SAO PAULO, Brazil, Aug. 7 /PRNewswire/ -- The Brazilian Sugarcane Industry
Association (UNICA) welcomes the U.S. Environmental Protection Agency's
decision to maintain the Renewable Fuel Standard (RFS) at its current level,
but urges Congress to reduce the imported ethanol tariff that increases the
cost of gasoline for American drivers.
"Today's EPA decision was sound. It is the high price of gasoline -- not
the Renewable Fuel Standard -- that is driving ethanol demand. Reducing the
blending mandate would have no impact on ethanol demand in the short term and
could jeopardize future production of advanced renewable fuels," says Joel
Velasco, UNICA's Chief Representative in Washington. "The next step -- and one
that Congress has yet to take -- is to reduce the distortive tariff on
imported ethanol. This one-of-a-kind tax on a clean energy alternative serves
only to punish American drivers by artificially inflating the price of
gasoline at the pump," he added.
The Ethanol Import Tariff of 1980 imposed a US$ 54-cent per gallon tariff
on imported ethanol. Designed as a temporary measure, the tariff was meant to
increase the amount of ethanol produced in the U.S. In 2007, domestic
production had increased to more than 6 billion gallons.
The 2008 U.S. Farm Bill reduced subsidies to the ethanol industry from
US$ 51-cents per gallon to US$ 45-cents per gallon. However, the tariff on
imported ethanol remains unchanged at US$ 54-cents per gallon. Lowering the
subsidy without lowering the tariff keeps sugarcane ethanol, a less expensive
fuel alternative, out of reach for many U.S. drivers.
The price distortion caused by the U.S. tax on less expensive imported
ethanol is outlined in a recent report by the Farm Foundation, which notes:
"The U.S. tariff on imported ethanol introduces a potentially greater
distortion than does the subsidy or mandate. Since high oil prices directly
lead to higher corn prices, corn ethanol becomes much more expensive.
Sugarcane-based ethanol is less expensive to produce than corn ethanol at any
oil price, but the gap widens at higher oil prices. So removal of the tariff
on imported ethanol would lead to the biofuel coming from the lowest cost
source -- sugarcane -- which would reduce some pressure on corn prices and
provide the United States with lower cost ethanol. Brazil has the potential to
expand ethanol production substantially without increasing world sugar prices
substantially, so imports down the road could be quite high."
For more information on what Congress can do to lower fuel prices in the
U.S., please visit www.sugarcaneethanolfacts.com.
ABOUT UNICA: The Brazilian Sugarcane Industry Association (UNICA)
represents the top producers of sugar and ethanol in the country's
South-Central region, especially the state of Sao Paulo, which accounts for
about 50% of the country's sugarcane harvest and 60% of total ethanol
production. UNICA develops position papers, statistics and specific research
in support of Brazil's sugar, ethanol and bioelectricity sectors. In 2007,
Brazil produced an estimated 487 million metric tons of sugarcane, which
yielded 30.6 million tons of sugar and 22 billion liters of ethanol.
FOR MORE INFORMATION, PLEASE CONTACT:
Adhemar Altieri
Corporate Communications Director
Brazilian Sugarcane Industry Association - UNICA
(5511) 3093-4949
(5511) 3812-1416 - fax
aaltieri@unica.com.brwww.unica.com.br
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