BIOMASS HUB

News surfaced earlier this week that the Brazilian Sugarcane Industry Association (UNICA) has been working behind the scenes in Brasilia, the country’s capital, to scrap the 20% import tariff Brazil imposes on ethanol.  The existence of an ethanol tariff in Brazil is surprising news, especially coming from a country who’s President has offered up his fair share of gripes about US’ ethanol import tariffs.

It seems that UNICA avidly defends free trade for renewable fuels.  The Association is likely bullish on sugar ethanol’s inherent economic and environmental advantages over corn ethanol and wants to take the gloves off to go toe to toe with corn ethanol to compete for US, Brazilian, and global markets.  But most recently, UNICA asserted a more watered-down position and defended its call as a necessary measure to counter a weather-related shortfall in sugarcane production, which prompted the Brazilian government to slash ethanol blending mandates from 25% to 20%.

Geoff Styles, writing for the Energy Collective, offers some interesting insights about Brazil’s ethanol import tariff.  He notes that UNICA’s call for the elimination of ethanol tariffs shows two things: first, that Brazil’s extraordinary reliance on biofuels creates an new kind of energy-security reliance on crop yields rather than geopolitics, and second, Brazil’s celebrated energy independence is more a function of domestic oil production, not ethanol policies.

The tariff battle between the US and Brazil has been amusing to watch, but things could get much more dramatic in due time.

Image: Flickr/smcgee