In response to media reports that Brazil’s government plans to increase its subsidy of sugarcane ethanol by providing $38 billion in financing to spur that country’s lagging production, Growth Energy pointed out that the American ethanol industry is no longer receiving the Volumetric Ethanol Excise Tax Credit, or ‘blender’s tax credit,’ from the U.S. government nor the benefit of a tariff against ethanol imports from Brazil. Both the VEETC and the import tariff expired at the end of last year.
“The American ethanol industry voluntarily gave up its tax incentives and the import tariff against Brazil, even though Brazil continues to have a tariff on the books and is pumping $38 billion toward propping up their industry. This shows the danger of unilaterally disarming, because it means that American ethanol producers are not competing just against Brazilian ethanol producers – but against the Brazilian government as well,” said Tom Buis, CEO of Growth Energy. “The U.S. unilateral disarmed at a time when Brazil is not just continuing to subsidize its industry, but is increasing its investment in a plan to undermine our domestic ethanol industry. This is a direct assault on the only American-made alternative we have to foreign energy.”