Brazil’s sugar cane producers’ association yesterday denounced French president Nicolas Sarkozy – who accused Brazil of “dumping” biofuels – and called for the removal of US import tariffs on ethanol. Brazil, in spite of its indeniable success in the widespread use of ethanol at home, has become frustrated with the difficulties of increasing its market share in the nascent ethanol international market.
Sarkozy last week attacked Brazil and the US, the world’s largest ethanol producers, of “unprecedented fiscal dumping in the production of biofuels”. “This is nonsense,” Marcos Jank, president of the Brazilian sugar cane industry association Unica, told Emerging Markets. “Brazil has had no subsidy on ethanol since the 1980s. There may have been a confusion or he might have been carried away during a public speech,” he added.
At a meeting of the French farmers’ lobby FNSEA, Sarkozy also blamed tax breaks tto the sector. “This is inaccurate,” said Jank.
The Brazilian producers feel they are still battling to convince public opinion that biofuels are part of the solution to the world’s quest for alternative sources of renewable energy rather, than part of the problem of climate change.
This latest war of words between a prominent member of the European Union and Brazil show how great the divide remains over trade issues.
Meanwhile, Brazilian producers have deplored the lack of progress on the removal of US import tariffs in spite of efforts by the Inter-American Ethanol Commission to have them removed.
“I do believe there is momentum to modify, eliminate or phase out the tariff, and that’s a good thing,” said Jeb Bush, co-chairman of the commission, in an interview with Emerging Markets.
There is widespread evidence that US-made ethanol, which is derived from corn, is less energy efficient than sugar cane ethanol. “There is a concern about the net benefit to the environment to increasing corn production in the Midwest. US producers alone can’t meet the goal of producing 12 billion gallons of biofuels that are to be consumed in the United States by 2015,” said Bush.
The Brazilian ethanol producers also face mounting criticism of their record on the environment, as they have become frequent targets of NGOs.
“Ethanol is pushing into the cerrado [savannah] in Brazil, which is then driving cattle further north, and that’s what we saw recently in the high deforestation of the Amazon, Kate Horner, international climate and energy campaigner at Friends of the Earth told Emerging Markets.