Trade deal opens EU to more ethanol imports from South America

South American trading bloc Mercosur and the EU have reached a trade agreement which establishes a 450,000 tonnes/year quota for duty free ethanol to enter Europe.

Biodiesel Magazine reported on 2 July that an additional 200,000 tonnes/year of ethanol for all uses would be subject to an in-quota duty of one-third of the current rate.

According to the EU, the volume would be phased in six equal annual stages.

European association for renewable ethanol ePure has criticised the deal, calling it a blow to Europe’s farmers and ethanol industry.

ePure said the deal made concessions to Mercosur counties (Argentina, Brazil, Paraguay and Uruguay) that essentially sacrificed the EU agricultural sector and domestic production of ethanol in exchange for gains elsewhere.

“The agreement essentially trades away Europe’s ethanol industry unless the EU can act quickly and grow the European ethanol market to accommodate a flood of imports,” the group said in a statement.

“That means aligning trade policy with environmental and renewable energy policy by, for example, ensuring that the EU’s long-term decarbonisation strategy includes a stronger push for sustainable biofuels such as ethanol. It also means that during the implementation phase of the agreement, member states and the European Parliament fight to give EU farmers the tools to absorb the negative imports of imports originating in Mercosur.”

“In agreeing to open its markets to Brazilian ethanol, the EU is contradicting its own efforts to increase domestic renewable energy sources in transport, killing incentives to invest in advanced ethanol, and making life even tougher for Europe’s already struggling farmers,” said ePure secretary general Emmanuel Desplechin.

Brazilian sugarcane industry association UNICA said in a statement that “although we regret that the negotiations were not ambitious enough to comprehensively address sugar and ethanol, we recognise that the agreement today represents the best deal possible based on the limitations imposed by the EU”.