International Forum on the Future of Ethanol gathered industry
executives and associations (Photo: Revista Opinião)

Recognition from the U.S. Environmental Protection Agency (EPA) as an "advanced renewable biofuel” means ethanol from sugarcane already has a passport to enter the U.S. market. However, to obtain a “visa” and export up to 15 billion liters per year by 2020, Brazilian producers have to overcome trade barriers and invest in infrastructure and production technology. The comparison was made on Monday (August 30) by the Chief Representative in North America for the Brazilian Sugarcane Industry Association (UNICA), Joel Velasco, at the 13th International Forum on the Future of Ethanol held in Sertãozinho, in the heart of the world’s largest sugarcane producing region in the Brazilian state of São Paulo.

Velasco, whose job is largely to spread in the U.S. the benefits and advantages of ethanol produced from sugarcane, was one of the invited speakers at the annual Forum, which serves as the opening event for the International Sugarcane Trade Show, in its 18th edition, and the Sugarcane Agriculture Business and Technology Trade Show, in its eighth year. The simultaneous events, better known as Fenasucro & Agrocana, held from August 31 to September 3, together form the leading trade show focused on Brazil’s sugar and ethanol production.

“Given the growing demand for advanced biofuels in the U.S., if investments are included in the expansion of Brazilian mills and the U.S. tariff is reduced, I believe Brazilian producers will have significant new business prospects,” he evaluates. Velasco refers to the US$0.54 tariff imposed on each gallon of sugarcane ethanol imported by the United States. The tariff’s maintenance or termination will be decided by the U.S. Congress later this year.

Joel Velasco explains the achievements and challenges for Brazilian ethanol in the U.S. market (Photo: Revista Opiniões)

The UNICA executive argues that "increased consumption of new products from renewable sources in the United States, such as sugarcane-based plastics and diesel, will be a great opportunity when you look at the price of around US$80 for a barrel of oil. In his presentation at the Forum in Sertãozinho, Velasco explained that U.S. legislation stipulates that the minimum consumption of renewable fuels must be over 45 billion liters annually by 2010. That volume is projected to increase to 136 billion liters per year by 2022.

Infrastructure

The need to implement public policies in Brazil was also addressed by Velasco. He stressed these are prerequisites for the successful expansion of ethanol in the international market. "Be it in the construction of pipelines or implementation of clear environmental rules, ethanol’s global competitiveness depends on the competitive expansion of the sugar-energy industry here in Brazil," he said.

An equally important measure according to Velasco is the establishment of a tax differential for renewable fuels compared to fossil fuels. "One example is the standardization of the Tax on Circulation of Goods and Services (ICMS in Portuguese) levied on ethanol at varying levels by different Brazilian states. If charges throughout Brazil were unified at the 12% rate charged in Sao Paulo, ethanol sales would be easier to manage and would most likely grow," he noted.

UNICA’s Chief Representative in Washington concluded that defining a regulatory framework on bioenergy specific to Brazil, that highlights its environmental, social and economic benefits, "is fundamental to advance ethanol in the national energy matrix as well as internationally."