Brazil eliminates tariffs on ethanol through the end of 2022

By Erin Voegele | March 22, 2022

Brazil’s Ministry of Economy on March 21 announced that the country will waive its import tariff on several products, including ethanol, through the end of 2022. The ethanol tariff was previously set at 18 percent.

The government said the tariff reductions aim to alleviate inflationary pressures resulting from the pandemic, which have been further aggravated by the conflict between Russia and Ukraine.

The reduction applies to undenatured ethyl alcohol of an alcoholic strength by volume of 80 percent or more with a water content of 1 percent or less.

This is the second time in recent months the Brazilian government has reduced its tariff on ethanol imports. In November 2021 the country enacted a unilateral 10 percent reduction of import tariffs on 87 percent of all goods and services through the end of 2022, including ethanol. At that time, the ethanol tariff was reduced from 20 percent to 18 percent.  

Geoff Cooper, president and CEO of the Renewable Fuels Association; Ryan LeGrand, president and CEO of the U.S. Grains Council; and Emily Skor, CEO of Growth Energy, issued a joint statement welcoming Brazil’s suspension of the ethanol tariff. “We are pleased to see the temporary elimination of the 18 percent tariff, which should improve access for Brazil’s ethanol consumers as well as help meet its own decarbonization goals,” the group said. “This is an issue we have been working on for a number of years in meetings and correspondence with officials from Washington to Brasilia.

“We welcome this decision and see it as an opportunity to continue discussions with Brazil to expand the global use of low-carbon ethanol, reduce barriers to trade and elevate its prominence in energy discussions. Our hope is that with this action, Brazil and the U.S. will share with third parties the vision of free and open global ethanol markets.

“We will continue to pursue a long-term, open and mutually beneficial ethanol trading relationship with Brazil as we work to make this temporary reduction permanent,” they continued. “We look forward to continuing to work closely with USDA and USTR to return to a fair and reciprocal trading relationship with Brazil regarding ethanol."

The Iowa Renewable Fuels Association is also applauding Brazil for embracing biofuels as a way to reduce fuel prices. “If American-made biofuels can lower prices at the pump for drivers across the world, it would be an absolute shame to not do all we can to ensure biofuels are saving drivers money right here at home,” said Monte Shaw, executive director of the IRFA. “President Biden has an opportunity to lead the way to lower fuel prices by unleashing the power of higher biofuel blends like E15. Iowa biofuel producers are excited for this new market opportunity in Brazil but would also love to see more of our fuel used here in the U.S. Given the current fuel crisis, President Biden should immediately direct the EPA to use their emergency power to ensure E15 can continue to be sold throughout the summer months. Without action before May 1, Iowans and Americans across the country will lose the ability to purchase E15, which often sells for 10 to 30 cents less per gallon than regular unleaded."