European ethanol producers fear influx from USA and Brazil
May 19, 2020
EU ethanol producers are warning that a potential influx of cheap US and Brazilian imports threatens their businesses and have urged the European Commission (EC) to protect their industry, Reuters reported on 6 May.
The coronavirus pandemic had led to sharp falls in driving and air travel, forcing ethanol companies to drastically cut output and prices, notably in top producers the USA and Brazil.
European ethanol producers feared that record stocks in these countries could prompt them to increase their shipments to Europe when confinement measures were lifted and were asking the EC for quick action, including potential tariffs, Reuters wrote.
“The threat of injury is blatant,” European ethanol producers association ePure said in a letter sent to several European commissioners. “Prices in the European fuel ethanol market have dropped from €600m3 to below €400 m3 in March.
“In the USA and Brazil, the two major ethanol producers accounting for 55% and 30% of the world’s ethanol production respectively, the industry is faced with a similar situation - shut downs, ‘force majeure’ declarations and record high stocks which could flood at low prices an already depressed European market.”
The EU could raise tariffs on ethanol fuel temporarily to allow the industry to recover without being pressured by cheap imports, Sylvain Demoures, head of French ethanol makers’ lobby SNPAA, suggested.
The French government was preparing a formal request to the EU, the environment minister had said last week without giving details. France was the EU’s top fuel ethanol producer.
“We need to be vigilant,” Alain Commissaire, chief executive of Cristal Union, told Reuters. “US producers can put in place systems that would destroy us in 12 months.”
Cristal Union had had to cut ethanol production by more than 80% since the start of the crisis, he said.
This had been only partly offset by a rise in the production of hand sanitisers to fight COVID-19, an initiative taken by other European producers including French competitor Tereos, Germany’s Verbio and Britain’s Ineos.