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Brazil Lifts Ethanol Import Tariff

U.S. grain and fuel groups see it as an opportunity to expand global use of low-carbon ethanol

Fuel gas ethanol pump E10 VIA PIXABAY Mar 2021

Beginning Wednesday, Brazil will suspend its 18% tariff on ethanol imports for the rest of 2022 in an inflation-cutting effort to reduce fuel prices domestically, said Brazil’s Ministry of Economy.

The Ministry said in its statement that import tariffs on ethanol and six food products will be zeroed by the end of the year, while tariffs on capital goods, computer and telecommunication products will be permanently reduced by 10%.

“The goal is to increase the productivity and competitiveness of the Brazilian economy by reducing the costs involved in the import of strategic products,” said the Ministry.

Several U.S. grain and fuel groups applauded the move.

In a joint statement, Ryan LeGrand, President and CEO, U.S. Grains Council, Emily Skor, CEO, Growth Energy, and Geoff Cooper, president and CEO, Renewable Fuels Association said they were pleased to see the temporary elimination of the 18% tariff, which would improve access for Brazil’s ethanol consumers as well as help meet its own decarbonization goals.

"This is an issue we have been working on for a number of years in meetings and correspondence with officials from Washington to Brasilia," said the leaders.

The groups welcomed the decision and see it as an opportunity to continue discussions with Brazil to expand the global use of low-carbon ethanol, reduce barriers to trade and elevate its prominence in energy discussions.

"Our hope is that with this action, Brazil and the U.S. will share with third parties the vision of free and open global ethanol markets," the statement read.

“We will continue to pursue a long-term, open and mutually beneficial ethanol trading relationship with Brazil as we work to make this temporary reduction permanent. We look forward to continuing to work closely with USDA and USTR to return to a fair and reciprocal trading relationship with Brazil regarding ethanol."

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