UNICA Supports End of Ethanol Tariff

Earlier this week, the Senate compromised on some ethanol legislation that would eliminate the ethanol blenders tax credit (VEETC) at the end of this month. The agreement also eliminates the ethanol tariff on July 31, 2011, five months ahead of the original expiration date of December 31, 2011. The bipartisan Ethanol Reform and Deficit Reduction Act was submitted by U.S. Senators John Thune (R-SD) and Amy Kobuchar (D-MN) and sought to transition to a more sustainable model of renewable fuel incentives.

The Brazilian Sugarcane Industry Association (UNICA) was pleased with the news and has been lobbying for several years to eliminate the ethanol tariff. Brazil eliminated its ethanol tariff early last year. Leticia Phillips, UNICA’s representative in North America said, “As the world’s top producers of ethanol, the U.S. and Brazil should lead by example in creating a free market for clean, renewable energy.”

Phillips noted that last month, the U.S. Senate voted to end ethanol subsidies and UNICA looks forward to continue to work with Congressional leaders to accomplish that goal.

“We thank Senator Feinstein for her leadership on this important issue and urge Congress to pass it as soon as possible,” continued Phillips. “Ending the 30-year-old tariff on imported ethanol will help lower fuel prices and provide Americans with greater access to clean and affordable renewable fuels like sugarcane ethanol.”

She concluded, “Consumers win when businesses have to compete in an open market, because competition produces higher quality products at lower costs. The same principle holds true for renewable fuels. Allowing other alternative fuels like sugarcane ethanol to compete fairly in the U.S. will save Americans money, cut dependence on Middle East oil and improve the environment.”

Ironically, earlier this week Bloomberg reported that the Brazilian government is considering lowering the country’s ethanol requirement from 25 percent to 18 percent due to several back-to-back reduced sugarcane harvests.

One thought on “UNICA Supports End of Ethanol Tariff

  1. Your “ironically” comment is wrong. A few years ago, it was the US that needed Brazilian ethanol because of harvest problems. That ethanol could have come into the US at a much better price and dropped prices for US consumers at the pump if there were no import tariff. Now it’s Brazil that needed to import – a very, very small amount you should have pointed out: about 300 thousand liters to be exact, or a little over 1% of what Brazil produces in a year. And Brazil imported US ethanol without extra costs tacked on, because they eliminated their import tariff over a year ago. This is why there should be a free market, without protectionist policies for US ethanol that cost US taxpayers a lot of money. Until cellulosic ethanol happens, we’re dealing with an agricultural commodity, and anything agricultural is subject to ups and downs of all sorts. If the US and Brazil really want to see ethanol become a solid, reliable option in more countries, they need to eliminate all barriers between them. The two countries should be helping one another and working together, not forcing consumers and the market as a whole to put up with so much knuckle-head, backward, protectionist thinking,