical Business

European fuel ethanol market sources said on 5 February that the European Renewable Ethanol Association (ePURE) had raised a valid concern about a surge in ethanol exports from Peru to Europe.

“These volumes are significant and exerting downward pressure on European values. If we let these things come in we can’t build a sustainable industry going forward,” one source said.

“I don’t think the European Commission will do anything – these duty free agreements are done annually so it will take at least two to three years to change. ePURE were more raising the point for the future, not for an immediate effect,” the source added.

“The volume [of imports] is substantial when it comes to Rotterdam,” another source said. “I’m not sure how successful ePURE will be but they have a point. The EU might get a bit annoyed by the requirements from ePURE as every few months they bring something up. It’s good for the ethanol industry though.”

ePURE alerted the European Commission to a dramatic increase in ethanol exports from Peru to Europe since the country entered into a free trade agreement last year.

According to ePURE, exports from Peru to Europe more than tripled to over 93m litres between January and October 2013.

Furthermore, ePURE alleged that Peru is substituting missing domestic supply with US product, importing 84m litres from the US between January and October 2013.

“It is apparent that US ethanol producers are ultimately gaining from this operation at the expense of European ethanol producers, jeopardising investments made to achieve renewable energy targets, create new markets for farmers and generate employment in the EU. The European Commission must act to prevent the effects of poorly conceived bilateral trade agreements which undermine its own domestic policies,” said Rob Vierhout, secretary general of ePURE.

By Sarah Trinder