SAO PAULO, BRAZIL — Brazil has temporarily suspended its import tax on ethanol as of March 23 until the end of 2022, officials with the Economy Ministry said.
The government said the move will help with rising fuel prices, and as a result help high domestic inflation.
Most cars in the country are flex fuel, which means they can either use gasoline or hydrated ethanol. Brazil also has a mandatory blend of 25% to 27% anhydrous ethanol in gasoline.
Brazil sources 60% of its ethanol imports from the United States.
Leaders of the US Grains Council, Growth Energy and the Renewable Fuels Association said they were pleased to see the temporary elimination of the 18% tariff.
“This is an issue we have been working on for a number of years in meetings and correspondence with officials from Washington to Brasilia,” the groups said. “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 US 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. 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.”