RFA protests Brazil’s 25% tariff on imported ethanol

In Washington, the Renewable Fuels Agency has written to the US Trade Representative to investigate the recent move by Brazilian state Sao Paolo to impose a 25% import duty on all imported ethanol. The Port of Santos in Sao Paolo received 400 million gallons of ethanol from the US in 2011.

“Because ethanol produced in Sao Paulo is tax exempt, ethanol imported into Sao Paulo from the United States and other areas is at a substantial economic disadvantage,” wrote RFA President and CEO Bob Dinneen.  “We believe this action is discriminatory and may severely—and immediately—restrict the exportation of U.S. ethanol to Brazil.”

In a statement, UNICA countered that the tax, known as ICMS, is not new or is it a burden. The ICMS on imported anhydrous ethanol is collected at the port of entry when the product clears customs, and a credit in the same amount is granted to the importer, UNICA said in statement. At any time, the importer can recover the ICMS paid earlier, it said.