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Brazil increases TRQ for ethanol

Brazil announced Tuesday that it has raised the quota on U.S. ethanol imports under the tariff rate quote (TRQ), up from 600 million liters per year to nearly 750 million liters per year, but three U.S. groups said they were not satisfied.

The TRQ regulates the threshold of ethanol that can be imported into Brazil without triggering a 20 percent tariff.

Growth Energy CEO Emily Skor said, “We appreciate the U.S. government’s efforts to raise the TRQ, however, we are disappointed that Brazil did not remove their tariff completely to allow a fully open market. Brazilian ethanol continues to have virtual tariff-free access to the U.S. and puts U.S. ethanol producers at a disadvantage at a time when they need it most.”

U.S. Grains Council President and CEO Ryan LeGrand said, “We are very disappointed Brazil did not fully consider the vast information we and the U.S. government provided them showing the detrimental and negative impact this TRQ has on Brazilian consumers by raising prices at the pump.”

Renewable Fuels Association President and CEO Geoff Cooper said, “Brazil’s decision to maintain its protectionist trade barrier against U.S. ethanol is extremely disappointing and represents a major setback in our relationship with the Brazilian sugar and ethanol industry. The token increase in the quota does nothing to provide relief to Brazilian consumers who face higher fuel prices because of Brazil’s discriminatory policy. Not only is the U.S. market wide open to ethanol imports from Brazil, but our Renewable Fuel Standard actually incentivizes imports by characterizing sugarcane ethanol as an advanced biofuel. But there is nothing ‘advanced’ at all about the unfair and unlevel playing created by Brazilian trade barriers. In light of Brazil’s action, it may be time for U.S. policymakers to reconsider our open-door trade policy regarding sugarcane ethanol.”

–The Hagstrom Report




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