WASHINGTON, D.C., U.S. — Brazil raised the quota on U.S. ethanol imports under the tariff rate quote (TRQ) up from 600 million liters per year to nearly 750 million liters per year. The TRQ regulates the threshold of ethanol that can be imported into Brazil without triggering a 20% tariff.

U.S. grain and ethanol organizations were disappointed by the country’s decision to raise the quota.

“We are very disappointed Brazil did not fully consider the vast information we and the U.S. government provided them showing the detrimental and negative impact this TRQ has on Brazilian consumers by raising prices at the pump,” said Ryan LeGrand, president and chief executive officer of the U.S. Grains Council (USGC). “We will actively encourage review of this policy, which inhibits trade between our countries and hinders the development of a robust global ethanol marketplace. Free and reciprocal fair trade between the world’s two largest ethanol producers should be a model for other countries to follow. Instead Brazil is showing other countries a path to construct barriers to trade, which will hurt all consumers in the short, medium and long terms.”

Growth Energy, a U.S. biofuel trade association, wants to keep a conversation in the forefront about trade between the two countries. 

“We appreciate the U.S. government’s efforts to raise the TRQ, however we are disappointed that Brazil did not remove their tariff completely to allow a fully open market,” said Emily Skor, CEO of Growth Energy. “Brazilian ethanol continues to have virtual tariff-free access to the U.S. and puts U.S. ethanol producers at a disadvantage at a time when they need it most. We will continue working with U.S. government officials, the Brazilian government, and our allies to truly open the ethanol market and build a strong trade relationship for decades to come.”

The Renewable Fuels Association (RFA) believes the tariff does not aid fuel prices in Brazil but hampers it.

“Brazil’s decision to maintain its protectionist trade barrier against U.S. ethanol is extremely disappointing and represents a major setback in our relationship with the Brazilian sugar and ethanol industry,” said Geoff Cooper, president and CEO of RFA. “The token increase in the quota does nothing to provide relief to Brazilian consumers who face higher fuel prices because of Brazil’s discriminatory policy.

“Not only is the U.S. market wide open to ethanol imports from Brazil, but our Renewable Fuel Standard actually incentivizes imports by characterizing sugarcane ethanol as an advanced biofuel. But there is nothing ‘advanced’ at all about the unfair and unlevel playing field created by Brazilian trade barriers. In light of Brazil’s action, it may be time for U.S. policymakers to reconsider our open-door trade policy regarding sugarcane ethanol.”