EPA Decision Should Signal End to Ethanol Subsidies and Trade Protection

By Brazilian Sugarcane Industry Association unica, PRNE
Tuesday, October 12, 2010

WASHINGTON, October 13, 2010 - In response to the U.S. Environmental Protection Agency's (EPA) decision
today to allow 15% ethanol blends for 2007 and later model vehicles, an
increase from the current 10% blend already approved for all vehicles, the
Brazilian Sugarcane Industry Association (UNICA) issued the following
statement. It should be attributed to Joel Velasco, UNICA's Chief
Representative in North America.

Many U.S. ethanol groups have argued recently that after 30 years of tax
credits and trade protection they are ready to compete without subsidies
provided the government grants them greater access to America's fuel pumps.
With the EPA's decision to increase ethanol limits by 50% for newer vehicles,
that day has arrived.

The attention now shifts to the U.S. Congress where lawmakers are
debating what to do with the 30-year-old ethanol tax credit and import tariff
that cost US$6 billion annually. Allowing these subsidies to expire as
scheduled at the end of the year will help lower gas prices, save taxpayers
money and provide Americans with greater access to advanced renewable fuels
like sugarcane ethanol.

As we indicated in our comments during the agency's rulemaking, Brazil
has decades of successful experience blending ethanol with gasoline at 25%
concentrations. Brazilian ethanol is primarily sugarcane ethanol - a
renewable fuel that is typically less expensive and cuts greenhouse gases
much more sharply than other ethanol options. Allowing other alternative
fuels like sugarcane ethanol to compete fairly in the U.S. would save
American consumers money at the pump, cut dependence on Middle East oil and
improve the environment.

Brazil took an important first step to build an open and global biofuels
marketplace by eliminating its tariff on imported ethanol through the end of
2011. UNICA is asking the Brazilian government to make the tariff elimination
permanent if the U.S. Congress will do the same and drop the tax on imported
ethanol. As the world's top producers of ethanol, the United States and
Brazil should lead by example in creating a free market for clean, renewable

Consumers win when businesses have to compete in an open market, because
competition produces higher quality products at lower costs. The same
principle holds true for the renewable fuels market where competition will
create a race to the future and generate better alternatives for consumers.
Americans will benefit from having more options - like sugarcane ethanol -
available at the pump, and that's why the U.S. Congress should follow-up the
EPA decision by allowing the ethanol tax credit and import tariff to expire
on December 31, 2010.

The Brazilian Sugarcane Industry Association (UNICA) is the leading trade
association for the sugarcane industry in Brazil, representing nearly
two-thirds of all sugarcane production and processing in the country.
Sugarcane ethanol is currently effectively unavailable in the United States,
due to an elaborate system of subsidies and trade barriers erected by the
U.S. Congress. This current policy expires December 31, 2010. More on
sugarcane ethanol at www.SweeterAlternative.com.

    Contact: Ana Carolina Lessa

Ana Carolina Lessa, +1-202-506-5299, Washington at unica.com.br

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