Danger of Trade Barriers for Renewable Fuels Highlighted During WTO Director-General's Visit to Ethanol Mill in Brazil

By Brazilian Sugarcane Industry Association unica, PRNE
Saturday, April 17, 2010

PRADOPOLIS, Brazil, April 18, 2010 - It makes no sense for countries to adopt ambitious policies to reduce
greenhouse gas (GHG) emissions, while continuing to apply high tariffs on
clean technologies that can be instrumental to achieve reduction goals and
allowing fossil fuels to be traded freely. That was a key message delivered
this morning by the President and CEO of the Brazilian Sugarcane Industry
Association (UNICA), Marcos Jank, in a presentation to the World Trade
Organization's Director-General, Pascal Lamy.

Jank's presentation opened a visit by Lamy to the Sao Martinho sugar,
ethanol and bioelectricity plant in the town of Pradopolis, in the heart of
the world's largest sugarcane growing region in the Brazilian State of Sao
Paulo. The Sao Martinho plant processed 8.1 million tons of sugarcane in the
2009/2010 harvest season, making it the largest among Brazil's 430 cane
processing mills and largest in the world.

"It is essential that WTO member countries reconcile their trade and
climate change policies, and that we progress toward the inclusion of ethanol
in the list of environmental goods for which import tariffs must be
abolished," said Jank, as he argued that ethanol must be recognized as a
global energy commodity. To achieve that, UNICA defends that the customs
classification for ethanol should be changed, in order to reflect its growing
importance as a low-carbon energy solution.

The proliferation of proposals for legally binding criteria, developed by
institutions and individual countries to ensure that goods are sustainably
produced and don't add to climate change, was also raised during Jank's
presentation. "This might well become a challenge for WTO rules.
Sustainability must be a given and we all want to ensure that it is always a
vital consideration, but any binding criteria must be science based and
measurable in practice. Otherwise, we will be opening doors to a serious risk
of creating new trade barriers," he explained.

The greatest risk of new non-tariff barriers, according to Jank, lies in
the development of implementation mechanisms to prove compliance with
sustainability criteria. He added that compatibility with WTO rules of recent
initiatives, like the European Union's Directive on Renewable Energy Sources,
must also be assessed carefully as they also could lead to new barriers to
trade disguised as sustainability concerns.

Pascal Lamy visited the Sao Martinho mill as a guest of UNICA, following
a meeting with Brazil's External Relations Minister Celso Amorim in BrasĂ­lia
on Saturday, April 17. Later today he flies to Montevideo, Uruguay, and then
on to Buenos Aires, Argentina, to wrap up his South American trip.

ABOUT UNICA: The Brazilian Sugarcane Industry Association (UNICA)
(english.unica.com.br ) represents the top producers of sugar and
ethanol in the country's South-Central region, especially the state of Sao
, 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 2009, Brazil produced an estimated 605 million
metric tons of sugarcane, which yielded 33 million tons of sugar and 26
billion liters (6.9 billion gallons) of ethanol, making it the number-one
sugarcane grower and sugar producer in the world, and the second-largest
ethanol producer on the planet, behind the United States.

    CDN Corporate Communications
    Rosa Webster - (+5511)3643-2707 - rosa.webster@cdn.com.br
    Mariane dos Santos - (+5511)3643-2730 - mariane.santos@cdn.com.br

CDN Corporate Communications, Rosa Webster, (+5511) 3643-2707, rosa.webster at cdn.com.br, or Mariane dos Santos, (+5511) 3643-2730, mariane.santos at cdn.com.br

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