Brazilian government works to re-classify ethanol as a global fuel commodity
The development of an export-oriented biofuels and bioenergy industry in the Global South offers a chance to lift millions of people out of poverty and to achieve social and economic development in the poorest countries. A precondition for this to succeed, is that importing countries (US/EU/Japan) lower their unfair trade barriers and subsidies.
Earlier we reported that competitive ethanol made in the developing world is facing all kinds of trade barriers and has to compete with biofuels made in the North that can only surive because of massive subsidies and protectionist measures. Corn-based ethanol or soy-based biodiesel made in the US -- uncompetitive biofuels with a very low energy balance and with virtually no potential to reduce GHG emissions -- would never survive without the hundreds of subsidies they receive today. A recent report by the Global Subsidies Initiative showed that these subsidies for uncompetitive biofuels ('lobby-fuels') cost US taxpayers billions each year (earlier post).
When it comes to unfair trade barriers, the US imposes a lofty 54-cent-per-gallon duty on direct ethanol imports, as well as a 2.5% ad valorum tariff. The EU, expected to be Brazil's top purchaser of ethanol next year, imposes a tariff of €10.2 per every 100 liters for denatured alcohol, and a tariff of €19.2 per 100 liters for undenatured alcohol.
Nobel-prize winning economist Joseph Stiglitz uses precisely this example to show how the West is failing to make a credible case when it comes to building a more fair and balanced world trade regime; the West is blocking a commodity that can bring economic prosperity to millions in the South, Stiglitz argues (earlier post). So biofuels are a crux when it comes to the creation of a new global trade arena. Some people have even gone so far as to suggest that negotiations on the role of biofuels in international trade might be the key to revive the deadlocked WTO Doha Development Round (earlier post). Finally, the chief of the International Energy Agency, Claude Mandil, likewise thinks that the EU and the US must get serious and import biofuels from the South, where their production actually makes sense (earlier post).
Currently, there is a lot of debate on how biofuels should be classified in the future and on what kind of products they really are under the current global trade rules. Are the green fuels and their feedstocks agricultural, industrial or environmental goods? Or a combination of both that warrants a new form of classification? And what kind of mechanisms and negotiation strategies are there to limit importers to impose protectionist measures? A report by the International Food & Agricultural Trade Policy Council (IPC) on international biofuels trade issues -- WTO Disciplines and Biofuels: Opportunities and Constraints in the Creation of a Global Marketplace [*pdf] -- addresses precisely these questions and offers some pointers as to the effects of different forms of classification (earlier post).
Now the Brazilian government itself is getting involved in the debate. Hoping to lower global trade barriers on ethanol, it has set its sights on re-classifying the renewable fuel in the international trade arena as a fuel commodity rather than an agricultural commodity, a spokesman at Brazil's Foreign Ministry confirms:
ethanol :: biodiesel :: biofuels :: energy :: sustainability :: trade :: subsidies :: trade barriers :: Doha :: WTO :: Brazil ::
"There have been a series of consultations and discussions in the government about this, and it's in our internal plan," said the spokesman in a phone interview with Dow Jones Newswires. "But it's premature to talk about a schedule for when this might happen." The country's Agricultural, Mines & Energy, Chief of Staff, and Trade ministries are also involved in this discussion, he added.
Brazil - the world's top ethanol exporter as well as its lowest-cost producer - would benefit immensely from lowered trade tariffs on the biofuel. However, the country's ethanol is subject to high import duties in several key trading partners, due in part to a formidable system of tariffs already imposed on agricultural products.
If ethanol were considered an energy commodity, then it could receive the same treatment as petroleum, said Celso Amorim, the country's Foreign Trade Minister last month.
"No one, if it's not for fiscal reasons, and this occurs in few cases, places a tariff on petroleum imports, because that would penalize the whole productive process of the country," he added.
The office of Brazil's Chief of Staff is also a supporter of re-classifying ethanol under the fuel category, according to a report in local business daily Gazeta Mercantil published Monday.
The U.S., the top buyer of Brazilian ethanol this year, imposes a lofty 54-cent-per-gallon duty on direct ethanol imports, as well as a 2.5% ad valorum tariff.
The E.U., expected to be Brazil's top purchaser of ethanol next year, imposes a tariff of 10.2 euros per every 100 liters for denatured alcohol, and a tariff of EUR19.2 per 100 liters for undenatured alcohol. Both types of alcohol can be used for biofuel production.
In the first half of this year, a new bureau of energy was created within the Foreign Ministry to direct Brazil's energy strategies in both the bilateral and multilateral arenas, added the Foreign Ministry spokesman.
Brazil is the world's leading sugar producer and exporter. It is also the world's No. 2 ethanol producer after the U.S.
Article continues
Earlier we reported that competitive ethanol made in the developing world is facing all kinds of trade barriers and has to compete with biofuels made in the North that can only surive because of massive subsidies and protectionist measures. Corn-based ethanol or soy-based biodiesel made in the US -- uncompetitive biofuels with a very low energy balance and with virtually no potential to reduce GHG emissions -- would never survive without the hundreds of subsidies they receive today. A recent report by the Global Subsidies Initiative showed that these subsidies for uncompetitive biofuels ('lobby-fuels') cost US taxpayers billions each year (earlier post).
When it comes to unfair trade barriers, the US imposes a lofty 54-cent-per-gallon duty on direct ethanol imports, as well as a 2.5% ad valorum tariff. The EU, expected to be Brazil's top purchaser of ethanol next year, imposes a tariff of €10.2 per every 100 liters for denatured alcohol, and a tariff of €19.2 per 100 liters for undenatured alcohol.
Nobel-prize winning economist Joseph Stiglitz uses precisely this example to show how the West is failing to make a credible case when it comes to building a more fair and balanced world trade regime; the West is blocking a commodity that can bring economic prosperity to millions in the South, Stiglitz argues (earlier post). So biofuels are a crux when it comes to the creation of a new global trade arena. Some people have even gone so far as to suggest that negotiations on the role of biofuels in international trade might be the key to revive the deadlocked WTO Doha Development Round (earlier post). Finally, the chief of the International Energy Agency, Claude Mandil, likewise thinks that the EU and the US must get serious and import biofuels from the South, where their production actually makes sense (earlier post).
Currently, there is a lot of debate on how biofuels should be classified in the future and on what kind of products they really are under the current global trade rules. Are the green fuels and their feedstocks agricultural, industrial or environmental goods? Or a combination of both that warrants a new form of classification? And what kind of mechanisms and negotiation strategies are there to limit importers to impose protectionist measures? A report by the International Food & Agricultural Trade Policy Council (IPC) on international biofuels trade issues -- WTO Disciplines and Biofuels: Opportunities and Constraints in the Creation of a Global Marketplace [*pdf] -- addresses precisely these questions and offers some pointers as to the effects of different forms of classification (earlier post).
Now the Brazilian government itself is getting involved in the debate. Hoping to lower global trade barriers on ethanol, it has set its sights on re-classifying the renewable fuel in the international trade arena as a fuel commodity rather than an agricultural commodity, a spokesman at Brazil's Foreign Ministry confirms:
ethanol :: biodiesel :: biofuels :: energy :: sustainability :: trade :: subsidies :: trade barriers :: Doha :: WTO :: Brazil ::
"There have been a series of consultations and discussions in the government about this, and it's in our internal plan," said the spokesman in a phone interview with Dow Jones Newswires. "But it's premature to talk about a schedule for when this might happen." The country's Agricultural, Mines & Energy, Chief of Staff, and Trade ministries are also involved in this discussion, he added.
Brazil - the world's top ethanol exporter as well as its lowest-cost producer - would benefit immensely from lowered trade tariffs on the biofuel. However, the country's ethanol is subject to high import duties in several key trading partners, due in part to a formidable system of tariffs already imposed on agricultural products.
If ethanol were considered an energy commodity, then it could receive the same treatment as petroleum, said Celso Amorim, the country's Foreign Trade Minister last month.
"No one, if it's not for fiscal reasons, and this occurs in few cases, places a tariff on petroleum imports, because that would penalize the whole productive process of the country," he added.
The office of Brazil's Chief of Staff is also a supporter of re-classifying ethanol under the fuel category, according to a report in local business daily Gazeta Mercantil published Monday.
The U.S., the top buyer of Brazilian ethanol this year, imposes a lofty 54-cent-per-gallon duty on direct ethanol imports, as well as a 2.5% ad valorum tariff.
The E.U., expected to be Brazil's top purchaser of ethanol next year, imposes a tariff of 10.2 euros per every 100 liters for denatured alcohol, and a tariff of EUR19.2 per 100 liters for undenatured alcohol. Both types of alcohol can be used for biofuel production.
In the first half of this year, a new bureau of energy was created within the Foreign Ministry to direct Brazil's energy strategies in both the bilateral and multilateral arenas, added the Foreign Ministry spokesman.
Brazil is the world's leading sugar producer and exporter. It is also the world's No. 2 ethanol producer after the U.S.
Article continues
Tuesday, November 14, 2006
Global forest products industry key to combating climate change and energy insecurity - FAO
This is the conclusion of the recently held International Seminar on Energy and Forest Products Industry, organised by the FAO's Forestry Department in Rome, in which intergovernmental and private sector organisations of the global forest product industry joined forces. Participants stressed that well integrated and carefully balanced energy and forest policies around the globe set the stage for these developments. Governments, industry, institutions and society at large each have a role to play and should work together.
The forest products industry is a major consumer of energy, using 6 percent of total industrial energy use in 2003. But the industry also produces energy, as well as other by-products that can be used for energy generation: biofuels such as solid biomass (wood chips, pellets, briquettes, fibres and residues from the forest products industry - for green electricity generation) or feedstocks for the production of liquid fuels (wood as feedstock for thermochemical or biochemical biomass-to-liquids conversion processes, resulting in renewable and CO2-neutral fuels such as pyrolysis oil or synthetic wood-based biodiesel).
The forest products industry is the only sector that already generates approximately 50 percent of its own energy needs, the majority from renewable carbon-neutral biomass. Energy costs, energy supply and climate change are amongst the core issues impacting on the future of the forest products industry.
Wulf Killmann, Director of Forest Products and Economics at FAO, said that this potential needs to be tapped. "Governments have a key role to play in encouraging industries to use cleaner and more efficient energy technologies and in promoting bio-energy."
The experts came to these conclusions on the basis of a series of highly interesting presentations by a variety of scientists, international institutions, industry players and NGO's:
biomass :: bioenergy :: biofuels :: energy :: sustainability :: forestry :: forest products :: wood pellets :: biorefining :: biomass-to-liquids :: climate change ::
The presentations covered a wide range of topics, from (EU) policies and industry efforts on increasing the efficiency of the paper and pulp industry to interesting scenario work on the forestry-based bioenergy sector.
Amongst the latter we find:
• Energy Technology Perspectives Scenarios & Strategies to 2050 [*.pdf], Neil Hirst, Energy Technology and R&D Office International Energy Agency
• Review of global bioenergy scenarios [*.pdf], W.E. Mabee and J.N. Saddler (Forest Products Biotechnology at UBC)
• Forest biorefining and implications forfuture wood energy scenarios [*.pdf], W.E. Mabee, J.N. Saddler, Forest Products Biotechnology at UBC
Understandably, social and environmental sustainability issues ranked high on the conference's agenda as well. Presentations on the tension between sustainability and economic viability included:
• The sustainable Forest products industry, carbon and climate change [*.pdf], Mikael Hannus, Stora Enso, World Business Council for Sustainable Development
• Wood waste for energy: Lessons learnt from tropical regions [*.pdf], Paul Vantomme, International Tropical Timber Organization (ITTO)
• Economic and environmental implications of woodfuel production and competition with other uses [*.pdf], Bernard deGalembert, CEPI
• Nature conservation concerns linked to the development of the bioenergy sector –WWF's perspective [*.pdf], László Máthé, Forest and bioenergy officer WWF
Bioenergy's role in the fight against climate change was highlighted in the following presentations:
• Greenhouse gas and carbon profile of the global forest products industry [*.pdf], Reid Miner, NCASI - Dr. John Perez-Garcia, University of Washington
• Voluntary Efforts against Global Warming and Benchmarks [*.pdf], Hiraku Nihei, Managing Director, Japan Paper Association
• Benchmarking Energy Use and GHG Emissions [*.pdf], Tom Roser, Forest Products Association of Canada (FPAC)
Several case-studies from Europe and Japan on the use of wood-based bioenergy were presented as well , as were industry-specific topics on pulp and paper manufacturing and larger economic studies on biofuels, bioenergy, climate change and energy.
Teresa Presas, Chair of the International Council of Forest and Paper Associations (ICFPA) concluded for her sector that "wood and paper products are uniquely renewable and recyclable products that help reducing greenhouse gas emissions by absorbing carbon dioxide from the atmosphere". The industry is committed to innovative energy solutions that meet the challenge of climate change, increase efficiency, reduce reliance on fossil fuel and expand the use of renewable energy sources. The industry believes that fibre from sustainable managed forests makes a positive contribution to the world's future energy supply.
"To achieve this", Presas said, "the industry needs enabling policies that support research and innovation, promote demonstration projects and improve the investment climate, specifically in this sector. Moreover there needs to be a level playing field between energy and non-energy uses of wood, considering that all this has to take place within the boundaries of sustainable forest management."
The World Wide Fund for Nature (WWF) would be glad to see the global forest product industry taking a stronger role in the energy and climate change mitigation field, but also sets some requirements. "WWF considers that sustainable bioenergy has to be part of the global strategy to reduce greenhouse gas emissions, among other measures aiming to reduce the ecological footprint. Credible certification of bioenergy feedstocks with a focus on social and environmental issues - including greenhouse gas calculations - and land use planning are part of the solution to ensure the sustainability of development", said Duncan Pollard, Director of the WWF Forests for Life Programme.
The seminar was jointly organised by the Food and Agriculture Organization of the United Nations (FAO), the International Energy Agency (IEA) and the International Council of Forest and Paper Associations (ICFPA), in collaboration with the UN Economic Commission for Europe (UNECE), the International Tropical Timber Organisation (ITTO) and the World Business Council for Sustainable Development (WBCSD).
During the meeting, ICFPA, FAO, IEA and WWF agreed to continue working together to apply the unique potential of the forest products sector to mitigating climate change and increasing energy security. The IEA will prepare report back to the G8 with an analysis as part of the Gleneagles Summit Plan of Action and ICFPA will take forward its global CEO leadership statement on energy and climate change in June 2007 in Shanghai.
Article continues
posted by Biopact team at 10:18 PM 3 comments links to this post