Brazil Trade Body Upholds Tariff Bump on US Ethanol Imports

Source: By Todd Neeley, Progressive Farmer • Posted: Thursday, June 20, 2024

LINCOLN, Neb. (DTN) — The Brazilian government moved one step closer to increasing a tariff on U.S. ethanol imports from 16% to 18% this week, after a key trade agency in Brazil upheld the move after a consultation period ended two months ago.

On June 13, the Foreign Trade Chamber at Brazil’s Ministry of the Economy, or CAMEX, upheld an 18% tariff on U.S. ethanol. U.S. ethanol groups joined efforts by the Brazil Association of Fuel Importers in advocating for the permanent removal of the tariff. Those groups include the Renewable Fuels Association, Growth Energy and the U.S. Grains Council.

“We remain extremely disappointed with this result and urge CAMEX and the Brazilian government to remove tariff barriers on U.S. ethanol and use this as an opportunity to strengthen the bilateral agenda and stimulate trade cooperation between Brazil and the United States,” the U.S. groups said in a statement earlier this week.

“This tariff has placed a heavy financial burden on Brazilian consumers in a misdirected effort to protect the domestic Brazilian ethanol industry, which enjoys free and increasing access to the U.S. market. The U.S. industry remains united in seeking parity with Brazilian exports with reciprocal market access and will seek to take additional measures to rectify this unfair tariff treatment. We are committed to striving for fair and balanced trade in ethanol with Brazil.”

In October 2023, Brazilian fuel importers formally requested a reduction in ethanol duties because the tariff reportedly raised fuel costs for domestic consumers.

In anticipation of an open comment period held by the Brazilian government, the three groups submitted joint comments:

“Considering this significant discrepancy in our historically productive commercial relationship between countries, we would like to stress that the U.S. industry will continue to advocate for restrictive measures to entry for Brazilian ethanol into the U.S. in the case that the Brazilian government does not rethink the current tariff policies,” the groups said.

“Despite the promising opportunities emerging new ethanol export markets could bring to both countries, we stress that we are not willing to cooperate with Brazil in any possible partnerships, nor with technology transferring or within new uses for ethanol such as SAF (sustainable aviation fuel), in case the market is not completely open for free trade for ethanol. We strongly consider the permanent reinstatement of the duty-free access for ethanol as a window of opportunity to strengthen the bilateral agenda and stimulate trade cooperation between Brazil and the United States.”

In March 2024 a group of Republican members of Congress sent two separate letters to U.S. Trade Representative Katherine Tai and U.S. Secretary of Agriculture Tom Vilsack, and a second letter to President Joe Biden and Tai.

In the first letter, 20 lawmakers led by Reps. Randy Feenstra, R-Iowa, and Darin LaHood, R-Illinois, asked Tai and Vilsack to “engage” during the public-comment period to assure the interests of U.S. farmers and biofuels producers are represented.

In the second letter, the lawmakers asked the administration to remove trade barriers and to open new export markets for farmers and biofuels producers.

The Brazilian government reinstated the import tariff on American ethanol on Feb. 1, 2023.

HEAVY-DUTY TRUCK RULE

On June 18, 2024, Clean Fuels Alliance America asked the U.S. Court of Appeals for the District of Columbia Circuit to review the U.S. Environmental Protection Agency’s final greenhouse gas emissions standards for heavy-duty vehicles-phase three.

In the final rule, EPA “specifically declined” to consider biodiesel and renewable diesel in combination with existing engines that are already widely available, according to a news release from Clean Fuels. The agency evaluated a range of potential alternative fuel and engine configurations for 2027-2032 heavy-duty vehicles.

“EPA put its thumb on the scale to favor electric and hybrid vehicles that are not guaranteed to be widely available in the timeframe addressed by this rule,” said Kurt Kovarik, vice president of federal affairs for Clean Fuels.

“The agency refused to consider the increasing availability of biodiesel and renewable diesel as an achievable, affordable technology for meeting the goals of the heavy-duty truck rule by 2032.”

 

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