WASHINGTON, Oct. 11, 2017 - A Brazilian ethanol tariff hike paired with the country’s forthcoming energy policy could sharply reduce the competitiveness of U.S. ethanol. While the U.S. is currently the world’s number-one ethanol exporter, Brazil runs a distant second place. The USDA reports that as of July, Brazil this year had purchased 40 percent of the 770 million gallons of ethanol exported from the United States. Additionally, nearly all of the 24 million gallons of ethanol imported by the U.S. consisted of Brazil’s sugar-derived ethanol – an advanced biofuel under the renewable fuel standard (RFS). The trade is being threatened by a 20-percent duty imposed by Brazil on U.S. ethanol imports above the tariff rate quota of 160 million gallons per year. The quota equals less than four months of current shipments. Brazil’s energy policy, RenovoBio, aims to increase ethanol production and consumption as called for in the country’s Paris Climate commitment to reduce greenhouse gases.

Start your day with the Agri-Pulse Daily Harvest Email. Sign up for a four-week free trial by clicking here!