EU-Mercosur trade agreement includes ethanol provisions
The new EU-Mercosur trade agreement reduces ethanol duties, opening quotas for 450,000 metric tons for the chemical industry and 200,000 metric tons for fuel. While the agreement benefits Mercosur countries, ePURE criticizes it for threatening EU ethanol investments and energy security. UNICA, the Brazilian sugarcane industry association, supports the deal, citing growth potential for Brazil’s bioenergy sector.
December 10, 2024
BY Erin Voegele
The European Union and Mercosur, a South American trade bloc consisting of Argentina, Brazil, Paraguay and Uruguay, on Dec. 5 finalized negotiations on a new trade agreement. The agreement could increase the volume of ethanol imported into the EU.
A fact sheet published by the European Commission indicates the agreement includes an ethanol duty reduction, which aims to support EU job creation. According to the fact sheet, a duty-free quota of 450,000 metric tons of ethanol will be opened for ethanol, to be used by the chemical industry. A quota of 200,000 metric tons of ethanol will be opened for all other uses, to be phased in gradually over five years. That volume can be used for the fuel segment of the market, which represents the largest component of EU ethanol consumption. The EU noted that 4 million metric tons of the 6 million metric tons of ethanol consumed annually in Europe is used as fuel.
ePURE, the European renewable ethanol association, is calling the agreement a “bad deal for the EU renewable ethanol sector, for European farmers and for Europe’s drive for strategic industrial and agricultural autonomy.”
ePURE said the agreement offers a huge share of the EU’s ethanol market to Mercosur countries, with the trade group estimating that share to be equal to 12% of total EU production capacity. ePURe also notes that the EU ethanol market is not growing and is already fully open to imports from many other countries. In addition to the ethanol provisions of the new trade agreement, ePURE is also criticizing the EU for its policy decisions that have restrained ethanol consumption and production.
“Beyond threatening our investments and thousands of jobs mostly in rural areas, this agreement with Mercosur is undermining EU energy dependency and food security, as well as our ability to decarbonize sectors such as aviation, maritime and the chemical industry,” ePURE said in a statement. “Before the agreement materializes, the EU has some years ahead to revert the trend, put together a coherent visionary plan to give EU producers the means to compete with Mercosur on equal footing.”
UNICA, the Brazilian sugarcane industry association, has spoken out in support of the trade agreement, noting it opens new opportunities for the sugar and bioenergy agroindustries.
“This pact will allow Brazil to expand its presence in the European market, with significant potential for diversifying exports and increasing the competitiveness of the sugar-energy sector, which remains committed to sustainable production and a low-carbon economy,” UNICA said in a statement.
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Source : Ethanol Producer Magzine
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