Brazilian Sugarcane Ethanol Launches Marketing Blitz in Face of U.S. Tariffs

 

Calling themselves the “underdogs,” the Brazilian Sugarcane Industry Association (UNICA) has today launched an advertising campaign and a new website, sweeteralternative.com, to bring awareness of the successes of the Brazilian ethanol industry to a U.S. audience.

The UNICA campaign claims to simply educate the U.S. about how beneficial Brazilian sugarcane ethanol is for both consumer’s pocketbooks and the environment… but the way I see it, the marketing is clearly aimed at changing the subtext of the convoluted tariff and taxation systems currently in place that have essentially banned the importation of Brazilian ethanol into the U.S.

Not coincidentally, those tariffs are expiring at the end of this year unless congress renews them.





At a tariff of $0.54 per gallon, and an additional 2.5% tariff on the value of the imported ethanol, cheap Brazilian ethanol is found virtually nowhere in this country. Meanwhile we subsidize U.S. corn ethanol production with taxpayer money to the tune of $0.45 per gallon. This kind of protectionist policy is cheating the U.S. out of access to cheap, plentiful, and environmentally beneficial fuel that is available right now while simultaneously driving up fuel costs to consumers. But we wouldn’t want to upset the gigantic great plains state corn lobbies now would we?

While the U.S. struggles with ways to get ethanol into the hands of more people in ways that don’t hurt the environment more than gasoline and that don’t require huge amounts of government subsidies, Brazil has already replaced more than half of their gasoline supply with ethanol. As they like to say, gasoline is now the alternative fuel in Brazil. Just last month Brazil celebrate their 10 millionth flex fuel capable vehicle rolling off the assembly line.

Brazil is in an excellent position to be an ethanol supplier: They have some of the best land and climate in the world with which to grow sugarcane, and sugarcane, by its nature, has proven to be one of the best feedstocks for the production of so-called first generation ethanol. Because of that we should be working with them to bring that bounty here. Brazil, unlike some in the U.S. believe, is a stable democracy with a very large economy and would be a willing business partner without alterior motives.

With slogans like “Cane in the tank means money in the bank,” and “For drivers, competition means even regular gasoline would cost less,” the UNICA marketing campaign is aimed squarely at getting rid of the anti-competitive tariffs… but can they get past the ambivalence of the average U.S. consumer? When you start talking tariffs and taxes and importation and ethanol, eyes start glazing over as the conversation takes a turn into areas that require more than your average amount of thinking.

As a recap of what the Brazilian biofuels industry has accomplished:

  • All fuel sold in Brazil contains a minimum 20-25% blend of ethanol
  • The unsubsidized Brazilian ethanol industry offers a fuel that is on average $1 below the price of gas
  • Virtually all 33,000 Brazilian gas pumps offer ethanol blends up to E100
  • Just 1% of the arable land in Brazil is being used to produce sugarcane ethanol
  • 45% of Brazilian fuel for cars is from sugarcane
  • The food industry is growing faster than the ethanol industry, disproving the food vs. fuel arguments in Brazil
  • 90% of all new automobiles sold are flex-fuel automobiles
  • 100% of GM vehicles produced in Brazil are flex-fuel
  • More than 20% of all cars on the road in Brazil are flex-fuel vehicles today

What’s crazy is that even our own EPA has just concluded that sugarcane ethanol has lifecycle, crade-to-grave, net GHG emissions profile 60% better than gasoline, whereas Corn ethanol ranges from a being 30% worse than gasoline (if it uses coal power) to being only 30% better than gasoline (if it’s a modern facility powered by natural gas). And all of those benefits of sugarcane ethanol come at competitive cost much lower than corn ethanol. So you tell me, which one would be better for our economy and the environment?

Hopefully our government can wake up and realize that if we can’t make our own corn ethanol competitive on the world stage, we shouldn’t be dumping millions of taxpayer dollars into it. Instead we should be importing Brazilian ethanol until such time as cellulosic and algae fuels are commercially viable and producing ethanol at much cheaper prices than even sugarcane — and at much greater environmental benefit.

What do you all think? I think it’s time to end the tariffs. Bring on the cheap Brazilian ethanol!

Source and Image Credit: UNICA





About the Author

Not your traditional car guy.
  • Chris Almanza

    I would be in favor of removing the tariffs if it meant that no American jobs would be lost. Unfortunately, that is going to be the ramifications of removing what few protections we have in place for American workers (even if they are foreigners in this country doing the work – the work is still here and those workers tend to spend the money they make here and pay taxes in some fashion). I’m all for cleaner energy, but the American consumer has to have a job so they can consume.

  • Chris Almanza

    I would be in favor of removing the tariffs if it meant that no American jobs would be lost. Unfortunately, that is going to be the ramifications of removing what few protections we have in place for American workers (even if they are foreigners in this country doing the work – the work is still here and those workers tend to spend the money they make here and pay taxes in some fashion). I’m all for cleaner energy, but the American consumer has to have a job so they can consume.

  • Tim Cleland

    It’s way past due to end these tariffs (and any subsidies to the corn farmers). No one is owed the

    right to be a corn farmer. You either get by on your own or you move on to other work…don’t force

    taxpayers to create demand for your corn.

  • Tim Cleland

    It’s way past due to end these tariffs (and any subsidies to the corn farmers). No one is owed the

    right to be a corn farmer. You either get by on your own or you move on to other work…don’t force

    taxpayers to create demand for your corn.

  • Pete Sandfort

    Well, let’s see. We import Brazilian cane ethanol and let our own agriculture languish. Brazil pushes other farmers into the Amazon slashing the rain forest and CARB wants us to pay a penalty for their environmental travesty. Brazil temporarily dropped their ethanol import duty as a purely political move to influence our congress, a no risk move since they have (also temporarily) reduced their ethanol mandate. You want to send more money to others while penalizing our own countrymen. No a good move. Our government told our farmers to grow more corn and produce ethanol with the surplus. They did. Now you want to penalize them. I agree that the blender’s credit could be modified when margins are adequate, but insuring that the billions we invested are wasted to improve Brazil’s bottom line is not in our best interest. You referenced dirty coal as a fuel for our ethanol plants. Only 2% of our plants use coal, so that is a non-issue. Which one is better for our economy? That’s obvious – corn ethanol.

  • Pete Sandfort

    Well, let’s see. We import Brazilian cane ethanol and let our own agriculture languish. Brazil pushes other farmers into the Amazon slashing the rain forest and CARB wants us to pay a penalty for their environmental travesty. Brazil temporarily dropped their ethanol import duty as a purely political move to influence our congress, a no risk move since they have (also temporarily) reduced their ethanol mandate. You want to send more money to others while penalizing our own countrymen. No a good move. Our government told our farmers to grow more corn and produce ethanol with the surplus. They did. Now you want to penalize them. I agree that the blender’s credit could be modified when margins are adequate, but insuring that the billions we invested are wasted to improve Brazil’s bottom line is not in our best interest. You referenced dirty coal as a fuel for our ethanol plants. Only 2% of our plants use coal, so that is a non-issue. Which one is better for our economy? That’s obvious – corn ethanol.

  • ChuckL

    Perhaps we could just drop the tariffs and subsidies and solve the problem. I am certain that with a profit motive the costs could come down. Then again, if Obama succeeds with his Value Added Tax the total price will go up anyhow.

    We also have to look at all sources for ethanol production not just the most common now. The two in this discussion are among the worst in terms of ethanol per unit of feed stock.

    Now, if we need money to replace the loss of ethanol taxes, I suggest that we stop the tobacco subsidies.

  • ChuckL

    Perhaps we could just drop the tariffs and subsidies and solve the problem. I am certain that with a profit motive the costs could come down. Then again, if Obama succeeds with his Value Added Tax the total price will go up anyhow.

    We also have to look at all sources for ethanol production not just the most common now. The two in this discussion are among the worst in terms of ethanol per unit of feed stock.

    Now, if we need money to replace the loss of ethanol taxes, I suggest that we stop the tobacco subsidies.

  • It doesn’t make sense to exchange reliance on one kind of imported transportation essentials for another. This is as true for fossil fuels, batteries and rare earth metals for electric cars and ethanol or other advanced biofuels.

    Brazil has done wonderful and amazing things, shown us and the world a way to become more energy independent and secure. We should follow this part of their example.

    We can encourage Brazil to improve the sustainability of their industry and supply many other parts of the world that don’t have resouces to sustainably grown their own fuel. That’s not the US. We have the resources to become sustainably secure, relying on existing and developing practices and technologies.

    Tariffs and taxes that encourage the investment needed to achieve this goal seem to be necessary, as neither government nor private financers have put money into this sector without them. If the money from these taxes is cycled into dedicated funds to develop this industry sustainably, benefits will accrue to the military as well as to civilian interests; will address energy security issues as well as economic development, climate change mitigation and military strategic flexibility.

  • It doesn’t make sense to exchange reliance on one kind of imported transportation essentials for another. This is as true for fossil fuels, batteries and rare earth metals for electric cars and ethanol or other advanced biofuels.

    Brazil has done wonderful and amazing things, shown us and the world a way to become more energy independent and secure. We should follow this part of their example.

    We can encourage Brazil to improve the sustainability of their industry and supply many other parts of the world that don’t have resouces to sustainably grown their own fuel. That’s not the US. We have the resources to become sustainably secure, relying on existing and developing practices and technologies.

    Tariffs and taxes that encourage the investment needed to achieve this goal seem to be necessary, as neither government nor private financers have put money into this sector without them. If the money from these taxes is cycled into dedicated funds to develop this industry sustainably, benefits will accrue to the military as well as to civilian interests; will address energy security issues as well as economic development, climate change mitigation and military strategic flexibility.