Brazilian Sugarcane Industry Reacts To US Ethanol Subsidy

A spokesman for Brazilian ethanol maker Unica responded to the US Environmental Protection Agency's recent decision approving a 15 percent blend for ethanol with regular unleaded gasoline by suggesting that such approval should trigger an end to the 45-cent-per-gallon subsidy for blenders of ethanol in the US.

Joel Velasco of the Brazilian Sugarcane Industry Association said "many U.S. ethanol groups have argued recently that after 30 years of tax credits and trade protection they are ready to compete without subsidies provided the government grants them greater access to America's fuel pumps. With the EPA's decision to increase ethanol limits by 50 percent for newer vehicles, that day has arrived."

The 45-cent subsidy for American ethanol blenders expires at the end of 2010, and US ethanol producers are sweating the extension in Congress.

Brazil does not subsidize its sugarcane-fed ethanol industry. It also allows blends of up to 25 percent in motor vehicles.

(Source: DesMoinesRegister.com)