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A Renewed Voice in the Debate Over Renewable Fuels

By Leticia Phillips posted May 28, 2013
Sugarcane ethanol plays a modest but important role supplying the United States with clean renewable fuel. Last year, Brazilian sugarcane ethanol comprised only 3 percent of all renewable fuel consumed by Americans, but provided nearly one-quarter of the U.S. supply of advanced biofuels. These vital facts are getting lost in a debate that’s heating up in Washington, D.C., so sugarcane ethanol producers plan to step up our profile.

Sugarcane ethanol plays a modest but important role supplying the United States with clean renewable fuel. Last year, Brazilian sugarcane ethanol comprised only 3 percent of all renewable fuel consumed by Americans, but provided nearly one-quarter of the U.S. supply of advanced biofuels. Is that amount significant? It is if you care about cleaner air and a healthier planet! The 460 million gallons of sugarcane ethanol Americans used in 2012 cut CO2 emissions by the same amount as planting nearly 57 million trees and letting them grow for 10 years.

These vital facts are getting lost in a debate that's heating up in Washington, D.C. over renewable fuels. The key policy – known as the Renewable Fuel Standard – was enacted to improve U.S. energy security and reduce greenhouse gases. And the Renewable Fuel Standard (RFS) is clearly working as Congress intended when measured in terms of increasing American consumption of renewable fuel. It has grown production and use of biofuels in the U.S. from around 4 billion gallons in 2006 to 15 billion gallons last year. But critics and special interests are lining up to urge changes by both Congressional legislators and environmental regulators.

So sugarcane ethanol producers, along with our colleagues in the advanced biofuels industry, plan to step up our profile. We'll take a more active role setting the record straight on the importance and benefits of this advanced biofuel – starting with new information available at our dedicated website: Sugarcane.org/rfs. Here you'll find a brief summary of the issue and our position that Congress and environmental regulators should maintain American access to clean, advanced biofuels like sugarcane ethanol. We also answer many frequently asked questions. Topics like: What is sugarcane ethanol? Why would Americans want it? What are advanced biofuels and other biomaterials from sugarcane? And many more.

You'll also see more regular posts from me and other collaborators here on the Sugarcane Blog. So to kick things off, I'd like to reiterate some guiding principles (first articulated by my friend and colleague Joel Velasco) that will serve as ground rules for our blogging and participation in the RFS debate:

  1. Honesty. Americans' trust in government keeps getting lower. I think this decline is mostly because our policy discussions are no longer honest debates, but a litany of overheated talking points that all too often veer from the truth. So, on this blog, we commit to sticking to the truth and promise to admit if we come up short. Honesty is the best prescription to regain the public trust.
  2. Consistency. Cherry-picking may be a good strategy at an orchard, but not for public policy. Being consistent means practicing what we preach, demanding accountability and, yes, being fair and balanced.
  3. Sweet Humor. There's nothing wrong with mixing a little fun with work, and we'll try to do that on this blog as well. Like this: In Brazil, a common sugar industry saying is "drink the best, drive the rest." That's because the national drink in Brazil, the "caipirinha", is made with sugarcane alcohol, which, when it fills the tank of our cars, is called ethanol. We're eagerly awaiting the "booze vs. fuel" debate to heat up. Any takers?

So take a look around and check back whenever you want an update. You'll find that the United States and Brazil are the world's largest biofuels producers and exporters. Both countries recently removed trade barriers protecting their domestic ethanol industries and have taken initial steps towards greater energy cooperation. And I firmly believe that Brazil and the U.S. have a responsibility to work together to build a global biofuels market that provides clean, affordable and sustainable solutions to the planet's growing energy needs. That's the ultimate goal of the campaign we renew today.

Why do Americans pay more for sugar?

By Leticia Phillips posted May 15, 2013
Most Americans who start the day stirring a spoonful of sugar into their coffee would be surprised to learn they generally pay more for the sweetener than residents of other countries buying it on the global market. Major American commodities traders track two prices for sugar – a world price and a more expensive U.S. price. Why the difference?

Most Americans who start the day stirring a spoonful of sugar into their coffee would be surprised to learn they generally pay more for the sweetener than residents of other countries buying it on the global market.  Major American commodities traders track two prices for sugar – a world price and a more expensive U.S. price.

Why the difference? According to the Wall Street Journal, "U.S. prices tend to be higher than world prices because the U.S. restricts sugar imports as part of the [U.S. Department of Agriculture’s] price-support program” for sugar (subscription required).  One USDA economist recently estimated this price-support scheme could cost American taxpayers $80 million in 2013 on top of requiring U.S. consumers to pay artificially higher prices for raw sugar, candy and other confections.

Given these sour facts and movement in the U.S. Congress to reform the sugar program, I'm not surprised the American Sugar Alliance is trying to change the subject to defend its price supports. Last month, the group released a report arguing that Congress must maintain current U.S. sugar policy "to shield consumers from foreign market manipulation," particularly by Brazil which subsidizes sugar production according to the American Sugar Alliance.

The influential Cato Institute took a look at the group’s report and summarized its findings succinctly:

The sugar lobby for years have been complaining that we need the sugar program, which keeps prices high for producers by keeping imports strictly controlled, in order to enable “reliable” (i.e., managed) access to sugar. Now they think sugar is too available (i.e., cheap)? For sure, if I was a Brazilian taxpayer, I would baulk at the thought of subsidising (if that in fact is the situation) the sugar addictions of my richer neighbours to my north, but as a consumer? Muito obrigado! The sugar lobby’s talking points are getting ever more creative. But none of them are valid. 

I added emphasis on the last line above and was tempted to end my rebuttal there!  However, the Brazilian Sugarcane Industry Association felt obligated to set the record straight on this misleading report which overstates Brazilian support for domestic producers and turns a blind eye to comparable programs in the U.S.  You can download our point-by-point response here, and see for yourself how the American Sugar Alliance’s report reveals “the desperate need of the American sugar industry to keep the U.S. market closed and protected from competition.”

Moving the Brazil-US Energy Cooperation a step closer

By Leticia Phillips posted Apr 05, 2012
As I write this, my Brazilian and American colleagues from government and private sector are working around the clock to ensure that President Dilma Rousseff’s trip to Washington D.C. on this upcoming Monday is a great success. Success for Brazil and success for the U.S. And because this is the President’s first trip to the U.S. in her current post it makes it all the more important. I am particularly glad that this meeting takes place at a time when the ethanol import tariff is an issue of the past. So, we can strike that item off the agenda once and for all.

As I write this, my Brazilian and American colleagues from government and private sector are working around the clock to ensure that President Dilma Rousseff’s trip to Washington D.C. on this upcoming Monday is a great success. Success for Brazil and success for the U.S.  And because this is the President’s first trip to the U.S. in her current post it makes it all the more important.  I am particularly glad that this meeting takes place at a time when the ethanol import tariff is an issue of the past.  So, we can strike that item off the agenda once and for all.

Those who follow us closely will know that as of the end of 2011 Brazil and the U.S. have zeroed their import tariffs on ethanol, creating a truly free and impressively large market for sugarcane derived biofuel. We and many others see this as a big milestone in time. If you add the Strategic Energy Dialogue to this you’ve got continued political commitment on the U.S. part. And if you add President Dilma’s and President Obama’s announcement of the expansion of the MoU on biofuels to include cooperation in aviation in March last year, you’ve got nothing short of a new era in energy cooperation between our two great nations.

We’ve passed some major hurdles, that’s for sure. We should now focus on finding ways to help create a global market for ethanol. This is my hope for the meeting next week. I strongly believe our governments are moving in the right direction on the MoU and on the Strategic Energy Dialogue. But I also believe we’d have more and faster impact if the private sectors in both countries are actively engaged in these processes. We’re hopeful that our government will call on us. Our capacity to bring new ideas to the table and our desire to innovate and invest can help make this political cooperation a reality for businesses and for consumers.

We all recognize that finding renewable, affordable and sustainable solutions to the world’s energy challenges requires a great deal of commitment and a good deal of courage. When Brazil and the U.S. eliminated their import tariffs they sent a clear signal to the global community. But both nation’s commitment and dedication need to be met with open minds and open arms if we want real, positive change for the environment.  Come end of day Monday, we might know what energy deliverables will be announced and what new challenges will be put before us. I am excited to see what the results will be.

Brazil and the U.S. have shown what’s possible when policy is right, when markets are open and when trade and innovation are encouraged. But the challenges we face are complex and they require everyone’s genuine commitment that goes beyond what’s said in policy papers. We need to get things done! The goal here is to move the world away from near complete dependence on fossil fuels. When the ambition is so high, you can safely assume that the gains will be too.

Our Authors

 

Géraldine Kutas, Head of International Affairs & Senior International Adviser to the President of UNICA Géraldine Kutas
Head of International Affairs & Senior International Adviser to the President

 

Leticia Phillips, Representative-North AmericaLeticia Phillips
Representative, North America

 

Sugarcane Solutions Blog

COP 23 – We are here!

• Visit UNICA’s booth at COP23, Bonn zone • Attend our discussion on how biofuels can fight climate change and promote sustainable development at the Brazilian Pavilion on 15 November at 14:00 CET with speakers from ApexBrasil, SE4ALL / Below 50, the World Bank, and UNICA.

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