Opinion: Tripled U.S. ethanol exports and Brazil
That is the same situation as the ethanol industry. Government assistance helped get the business off the ground, and now it is time for government assistance to end. Large corporations are making good money by exporting and supplying the U.S. need for ethanol, too.
It should be noted that the U.S. ethanol exports being reported did not qualify for the ethanol blender’s tax credit, as the ethanol was not blended with gasoline prior to export.
Cooper talks about the “ethanol shuffle” in that certain U.S. laws encourage Brazil to send its ethanol production to the U.S. while Brazil imports U.S. ethanol into its market. The South American country has continuously been in the world news because it is requiring high percentages of ethanol in fuels.
An explanation of the ethanol shuffle as provided by the RFA is provided here. “The heart of the issue is how both the U.S. Environmental Protection Agency (EPA) and the California Air Resources Board (CARB) are calculating carbon emissions for corn-based ethanol and Brazilian sugar ethanol. Under both the federal Renewable Fuel Standard and the California Low Carbon Fuels Standard (LCFS), the carbon footprint of Brazilian-based sugar ethanol is deemed far superior to corn-based ethanol. This results in a growing incentive for imports of ethanol from Brazil to meet increasingly aggressive carbon standards. At the same time, a struggling Brazilian ethanol industry cannot meet its own domestic demand. As such, Brazilian ethanol producers are finding it more valuable to export their product to America (and the carbon emissions that go with ocean transport) and import growing volumes of U.S. ethanol (and the same carbon emissions).”
As a side note, distillers dried grains and solubles (DDGS), with known November totals calculated, indicates DDGS exports for the entire year of 2011 will be 7.72 million tons, which would be down 14 percent from 2010’s export total of 9.03 million tons.