Legislation Would Require Most Vehicles to Be Flex Fuel by 2015

In other ethanol-related legislation, the Imported Ethanol Parity Act (S. 622) was recently introduced by Senators Feinstein (D-CA), Gregg (R-NH), Bingaman (D-NM), Collins (R-ME), Cantwell (D-WA), and Martinez (R-FL). The bill would lower the U.S. tariff on imported ethanol to achieve parity with the current subsidy for domestically produced ethanol ($0.45 per gallon). The bill would give greater access to the U.S. market for Brazil’s ethanol industry. Brazil’s ethanol is produced from sugar-cane, and its long growing seasons and high productivity per hectare makes it cheaper to produce than U.S. corn-based ethanol. Senator Feinstein said, “The current real trade barrier on sugar-based ethanol imported from Brazil and other foreign sources gives gasoline imports a competitive advantage. This legislation provides a sensible policy fix. It lowers the tariffs on imported ethanol to a level at or below the 45 cent ethanol blender credit – while ensuring that foreign ethanol suppliers neither benefit from the ethanol subsidy nor are penalized by artificial barriers to trade.” According to Brazilian news sources, U.S. agriculture giant Archer Daniels Midland (ADM) has been looking into investing in the Brazilian ethanol industry, possibly purchasing the Unialco group among other assets.