U.S. targets Brazil’s aviation biofuel program amid ethanol tensions
The USTR will hold a public hearing next week as part of a Section 301 probe into Brazil’s trade practices, with U.S. corn producers urging action over Brazil’s ethanol and SAF policies. The NCGA wants trade retaliation, a U.S.–Brazil emissions-modeling group, and restrictions on Brazilian ethanol under the RFS.
The Office of the United States Trade Representative (USTR) will hold a public hearing next Wednesday at the U.S. International Trade Commission in Washington as part of its ongoing investigation into whether Brazil’s actions, policies, and practices are unjustifiable or discriminatory and burden or restrict U.S. commerce.
The Section 301 investigation—under which the U.S. can impose trade sanctions on foreign partners—may conclude within six months to a year, aligning with Brazil’s 2026 election calendar. In Brasília, government officials are convinced that tensions with the U.S. will persist through next year and could escalate further.
Some American business groups are using the investigation to increase pressure on Brazil. The American Iron and Steel Institute (AISI), for instance, urged the Trump administration to intervene in a deal in which Anglo American is selling its nickel operations in Brazil to Chinese miner MMG, arguing the transaction would give China even greater control over global reserves of critical minerals.
Meanwhile, the National Corn Growers Association (NCGA) is urging the USTR not only to demand compensation from Brazil for alleged losses in U.S. ethanol exports, but also to take aim at another perceived “threat”: Brazil’s sustainable aviation fuel (SAF) program.
Ethanol has become a fixation for Donald Trump when discussing trade with Brazil and holds major political importance for Republicans. When Mr. Trump issued his executive order to prepare retaliation tariffs at the start of his administration, Brazil was the first country mentioned, and ethanol was the first product.
U.S. corn producers broadly argue that Brazil’s rapid agricultural expansion in recent years has been “partly driven by protectionist advantages and decades of neglect regarding deforestation” in the Amazon and the Cerrado, enabling Brazil to seize market share from American farmers.
Now, “on top of all that,” they view Brazil as a “serious threat” to the long-term competitiveness of U.S. exports in the emerging SAF market, which is seen as key to the global aviation industry’s goal of achieving net-zero emissions by 2050. Brazil is viewed as a major potential supplier of the renewable fuel, which can be produced through various technologies.
In 2024, Brazil launched its National Sustainable Aviation Fuel Program (ProBioQAV) to promote SAF adoption in its energy mix. Airlines are required to increase SAF use by 1 percentage point annually until reaching 10% in 2036.
One U.S. complaint is that Brazil uses a carbon-neutral emissions model that assigns a premium to the lifecycle assessment of feedstocks from multiple crop cycles (main and second harvest) grown on formerly “degraded” pastureland. NCGA says this naturally favors Brazil’s double-cropping of soybeans and corn while devaluing the lifecycle profile of the U.S. single-crop corn system.
“Most concerning,” the group added, is that “unfortunately” Brazil has emerged as a central player in international standard-setting bodies for biofuels, such as the International Civil Aviation Organization (ICAO) and the International Maritime Organization (IMO).
As an example, they noted that earlier this year, ICAO’s Committee on Aviation Environmental Protection (CAEP) approved a recommendation on multi-cropping based on the Brazilian model. The U.S. State Department objected, claiming the recommendation would “unfairly penalize” American farmers to Brazil’s benefit in global markets.
U.S. producers fear that as international bodies and foreign markets—such as Japan and the European Union—begin to accept Brazil’s sustainability claims related to its multi-cropping systems, U.S. export competitiveness could be severely impacted. They warn of potential declines in the commercial value of American agricultural production and farmland, lost export revenue, reduced profits, and higher financing costs and risks for U.S. farmers and ethanol producers.
“That’s why the U.S. State Department raised objections with ICAO,” NCGA said. “The USTR should join the State Department’s efforts to address Brazil’s troubling influence in these international markets.”
The NCGA is proposing the creation of a U.S.-Brazil working group 90 days after the USTR’s investigation, aimed specifically at addressing emissions modeling in international forums. The goal would be to “eliminate the unjust and scientifically unfounded burden that Brazil’s model imposes on the competitiveness of U.S. exports.”
It also called on the USTR to work with government counterparts to “ban the use of Brazilian ethanol” in the U.S. Renewable Fuel Standard (RFS) program until U.S. producers gain reciprocal access to Brazil’s RenovaBio program. Mr. Trump has already cut tax incentives for renewable energy and limited SAF benefits exclusively to producers and feedstocks from North America, where SAF is primarily made from corn ethanol.
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Source : Valor International
