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Lawmakers Press Biden Administration to Fight Brazil Ethanol Tariff, Open Ag, Biofuels Trade

Todd Neeley
By  Todd Neeley , DTN Environmental Editor
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A group of 20 lawmakers asked the Biden administration to fight a planned increase in Brazil's tariff on U.S. ethanol. (DTN file photo by Chris Clayton)

LINCOLN, Neb. (DTN) -- With Brazil set to reconsider an ongoing tariff on U.S. ethanol imports a group of Republican lawmakers asked the Biden administration to be active in an upcoming public-comment period on the 16% tariff that is expected to rise to 18% this year. In addition, lawmakers have asked the administration to take steps to open more biofuels and agriculture export markets.

The lawmakers sent two separate letters on Monday, one to U.S. Trade Representative Katherine Tai and U.S. Secretary of Agriculture Tom Vilsack, and a second letter to President Joe Biden and Tai.

In that letter, the 20 lawmakers led by Reps. Randy Feenstra, R-Iowa, and Darin LaHood, R-Illinois, asked Tai and Vilsack to "engage" during the public-comment period to assure the interests of U.S. farmers and biofuels producers are represented.

The Foreign Trade Chamber at the Brazil Ministry of the Economy, or CAMEX, reinstated the import tariff on American ethanol on Feb. 1, 2023, and is planning to raise the tariff "while ethanol shipped to the United States from Brazil receives duty-free treatment," the letter said.

"Moreover, Brazilian ethanol imports are incentivized under the U.S. Renewable Fuels Standard and the newly created 40B Sustainable Aviation Fuel tax credit, as well as California's, Oregon's and Washington's low-carbon fuel standard programs. This treatment is not reciprocated for American corn ethanol in Brazil.

"We urge you to engage during CAMEX's comment period to further highlight this issue and remind CAMEX that this tariff imbalance, coupled with ongoing non-tariff barriers such as Brazil's impenetrable RenovaBio biofuel program, puts American ethanol, farmers, and rural communities at a severe economic disadvantage."

The letters were signed by LaHood, Feenstra, Mike Bost, Marchy Kaptur, Don Bacon, Mike Flood, Mary E. Miller, Mark Alford, Derrick Van Orden, Jake LaTurner, Brad Finstad, James R. Baird, Mike Carey, Adrian Smith, Mariannette Miller-Meeks, Lisa C. McClain, Michelle Fischbach, Dusty Johnson, Ashley Hinson and Zach Nunn.

In the second letter, the lawmakers asked the administration to remove trade barriers and to open new export markets for farmers and biofuels producers.

"These homegrown fuels have massive potential not only for the United States economy but also for countries throughout the world seeking clean fuels to lower emissions and energy prices," the lawmakers told Biden.

"The United States exports approximately 1.5 billion gallons of ethanol annually, utilizing 500 million bushels of corn that is predominantly supplied by American farmers. The production and exportation of these biofuels provide an enormous boost to the rural communities that we represent. With the global SAF (sustainable aviation fuel) market anticipated to grow from under $2 billion this year to more than $133 billion in 2033, and with American-based biofuel feedstocks well poised to meet the scale of that growth, it is critically important that USTR remains committed to supporting American biofuel producers during global trade discussions."

The lawmakers asked the administration to pursue free-trade agreements to "level the playing field for American workers, farmers, and businesses."

If not, they said the administration should work to reduce trade barriers.

For example, India has set a national blending goal of 20% ethanol by 2025 but maintains a ban on imports of fuel-grade ethanol.

The United Kingdom, they said, also has applied a cap on crop-based biofuels that begins in 2027 and becomes increasingly restrictive through 2032.

"As these trade restrictive policies continue and new market access barriers emerge, USTR must defend American farmers and our nation's position as a leading producer of biofuels," the lawmakers said.

"Therefore, we strongly urge your administration to redouble its efforts toward establishing new market opportunities and removing existing trade barriers for our farmers and biofuels producers."

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