You are here: Home Blog

Blog

Regulatory Oversight Threatens Sugarcane Ethanol Supplies to U.S.

By Leticia Phillips posted Jul 15, 2013
Brazilian sugarcane ethanol has become an important component of America’s advanced biofuels supply. But language tucked away in a proposed Environmental Protection Agency (EPA) rulemaking could effectively end U.S. access to this clean renewable fuel.

Brazilian sugarcane ethanol has become an important component of America’s advanced biofuels supply. But language tucked away in a proposed Environmental Protection Agency (EPA) rulemaking could effectively end U.S. access to this clean renewable fuel.

Sugarcane ethanol producers are concerned the regulatory process is being used to impose onerous, anti-competitive requirements on foreign ethanol. So today, we submitted comments on EPA’s proposed “Regulation of Fuels and Fuel Additives: RFS Pathways II and Technical Amendments to the RFS2 Standards.” Our comments highlighted what’s at stake for advanced biofuels in the U.S. and underline the threat posed to reducing greenhouse gas emissions from transportation. While official comments close today – despite our request for an extension – EPA still wants to hear from you

First, a little background. Under the Renewable Fuel Standard (RFS), sugarcane ethanol has become an important part of meeting America’s desire to use more advanced biofuels. Brazilian exports provided nearly one-quarter of the entire U.S. advanced biofuel supply in 2012, are projected to supply nearly 700 million gallons of fuel required to meet 2013’s targets, and could supply up to one billion additional gallons in 2014 – all with at least 61% fewer emissions than gasoline, according to the EPA.

Economic and Environmental Causes for Concern

However, EPA’s proposal as currently written would cause three principal problems that could halt the steady supply of this clean fuel.  

  1. Cost-prohibitive requirements – If approved, every sugarcane ethanol producer exporting to America would be subject to a host of burdensome new requirements, like physically segregating the ethanol they export from the production plant all the way to port arrival in the U.S. and spending considerable sums on expensive third-party auditors and bonds. By our estimates, producers would have to post a compliance bond of roughly $1 million for every 5 million gallons exported to meet EPA’s proposed rules. In addition, every gallon of sugarcane ethanol would have to be segregated from the moment of production across each of Brazil’s 400 mills, and could no longer be combined for shipment to domestic or other international markets if even one drop was destined for America.

    These new requirements will drive up production costs to the point where sending this advanced biofuel to the U.S. may no longer make economic sense. Biofuels thrive on the global market, and since half of Brazil’s sugarcane ethanol exports already go to other countries, new costly mandates could force exports away from America.
     
  2. Increased emissions – Segregated supplies would also boost associated transportation emissions of shipping sugarcane ethanol. Producers could no longer use pipelines or bulk storage facilities, rail shipments would have to be separated for exports, and ocean vessels might have to be shipped at less than capacity. More ships and trains mean more emissions – a change that seems incongruent to President Obama’s climate goals.
     
  3. Impossible requirements – Perhaps most concerning, proposed rules would force all Brazilian sugarcane ethanol producers to demonstrate compliance by January 1, 2013 – a deadline that passed more than seven months ago! By our calculations, $40 million in bond payments would be retroactively due on the 200 million gallons of sugarcane ethanol imported into the U.S. so far this year.

An Unnecessary Change

EPA’s intentions are laudable, and we support the agency’s goal of ensuring the regulatory system that tracks U.S. biofuel consumption (known as Renewable Identification Numbers or RINs) is accurate. But the current system monitoring foreign producers isn’t broken.

Significant protections already guard against RIN concerns, and the Brazilian sugarcane industry worked proactively with EPA to ensure Brazilian producers maintain records to comply with reasonable expectations. Plus, there has never been an instance of RIN fraud linked to Brazil.

These proposed changes appear to be a solution in search of a problem that will have (what we trust are) unintended consequences – namely threatening American access to one of the few advanced biofuels on the market today. We hope EPA will take our comments into consideration, and keep our reliable supply of clean and renewable sugarcane ethanol flowing into U.S. vehicles.

Increasing the cost of low carbon sugarcane biofuels by 20 cents per gallon all the while increasing transport emissions doesn’t seem like the right way to implement the RFS. If you agree with us, make sure the EPA hears your concerns.

Our Comments So Far to Environmental Regulators and Legislators

By Leticia Phillips posted Jun 20, 2013
Sugarcane ethanol producers are stepping up our profile in the debate over the Renewable Fuel Standard (RFS). We’ve been active for a while sharing vital facts about clean, advanced biofuels like sugarcane ethanol and lending our expertise and support to policymakers currently exploring the issue. Here’s a quick update on our activities so far and future plans.

As I wrote a couple weeks ago in my last post, sugarcane ethanol producers are stepping up our profile in the debate over the Renewable Fuel Standard (RFS). We’ve been active for a while sharing vital facts about clean, advanced biofuels like sugarcane ethanol and lending our expertise and support to policymakers currently exploring the issue.  Here’s a quick update on our activities so far and future plans.

Where We’ve Been: On the Record

In April, the Brazilian Sugarcane Industry Association (UNICA) submitted comments to the Environmental Protection Agency in response to their proposed RFS requirements for 2013. Our letter touches on a number of key issues, but most importantly, addresses concerns that Brazil cannot supply enough sugarcane ethanol to meet America’s needs.  On the contrary, updated harvest and export capacity estimates confirm that Brazilian sugarcane ethanol producers can meet EPA’s projections for ethanol exports to the United States.  Our comments to EPA conclude:

UNICA is confident that Brazilian sugarcane ethanol producers will be able to meet—and if necessary surpass—EPA’s projections for Brazilian sugarcane ethanol exports to the United States. Further, we believe this updated information resolves any residual uncertainty regarding Brazilian sugarcane production and ethanol production and obviates any need to reduce the statutory volume requirement for advanced biofuels as a hedge against poor production in Brazil. (Page 12)

Congress is also getting into the act, with the House Committee on Energy and Commerce releasing a series of white papers seeking input on the renewable fuel standard.

We welcomed the opportunity to answer the committee’s questions and illustrate the ways sugarcane ethanol is helping America meet RFS goals – particularly improving energy security and reducing greenhouse gas emissions. Some of the highlights from last month’s letter to Congress:

The RFS – and sugarcane ethanol in particular – works to reduce greenhouse gas emissions (GHG). As demonstrated by EPA’s own lifecycle analysis, the GHG emissions reductions associated with Brazilian sugarcane ethanol exceed the emissions thresholds for all categories of advanced biofuels included in the RFS program. Sugarcane ethanol is the most efficient biofuel produced at a commercial scale and can reduce GHG emissions by over 60% when compared to a fossil fuel baseline. (Pages 1-2)

Sugarcane ethanol helps meet advanced biofuel mandates. The Environmental Protection Agency has conducted rulemakings each year that waive significant portions of the Energy Independence and Security Act of 2007 (EISA) cellulosic ethanol mandate.  As development of commercial-scale cellulosic biofuel facilities has been slow, that volume mandate has been met with other advanced biofuels that offer comparable GHG emission reduction benefits, such as Brazilian sugarcane ethanol.  As a result, the GHG emission reduction benefits anticipated by the EISA have been achieved, even if through different paths. (Page 5)

Brazil is dedicated to the current and future success of the RFS. Our members are committed to producing increasing quantities of Brazilian sugarcane ethanol to help ensure compliance with the RFS program’s advanced biofuel mandate in the future. Brazilian sugarcane producers  have made a long-term commitment to providing clean, renewable sugarcane ethanol to meet  energy and environmental goals in Brazil and globally as evidenced by the considerable investments by major global energy companies, such as Shell, BP, Total and Petrobras, in the sugarcane industry. (Page 2)

Where We’re Going

We’re proud of the role that sugarcane ethanol plays in helping the U.S. reduce greenhouse gases. And sugarcane ethanol producers are committed to providing clean, renewable fuel for Brazil, the U.S. and the world. As the debate heats up and congressional scrutiny intensifies this summer, we will continue to highlight the benefits and stress the importance of access to clean, advanced biofuels like sugarcane ethanol.

We’ll also be keeping a close eye on RFS rulemaking coming out of EPA later this year.  We’ve seen troubling signs that the regulatory process might be misused to impose onerous, anti-competitive requirements on foreign ethanol.  More to come.

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.”

UNICA @Rio+20, be ready to commit!

By Géraldine Kutas posted Jun 19, 2012
The day we have all been waiting for has come. Over the last few months, governments have been working on a document that needs signatures of more than 130 international leaders coming to Rio from all over the world. Keeping in line with the level of ambition associated with the summit the paper is called “The Future We Want”. It is meant to commit its signatories to do their best to put the world on a more sustainable development path and ultimately a green economy.

The day we have all been waiting for has come.  

Over the last few months, governments have been working on a document that needs signatures of more than 130 international leaders coming to Rio from all over the world.

Keeping in line with the level of ambition associated with the summit the paper is called “The Future We Want”. It is meant to commit its signatories to do their best to put the world on a more sustainable development path and ultimately a green economy.

But just how much agreement governments reach should not be the only measure of success for Rio+20. At Rio, private sector and NGOs will be working in partnership across platforms to chart a path towards a more sustainable use of resources. Our commitment to each other is just as real and as binding. I’m excited that UNICA will be part of this historic moment, and we hope that what’ve learnt is a good blueprint for others.

I have previously talked on this blog about the future that UNICA wants and the urgency to take action and act responsibly.

In a world of rising energy demand, decreasing traditional energy supplies and a rapidly growing population, renewable energies are essential. And because the Brazilian experience shows that they can be an engine for economic growth there is even more good reason to hear us out. Times are tough for everyone, but if you can open up market opportunities, grow GDP and satisfy consumer demand for clean fuels, there is a solid business case. 

We’ve been preparing for Rio+20 for some time now because we see an opportunity, economic as much as environmental. We have also been actively telling our story,  and with great authority, through the "Dialogues for Sustainable Development", a UN platform for civil society participation in official discussions that has given an outstanding support to all our energy proposals. And for those of you here in Rio or those who’ll be following us from far, we plan to continue showing our commitment to a green economy and engaging with our stakeholders at a number of events this week:

On June 18th, UNICA talked about the potential of sustainable bio-energy at an event organised by the Global Bioenergy Partnership (GBEP).

On June 19th, UNICA will give a speech at the ICTSD Trade and Sustainable Development Symposium called “Enabling Climate Mitigation, Fostering Low-Carbon Growth”.

On June 20th, UNICA will take part in the World Green Summit.

On the 21st, we will venture into the Bioeconomy debate alongside Novozymes and Electrobras.

And we will round off our busy Rio schedule on June 22nd with a presentation on the opportunities and challenges for bioenergy in Brazil at a conference organised by the CNA.

Sound busy? It’s not all.

A few days ago, we unveiled our latest contribution to understanding the potential of Brazilian sugarcane. We have launched an interactive digital tool that tells the story of our industry, provides timely information about market developments, and gives an overview of prospects and future uses of sugarcane ethanol. And it’s good fun to use it.  You can also download the app on your mobile devices and connect to our facebook page.

As you all see, much of the action in Rio+20 will not just take place at the negotiating table. We invite you to follow the debate and take part in the conversation.

We hope that this conference will mark the beginning of the future we all want.  

The future we want

By Géraldine Kutas posted Apr 22, 2012
Today is Earth Day. And this year we have a number of reasons to celebrate it. Perhaps the most significant one is the chance to build the future we want. In June, the world will see Brazil hosting the largest forum ever in the history of the United Nations: Rio+20. The UN Conference on Sustainable Development represents a historic opportunity to define pathways to a more sustainable future. World leaders, along with thousands of participants from the private sector, NGOs and other groups, will come together to shape a more sustainable world where economic growth, poverty reduction, social equity and environmental protection go hand-in-hand.

Today is Earth Day.

And this year we have a number of reasons to celebrate it. Perhaps the most significant one is the chance to build the future we want.

In June, the world will see Brazil hosting the largest forum ever in the history of the United Nations: Rio+20. The UN Conference on Sustainable Development represents a historic opportunity to define pathways to a more sustainable future. World leaders, along with thousands of participants from the private sector, NGOs and other groups, will come together to shape a more sustainable world where economic growth, poverty reduction, social equity and environmental protection go hand-in-hand.

The fact is that by 2050, our planet will be a home to nine billion people. Nine billion people who will need to feed themselves and power their lives. In a world of rising energy demand, decreasing traditional fossil energy supplies and growing concerns about climate change, we all urgently need to act.

At Rio+20, the international community will seek ways to make theoretical solutions become reality. Many of those solutions already exist; the goal is to scale them up, share best practice. And here is where we at UNICA have something to say.

At a time when most countries around the world are searching for clean, commercially viable, renewable options, sugarcane has proved to be a successful alternative to reduce greenhouse gas emissions in Brazil while diversifying energy supplies and reducing our dependence on oil.

In the last decade alone, sugarcane has been the centrepiece of Brazil’s renewable energy expansion strategy, and this gives Brazil a leading role in the search for low-carbon solutions to climate change, while promoting economic growth.

All this is largely possible because of sugarcane’s unique versatility. Just look at sugarcane derived ethanol - it is an affordable transportation fuel that, compared to gasoline, reduces C02 emissions by an average of 90 percent, and diminishes local air pollution and harmful emissions. Brazil replaced almost half of its gasoline consumption with ethanol, using just 1.4% of its arable land.

Bioelectricity is another great asset. Clean electricity generated from the stalks and straw of sugarcane (bagasse) has a lower environmental impact than fossil fuel thermoelectric plants or large hydroelectric power stations.  

Sugarcane has the potential to help reshape the world energy markets, as high-tech innovation is unlocking many other uses of this plant that go beyond food, ethanol and bioelectricity, such as bioplastics, biohydrocarbons and biochemicals.

The Brazilian experience represents a successful example of what happens when private sector innovation and know-how and supportive policy go hand-in-hand. I am glad that industry will play a greater role at Rio+20, especially in helping demonstrate that many of the smart solutions we need to fight climate change already exist. We just need our governments to put in place incentive structures and enable the environment required for those solutions to grow in scale. Rio+20 gives Brazil the opportunity to lead by example - we hope that our unique journey can be a useful one for others.

The future we want is not just a mere ‘wish list’. The future we want is reflected every day through actions and decisions. We need energy to power our lives and our economies. But we no longer have to rely on fossil fuels - today we have a choice that allows us to tread lightly on the environment. On a day like today, I/we give our governments a vote of confidence and hope Rio+20 marks the difference between ‘what we say’ and ‘what we do’.

Shouldn’t every day be Earth Day?

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.

Continuing to spread the Word about Clean Solutions from Sugarcane

By Marcos Jank posted Mar 05, 2012
When we created Sugarcane.org last year, our intent was to continuously provide pertinent information for a growing audience of people who wanted to learn more about different aspects from sugarcane: products, sustainability, benefits, the Brazilian experience, global policies and much more. We wanted to let you know that we have just up-loaded additional information and materials on the website.

When we created Sugarcane.org last year, our intent was to continuously provide pertinent information for a growing audience of people who wanted to learn more about different aspects from sugarcane: products, sustainability, benefits, the Brazilian experience, global policies and much more. We wanted to let you know that we have just up-loaded additional information and materials on the website. 

Here’s a brief snapshot of the new material we would like to share with you. We hope you find it helpful.

Additional content on sustainability and benefits from sugarcane include:

  • Sustainability Certification and Reporting - Certifications of sustainable production processes have been proliferating and it’s not different for the sugar-energy sector. Certification is an important instrument to attest that a product is being produced in a sustainable way, in accordance with clearly-defined environmental, social and economic criteria.
  • Carbon Credits from Bioelectricity - Bioelectricity is eligible for Certified Emissions Reductions (CER) under the Kyoto Protocol. Bioelectricity (from sugarcane) projects represent nearly 1/3 of the renewable energy projects in Brazil’s portfolio and will receive credits of about 5 million tons of GHG by 2012.
  • Improved Public Health - The benefits of replacing fossil fuels with ethanol go beyond reducing GHG emissions. It also improves air quality and reduces the health impacts of urban pollution.

Interested in the Brazilian sugarcane experience? Here’s some new material we have picked out on this topic:

  • Impact on Brazil’s Economy - The sugarcane industry in Brazil represents an important part in the country’s economy. The sector adds US$50 billion to the country’s GDP and provides  good employment to some 1.28 million workers whose salaries rank among the highest in  Brazil’s agricultural sector. 
  • Reduced Emissions - Since the start of Brazil’s ethanol program in 1975, more than 600 million tons of carbon dioxide emissions have been avoided thanks to the use of this clean and renewable fuel. 
  • Commitment to sustainability – The Brazilian government’s comprehensive package of environmental policies is a global benchmark and can serve as a model. 
  • Fair Pricing - In 1999, an innovative and voluntary sugarcane payment system was set up to help ensure fair and equitable relationships between sugarcane growers and millers.

Lastly, we have also included an overview of sugar policy United States and the European Union under the “Global Policy” section.

We want to keep you informed of the latest developments in the sugarcane industry in the best way possible, so please feel free to send us your suggestions about new content for this website.

Once again thank you for your support and don’t forget to follow us on Twitter for latest news on clean and renewable solutions from sugarcane!

What’s possible when people have choice?

By Géraldine Kutas posted Jan 26, 2012
A lot. And the Americans will be the first to tell us. After more than three decades, the U.S. government lifted its tariff on ethanol giving the American public greater access to and an increase in environmental benefits starting in 2012. This is clearly a significant step forward, but I can’t help but think that we are missing out here in Europe?

A lot. And the Americans will be the first to tell us.

After more than three decades, the U.S. government lifted its tariff on ethanol giving the American public greater access to and an increase in environmental benefits starting in 2012. This is clearly a significant step forward, but I can’t help but think that we are missing out here in Europe?

Europe has set an ambitious environmental target in its 2020 energy legislation yet it simultaneously discriminates against a commercially viable renewable fuel that enables us to reach those same targets. Does anyone else see this paradox?

I know – and EU decision makers know too - that sugarcane ethanol reduces greenhouse gas emissions by 90 percent on average compared to ordinary fossil fuels, making it the best carbon performing biofuel produced today on a commercial scale. Since free trade is, in fact, a two way street, I should highlight that in 2010, Brazil eliminated its ethanol import tariff, undeniably increasing Brazil’s energy security. Today, Brazil hopes to encourage other countries around the world to do the same and develop free markets for clean, renewable fuels such as ethanol. I commend the United States for finally letting their import tariff expire – now I urge European citizens to make note of what European legislators owe them. To be fair, Europe isn’t alone. Big economies like China and Japan also impose an import tariff on ethanol.

Trade barriers can deprive Europeans of access to the many benefits of sugarcane ethanol. We wholeheartedly support and guarantee sustainability in the Brazilian ethanol production. Since the approval of the Bonsucro sustainability standards by the EU in July 2011, 12 mills were successfully certified within 6 months under that scheme. That’s commitment. But EU’s sustainability criteria, can act as non-tariff barriers, and their potential to limit trade in biofuels is significant.

So, what I think European consumers are missing here is choice. The choice to:

…increase relative independence on fossil fuels

…choose to power cars with a clean and renewable fuel

…cope better with high fuel prices

And ultimately to play an important role in meeting ambitious environmental targets decision makers have promised them.

It is urgent to act.

I know this won’t happen overnight, import tariffs create distortions and distortions take time to correct. But my hope for this year is that we start questioning their true merit!

We have a busy year ahead, let’s get to work and you’ll hear from me again in the coming months.

Are EU sustainability criteria for biofuels compatible with WTO rules?

By Géraldine Kutas posted Dec 12, 2011
That’s the question many of us are grappling with today. With the aim of meeting environmental goals, the European Commission is now due to finalize the very last provisions of the sustainability criteria it established two years ago in both the Renewable Energy Directive (RED) and Fuel Quality Directive. The criteria were created as a mechanism to ensure that biofuels marketed in the European Union (EU) truly help in mitigating climate change and preserving biodiversity.

That’s the question many of us are grappling with today.

With the aim of meeting environmental goals, the European Commission is now due to finalize the very last provisions of the sustainability criteria it established two years ago in both the Renewable Energy Directive (RED) and Fuel Quality Directive. The criteria were created as a mechanism to ensure that biofuels marketed in the European Union (EU) truly help in mitigating climate change and preserving biodiversity.

But recent decisions taken by the dispute settlement body of the World Trade Organization (WTO) – US — Clove Cigarettes, US — Tuna II (Mexico) and US –– COOL – could jeopardize the viability of the criteria, resulting in significant consequences for trading biofuels.

Are sustainability criteria for biofuels “discriminatory” or “unrelated to product characteristics”? This issue has been widely discussed among stakeholders, including policymakers, scientists, NGOs and academics, all with competing views.

Given the importance of sustainability criteria for the EU biofuels market, we recently co-organized a workshop with the International Centre for Trade and Sustainable Development (ICTSD) to provide a platform for experts in Brussels to discuss the legal and technical arguments around the (in)compatibility of EU sustainability criteria. That way, we could gather opinions from all sides for a constructive dialogue in light of the recent WTO jurisprudence dealing with the Agreement on Technical Barriers to Trade (TBT).

The two remaining provisions I mentioned earlier that are under consideration by the European Commission are highly contentious. Indirect Land Use Change (ILUC) is one of the most prominent examples of where incompatibility could occur since science is currently too flawed to attribute a specific ILUC impact to specific biofuels feedstock. Another example is “highly biodiverse grassland”, which clearly targets specific regions of the world. Andrew Shoyer, chairman of Sidley Austin LLP’s international trade and dispute resolution practice, advises that land-use criteria on biodiversity and any ILUC factor would be “particularly vulnerable”. And furthermore, specifically regarding ILUC, a recent EU-commissioned study by the International Food Policy Research Institute (IFPRI) concluded that many uncertainties remain surrounding the calculation of ILUC. It especially emphasized that such model cannot differentiate between direct and indirect land use emissions due to a lack of empirical evidence.

Another reason that EU sustainability standards might not be compatible with WTO rules is if they effectively discriminate between domestic and imported products based on individual production methods. Even though EU directives don’t contain a legal restriction on the imports of biofuels, in practice they can affect its marketability resulting in de facto discrimination. That means Brazilian biofuels – despite their proven outstanding environmental benefits – potentially could be limited in accessing the European market – a market which developed these rules explicitly to benefit from GHG-reducing fuels. There is a hint of paradox here.

What I know for sure is that we have more questions than answers on the table. In fact, this was also the outcome of our event. Let’s not rush into this. With all the uncertainty still to be clarified, I hope EU policymakers will take the time to carefully analyze cases affected by the TBT and the GATT agreements. The consequences could be detrimental for biofuels and many other renewable energy sources if they get this wrong. At UNICA we welcome all efforts to address climate change, and are convinced that a thoughtful decision that meets environmental objectives and is compatible with the WTO can be reached.

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

Sugar - the sweet spot of an EU-Mercosur trade deal

Not including sugarcane products in the Mercosur negotiations could jeopardise one of the most beneficial trade deals for the EU

Read on

OLDER POSTS

 
Site Map
About Us Privacy Policy
News