Lawmakers urge reduction of European ethanol tariffs

By Erin Voegele | March 23, 2016

On March 21, nine members of the U.S. of Representatives sent a letter to U.S. Trade Ambassador Michael Froman, urging him to examine opportunities to reduce tariffs on U.S.-produced energy, including ethanol, during the Transatlantic Trade and Investment Partnership (T-TIP) negotiations.

In the letter, the representatives said the “U.S. ethanol industry has been unfairly targeted by the EU for increased duties which have subsequently eliminated U.S. share in the European market. These duties of $83.20 per metric ton were imposed following an antidumping action, which continues to be challenged by the industry at the international level, and only serve as a punitive measure on a U.S. energy source. Currently, Europe cannot adequately produce enough volume for their own market without importing ethanol from foreign sources, such as the U.S.”

Within the letter, the members of Congress express confidence that Froman can leverage access to all domestic energy sources, including U.S. natural gas, crude and ethanol in order to achieve a favorable outcome for these industries and reduce or eliminate trade obstacles to market access in Europe. In addition to benefiting constituents, the representatives said additional access to European markets can assist U.S. friends and allies by providing cleaner energy sources and decreasing dependence on Russian natural gas.

“At a time when farmers are struggling to cope with a volatile price of corn, having additional markets and demands for U.S. produced ethanol would be a welcome outlet for our corn commodity yields,” wrote the representatives in the letter. “Additionally, increasing worldwide demand for ethanol has created a significant number of good-paying jobs.”

Bob Dinneen, president and CEO of the Renewable Fuels Association, has spoken out to thank the lawmakers for issuing the letter. “The duties imposed were unjustified and blatantly protectionist,” he said. “Sadly, the real losers in this are European consumers that have to pay more for motor fuel because the lowest-cost liquid fuel in the world—U.S. ethanol—has been targeted by their protectionist policy. Since Europe cannot produce sufficient domestic ethanol supply, and must import the fuel from foreign sources, including the U.S., it is time to see the duties removed.”

“The European Commission began an ethanol antidumping investigation in October 2011 in response to a complaint lodged by European ethanol trade group ePURE,” Dinneen added. “In May 2013, RFA and Growth Energy filed a complaint with the General Court in Luxembourg, challenging the Commission’s decision to impose a 9.6 percent antidumping duty on all ethanol imported from the United States. The challenge is still being litigated.”

“Despite repeated requests, the U.S. Trade Representative’s Office has so far declined to file a complaint with the World Trade Organization challenging the legality of the duties,” Dinneen said.

The letter was signed by Reps. Rod Blum, R-Iowa; Collin Peterson, D-Minn.; Rodney Davis, R-Ill.; Steve King, R-Iowa; Tom Emmer, R-Minn.; Tim Walz, D-Minn; David Young, R-Iowa; Brad Ashford, D-Neb.; and Dave Loebsack, D-Iowa. A full copy of the letter can be downloaded from the RFA website.