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Washington ethanol offer scrapped

May 28, 2010 at 12:25 PM   |   Comments

WASHINGTON, May 28 (UPI) -- A Memorial Day discount of 54 cent-a-gallon on ethanol planned by the Brazilian Sugarcane Industry Association in the U.S. capital was scrapped due to unspecified "political" influences, the industry group said.

The purpose of the promotion, at two Capitol Hill Exxon gas stations, was to draw attention to the 54 cent-per-gallon tariff on imported ethanol, the Brazilian association, known as UNICA, said.

Eliminating the tariff, UNICA maintains, would help reduce price volatility in the ethanol market and ultimately lower the cost of gasoline in the United States.

"The event would have also educated drivers about the benefits of sugarcane ethanol -- a clean and affordable renewable fuel that reduces greenhouse gas emissions by at least 60 percent compared to gasoline and could help the United States cut its dependence on oil from the Middle East," UNICA said in a release.

"While we are unclear who caused this sudden shift in plans, one thing is certain: consumers win when businesses have to compete in an open market, because competition produces higher quality products at lower costs," said Joel Velasco, UNICA's chief representative in North America.

Velasco said UNICA would continue pushing for open market competition by encouraging the U.S. Congress to end the tariff on imported ethanol.

The United States will consume nearly 13 billion gallons of ethanol this year, UNICA says on its Web site. The association states that sugarcane ethanol is typically 50 cents-per-gallon less than the price of corn-based ethanol.

Calling UNICA's planned discount for Washingtonians a publicity stunt, The Renewable Fuels Association said in a release, "Brazil is spending millions of dollars to mislead Americans that its ethanol is superior to the ethanol produced here at home in the United States."

RFA said that gasoline, at current prices, if mixed with 10 percent U.S. ethanol would be 11 cents cheaper than a gallon of gas mixed with sugarcane ethanol from Brazil. If the 54-cent tariff were removed, RFA said, E10 mixed with Brazilian sugarcane ethanol would still be 6 cents more per gallon than E10 with U.S.-produced ethanol.

"The facts are clear: using domestically produced ethanol saves drivers money while supporting jobs and local economies here in the U.S.," said Renewable Fuels Association President Bob Dinneen. "Rather than seeking to cannibalize this market, Brazil should be working with the U.S. to expand the use of ethanol globally to displace reliance on petroleum."

But UNICA's Velasco said he'd like to see sugarcane ethanol available as an alternative and competing in an open market alongside corn ethanol, biodiesel and other renewable fuels.

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