International Agriculture News

Biofuels fight brewing between US, Brazil over ethanol

NEW YORK: The US biofuels industry, fresh off a win against Big Oil, is lining up for a fight with Brazil.

American ethanol producers said on Thursday in a letter to US Trade Repre­sentative Robert Lighthizer that they’re seeking Brazil’s suspension from a trade programme allowing duty-free imports into the US The move follows Brazil’s decision in August to slap a 20 per cent tariff on ethanol shipments from the US that exceed a 600 million litre annual quota.

The US ethanol lobby was buoyed last month by President Donald Trump’s instruction to Environmental Protection Agency Administrator Scott Pruitt to support the Renewable Fuel Standard, a law mandating the use of fuels such as corn-based ethanol and soy-based biodiesel. Trump’s personal intervention came despite the objections of oil refiners.

The spat with Brazil also comes as the White House pursues a protectionist agenda in dealing with international trade. On Thursday, the Commerce Department set import duties on biodiesel from Indonesia and Argentina after US producers said they were harmed by unfair state subsidies given to competitors in those countries.

The letter to Lighthizer was signed by three industry groups: The Renewable Fuels Association, Growth Energy and the US Grains Council. Ethanol in the US is made from corn, making the industry an important part of the farm lobby.

Bloomberg-The Washington Post Service.