Florida Governor Crist calls for reduction of Brazilian ethanol tariff

In Brazil, Florida governor Charlie Crist said that he opposed the Brazilian ethanol tariff and would lobby the state’s Congressional delegation to reduce it.  The 54 cent per gallon tariff is scheduled to expire in 2009, and Crist warned that it was unlikely that the tariff would be repealed in 2008 due to the US Presidential elections.

Recently, the UN Dispatch reported comments by the head of the Global Bioenergy Partnership that trade in biofuels and biofuel feedstocks is too low. The report says that European and US subsidies for domestic production and tariffs for imported feedstocks and biofuels are reducing biofuel production in tropical and subtropical climates, where biomass productivity is significantly higher.

In Washington, Sen. Chuck Grassley is leading an effort to close a loophole allowing oil companies to circumvent the tariff on Brazilian ethanol. The loophole allows oil companies to receive a rebate of taxes paid on importing Brazilian ethanol when they export jet fuel. More than 434 million gallons of Brazilian ethanol were imported into the United States last year. “It’s nonsensical to say ethanol is the same as jet fuel,” Sen. Charles Grassley, R-Ia. “The (drawback) law makes no sense.”

The tariff is designed to offset the 51-cent per gallon credit given for each gallon of ethanol blended with gasoline, regardless of where the ethanol is produced. Otherwise, say supporters of the tariff, US taxpayers would be subsidizing the Brazilian ethanol industry with the excise tax credit.

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