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Biofuel groups urge Brazil to end ethanol tariff

This appeal challenges the existing trade disparities where U.S. ethanol faces duties while Brazilian ethanol enters the U.S. duty-free.

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This week, prominent U.S. biofuel organizations, including the U.S. Grains Council, Growth Energy, and the Renewable Fuels Association, submitted a formal comment to the Brazilian Chamber of Foreign Trade (CAMEX) advocating for the removal of Brazil's tariff on imported U.S. ethanol. This action follows a request from ABICOM, the Brazilian association of fuel importers, to eliminate the ethanol duties due to their inflationary impact on domestic fuel prices.

As of January 1, 2024, U.S. ethanol exports to Brazil are subject to an 18% tariff, while Brazilian ethanol enjoys duty-free entry into the United States. In their joint comments, submitted in Portuguese, the U.S. organizations highlighted the imbalance in trade policies between the two nations. They stressed that the U.S. industry would consider advocating for similar restrictions on Brazilian ethanol if the tariffs are not reevaluated.

The groups expressed their unwillingness to cooperate with Brazil on potential partnerships or technology transfers related to ethanol, including new uses such as Sustainable Aviation Fuel (SAF), unless the market is opened to free trade for ethanol. They emphasized that reinstating duty-free access for ethanol would enhance bilateral trade and cooperation between Brazil and the United States.

The organizations have vowed to continue monitoring the situation and will update their members following the conclusion of the comment period. This move underscores the growing tensions over ethanol trade policies and the desire for a more reciprocal trading relationship in the biofuels sector.

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