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

 

Nick Chambers

Not your traditional car guy.