Fostering a Friendship

Will the US, Brazil working agreement on aviation biofuels bring an end to tariffs?
By Kris Bevill | April 15, 2011

In March, President Barack Obama travelled to Brazil to meet with the country’s new president, Dilma Rousseff, and discuss a continued strategic partnership between the two nations to increase Brazil’s use of clean energy, including biofuels. During the visit, the pair announced an expanded memorandum of understanding to advance the development of aviation biofuels. Marcos Jank, president and CEO of Brazil’s sugarcane industry association (UNICA) says several companies are developing jet fuels from sugarcane and interest from the U.S. in those fuels could in turn result in an elimination of the ethanol import tariff.

“Even avid supporters of heavy subsidies and steep tariffs that prevent Brazilian ethanol from entering the U.S. market competitively are now openly discussing what happens next, both in terms of technologies and policy,” he says. “Without admitting it, they’re in fact recognizing that the current situation can’t last much longer because it works against everyone’s best interests.”

Jose Sergio Gabrielli de Azevedo, president and CEO of integrated energy firm Petrobras, a partner on several cellulosic ethanol projects including one with U.S.-based KL Energy Corp., says the attention being given by Obama to the relationship with Brazil is positive for the energy sector. “The U.S. government is now starting to consider the strategic value of this relationship among businesses, one which is currently only taking place on a commercial, market basis,” he recently stated. “New channels and mechanisms are needed to assess and facilitate this relationship.” 

—Kris Bevill