Brazil wants help lifting US ethanol tariffs

The Associated Press
Published: March 16, 2009

NEW YORK: Brazil's President Luiz Inacio Lula da Silva on Friday implored American businessmen to help convince the United States to lift the 53-cent-per-gallon import tariff it places on his country's ethanol fuel.
Speaking at a Wall Street Journal-sponsored investor forum Monday, Silva defended the gasoline alternative as a cheap and easy way to end dependence on foreign oil and help reduce global poverty.
"I've spoken (about the tariffs) so many times with President Bush and certainly I will speak about it many times with President Obama," Silva said. "That's why I'm asking for your help."
Brazil is a world leader in biofuels and the world's largest exporter of ethanol.
But Silva, who met with President Barack Obama on Saturday, has made little progress persuading the U.S. to reduce the tariffs, which are in place to protect American farmers who make ethanol from corn. Brazil makes ethanol from sugar, in a process that is much more efficient and costs less.

"One thing that leaves me perplexed, is in the same world where we invest in environmental policy capable of avoiding global warming ... many countries still don't place any tariff on polluting fuels while they place absurd tariffs on ethanol," Silva said, pointing out the ethanol burns relatively cleanly compared to gasoline.
During the presidential elections, Obama supported subsidies for the Midwest-based ethanol industry.
That support is widely considered a factor in his victory at the Iowa cauceses which boosted his early prospects during the primary. It also contributed to his victory in the general elections against John McCain, who opposed the subsidies.
In Brazil, all gasoline is blended with 25 percent ethanol and so-called "flex-fuel" cars can run on either the gasoline-alcohol mix or pure ethanol available at about 35,000 filling stations across Brazil.
About 23 percent of Brazil's automotive fleet is now "flex-fuel."
Silva also defended biofuels as a way to fight poverty, pointing out that while drilling for oil requires expensive investment, planting sugar cane is cheap and easy for small producers in tropical countries from Brazil to Africa.
Biofuels are one of Silva's personal passions. He has touted them during meeting with world leaders, including with Pope Benedict XVI.
He added that he didn't especially need to defend ethanol because Brazil is now flush with oil after major discoveries in the ultra-deep "pre-salt" layer off the coast of Rio and Sao Paulo.
He said the first barrels of oil from the find some 6,000 meters (20,000 feet) below the sea and ocean floor would begin being produced on May 1.