Brazilian sugarcane group calls on Congress to end ethanol tax credits

The Obama administration's decision to increase ethanol limits for newer vehicles has prompted the Brazilian Sugarcane Industry Association (UNICA) to call for an end to tax credits used by domestic companies. 

"Many U.S. ethanol groups have argued recently that after 30 years of tax credits and trade protections 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," said UNICA chief representative in North America Joel Velasco, in prepared remarks. 

The Environmental Protection Agency on Wednesday announced that it would allow 15 percent ethanol blends for certain vehicles made in or after 2007, an increase from the current 10 percent blend already approved for all vehicles. How that decision will affect the marketplace is unknown since it affects a narrow type of vehicle.

Velasco urged Congress to allow the $6 billion in annual tax credits to expire and lower trade barriers so other ethanol products can enter the U.S. market. 

"Allowing other alternative fuels like sugarcane ethanol to compete fairly in the U.S. would save American consumers money at the pump, cut dependence on Middle East oil and improve the environment," he said. 

Brazil blends ethanol that is primarily sugarcane with gasoline at 25 percent concentrations. Velasco claims the fuel is less expensive and cuts greenhouse gases more sharply than other ethanol options.