ePURE examines U.S. ethanol imports, questions fair trade

By Holly Jessen | January 12, 2011

While it has not yet reached the formal investigation stage, ePURE, the European Producers Union of Renewable Ethanol, is examining U.S. trade practices for exporting U.S. ethanol to the EU. The organization is looking into whether U.S. ethanol is benefiting from the U.S. Volumetric Ethanol Excise Tax Credit, or the 45 cents a gallon blenders credit, and then entering the EU, something ePURE feels is a violation of subsidy rules and shouldn’t be allowed. “If we find the evidence that this trade continues then we feel that the [European] Commission should investigate and take appropriate measures,” Rob Vierhout, secretary general of ePURE, told EPM.

VEETC was created to benefit the American domestic market, he said. American taxpayers are paying for it. “It should not be used for increasing competition in the outside world,” he said.

Right now ePURE is in the data gathering stage. If the organization does decide to take the issue to the European commission it will need a large amount of statistical information and will need a large percentage of the EU ethanol industry, supporting its stance that U.S. trade practices are harmful. “It cannot be one company, one country,” he said.

Even if ePURE does go through with filing a complaint with the European Commission there’s no guarantee it will reach the formal investigation phase. It is up to the European Commission to decide if a strong enough case was presented to move forward. If that happens, it could take several months to reach a conclusion, Vierhout said. The result could be one of three things: that U.S. trade practices did cause injury to the EU ethanol industry; that there was harm, but not enough; or that there is no case.

In addition, ePURE is also examining two customs procedural issues that it feels should be clarified and applied the same way in all EU countries. The first has to do with whether E90 is classified as a chemical or ethanol. “We believe that the classification rules should be applied in the way they are written, that means that these kinds of blends should be classified as ethanol,” he said.

In some EU countries, E90 is classified as a chemical, giving the product an edge financially. Undenatured ethanol has an import duty of $248.52 a cubic meter and denatured ethanol has an import duty of $132 a cubic meter. If classified as a chemical, however, E90 enters the EU with a duty rate of only 6.5 percent of the total value, or about $38.83 a cubic meter. Although ePURE doesn’t believe the current rules allow for classifying E90 as a chemical, the organization does feel the rules should be rewritten with greater clarity.

Another concern is that E90 is being blended with E100 until the hydrocarbon content is lowered to perhaps 1 percent, Vierhout said. Some customs consider that product undenatured ethanol, which is suitable for human consumption. Ethanol intended for human consumption has been found contaminated with hydrocarbons in some EU markets. This is also a customs procedural issue, he explained.