Moving the Brazil-US Energy Cooperation a step closer

Leticia Phillips — posted 05/04/2012

As I write this, my Brazilian and American colleagues from government and private sector are working around the clock to ensure that President Dilma Rousseff’s trip to Washington D.C. on this upcoming Monday is a great success. Success for Brazil and success for the U.S.  And because this is the President’s first trip to the U.S. in her current post it makes it all the more important.  I am particularly glad that this meeting takes place at a time when the ethanol import tariff is an issue of the past.  So, we can strike that item off the agenda once and for all.

Those who follow us closely will know that as of the end of 2011 Brazil and the U.S. have zeroed their import tariffs on ethanol, creating a truly free and impressively large market for sugarcane derived biofuel. We and many others see this as a big milestone in time. If you add the Strategic Energy Dialogue to this you’ve got continued political commitment on the U.S. part. And if you add President Dilma’s and President Obama’s announcement of the expansion of the MoU on biofuels to include cooperation in aviation in March last year, you’ve got nothing short of a new era in energy cooperation between our two great nations.

We’ve passed some major hurdles, that’s for sure. We should now focus on finding ways to help create a global market for ethanol. This is my hope for the meeting next week. I strongly believe our governments are moving in the right direction on the MoU and on the Strategic Energy Dialogue. But I also believe we’d have more and faster impact if the private sectors in both countries are actively engaged in these processes. We’re hopeful that our government will call on us. Our capacity to bring new ideas to the table and our desire to innovate and invest can help make this political cooperation a reality for businesses and for consumers.

We all recognize that finding renewable, affordable and sustainable solutions to the world’s energy challenges requires a great deal of commitment and a good deal of courage. When Brazil and the U.S. eliminated their import tariffs they sent a clear signal to the global community. But both nation’s commitment and dedication need to be met with open minds and open arms if we want real, positive change for the environment.  Come end of day Monday, we might know what energy deliverables will be announced and what new challenges will be put before us. I am excited to see what the results will be.

Brazil and the U.S. have shown what’s possible when policy is right, when markets are open and when trade and innovation are encouraged. But the challenges we face are complex and they require everyone’s genuine commitment that goes beyond what’s said in policy papers. We need to get things done! The goal here is to move the world away from near complete dependence on fossil fuels. When the ambition is so high, you can safely assume that the gains will be too.

Continuing to spread the Word about Clean Solutions from Sugarcane

Marcos Jank — posted 05/03/2012

When we created sugarcane.org last year, our intent was to continuously provide pertinent information for a growing audience of people who wanted to learn more about different aspects from sugarcane: products, sustainability, benefits, the Brazilian experience, global policies and much more. We wanted to let you know that we have just up-loaded additional information and materials on the website.

Here’s a brief snapshot of the new material we would like to share with you. We hope you find it helpful.

Additional content on sustainability and benefits from sugarcane include:

Interested in the Brazilian sugarcane experience? Here’s some new material we have picked out on this topic:

1 Impact on Brazil’s Economy – The sugarcane industry in Brazil represents an important part in the country’s economy. The sector adds US$50 billion to the country’s GDP and provides  good employment to some 1.28 million workers whose salaries rank among the highest in  Brazil’s agricultural sector.
2 Reduced Emissions – Since the start of Brazil’s ethanol program in 1975, more than 600 million tons of carbon dioxide emissions have been avoided thanks to the use of this clean and renewable fuel.
3 Commitment to sustainability – The Brazilian government’s comprehensive package of environmental policies is a global benchmark and can serve as a model.
4 Fair Pricing – In 1999, an innovative and voluntary sugarcane payment system was set up to help ensure fair and equitable relationships between sugarcane growers and millers.

Lastly, we have also included an overview of sugar policy United States and the European Union under the “Global Policy” section.

We want to keep you informed of the latest developments in the sugarcane industry in the best way possible, so please feel free to send us your suggestions about new content for this website.

Once again thank you for your support and don’t forget to follow us on Twitter for latest news on clean and renewable solutions from sugarcane!

What’s possible when people have choice?

Géraldine Kutas — posted 26/01/2012

A lot. And the Americans will be the first to tell us.

After more than three decades, the U.S. government lifted its tariff on ethanol giving the American public greater access to and an increase in environmental benefits starting in 2012. This is clearly a significant step forward, but I can’t help but think that we are missing out here in Europe?

Europe has set an ambitious environmental target in its 2020 energy legislation yet it simultaneously discriminates against a commercially viable renewable fuel that enables us to reach those same targets. Does anyone else see this paradox?

I know – and EU decision makers know too – that sugarcane ethanol reduces greenhouse gas emissions by 90 percent on average compared to ordinary fossil fuels, making it the best carbon performing biofuel produced today on a commercial scale. Since free trade is, in fact, a two way street, I should highlight that in 2010, Brazil eliminated its ethanol import tariff, undeniably increasing Brazil’s energy security. Today, Brazil hopes to encourage other countries around the world to do the same and develop free markets for clean, renewable fuels such as ethanol. I commend the United States for finally letting their import tariff expire – now I urge European citizens to make note of what European legislators owe them. To be fair, Europe isn’t alone. Big economies like China and Japan also impose an import tariff on ethanol.

Trade barriers can deprive Europeans of access to the many benefits of sugarcane ethanol. We wholeheartedly support and guarantee sustainability in the Brazilian ethanol production. Since the approval of the Bonsucro sustainability standards by the EU in July 2011, 12 mills were successfully certified within 6 months under that scheme. That’s commitment. But EU’s sustainability criteria, can act as non-tariff barriers, and their potential to limit trade in biofuels is significant.

So, what I think European consumers are missing here is choice. The choice to:

…increase relative independence on fossil fuels

…choose to power cars with a clean and renewable fuel

…cope better with high fuel prices

And ultimately to play an important role in meeting ambitious environmental targets decision makers have promised them.

It is urgent to act.

I know this won’t happen overnight, import tariffs create distortions and distortions take time to correct. But my hope for this year is that we start questioning their true merit!

We have a busy year ahead, let’s get to work and you’ll hear from me again in the coming months.

Are EU sustainability criteria for biofuels compatible with WTO rules?

Géraldine Kutas — posted 12/12/2011

That’s the question many of us are grappling with today.

With the aim of meeting environmental goals, the European Commission is now due to finalize the very last provisions of the sustainability criteria it established two years ago in both the Renewable Energy Directive (RED) and Fuel Quality Directive. The criteria were created as a mechanism to ensure that biofuels marketed in the European Union (EU) truly help in mitigating climate change and preserving biodiversity.

But recent decisions taken by the dispute settlement body of the World Trade Organization (WTO) – US — Clove Cigarettes, US — Tuna II (Mexico) and US –– COOL – could jeopardize the viability of the criteria, resulting in significant consequences for trading biofuels.

Are sustainability criteria for biofuels “discriminatory” or “unrelated to product characteristics”? This issue has been widely discussed among stakeholders, including policymakers, scientists, NGOs and academics, all with competing views.

Given the importance of sustainability criteria for the EU biofuels market, we recently co-organized a workshop with the International Centre for Trade and Sustainable Development (ICTSD) to provide a platform for experts in Brussels to discuss the legal and technical arguments around the (in)compatibility of EU sustainability criteria. That way, we could gather opinions from all sides for a constructive dialogue in light of the recent WTO jurisprudence dealing with the Agreement on Technical Barriers to Trade (TBT).

The two remaining provisions I mentioned earlier that are under consideration by the European Commission are highly contentious. Indirect Land Use Change (ILUC) is one of the most prominent examples of where incompatibility could occur since science is currently too flawed to attribute a specific ILUC impact to specific biofuels feedstock. Another example is “highly biodiverse grassland”, which clearly targets specific regions of the world. Andrew Shoyer, chairman of Sidley Austin LLP’s international trade and dispute resolution practice, advises that land-use criteria on biodiversity and any ILUC factor would be “particularly vulnerable”. And furthermore, specifically regarding ILUC, a recent EU-commissioned study by the International Food Policy Research Institute (IFPRI) concluded that many uncertainties remain surrounding the calculation of ILUC. It especially emphasized that such model cannot differentiate between direct and indirect land use emissions due to a lack of empirical evidence.

Another reason that EU sustainability standards might not be compatible with WTO rules is if they effectively discriminate between domestic and imported products based on individual production methods. Even though EU directives don’t contain a legal restriction on the imports of biofuels, in practice they can affect its marketability resulting in de facto discrimination. That means Brazilian biofuels – despite their proven outstanding environmental benefits – potentially could be limited in accessing the European market – a market which developed these rules explicitly to benefit from GHG-reducing fuels. There is a hint of paradox here.

What I know for sure is that we have more questions than answers on the table. In fact, this was also the outcome of our event. Let’s not rush into this. With all the uncertainty still to be clarified, I hope EU policymakers will take the time to carefully analyze cases affected by the TBT and the GATT agreements. The consequences could be detrimental for biofuels and many other renewable energy sources if they get this wrong. At UNICA we welcome all efforts to address climate change, and are convinced that a thoughtful decision that meets environmental objectives and is compatible with the WTO can be reached.

Bioplastics Further Unlock the Potential of Sugarcane

Géraldine Kutas — posted 21/11/2011

We at UNICA use the phrase ‘One plant, many solutions’ and I think this describes sugarcane well. Sugarcane has played a major role in helping Brazil become virtually energy independent. But that’s not all.

Thanks to tremendous advances in innovation, sugarcane is being used more and more to help solve our global energy challenges. Sugarcane is now expanding into new clean and renewable products, like bioplastics and bio-packaging.

The latest developments in this fast-evolving sector were discussed last week at the Biopackaging Summit in Brussels. I was glad for the opportunity to participate in this event where stakeholders came together to discuss the latest trends, challenges and opportunities for the biopackaging industry.

Conventional plastics are ubiquitous these days – they are part of our everyday lives, the infrastructure around us and many products we use. But the problem is that they are economically and environmentally unsustainable. The production of traditional fossil-based plastics results in significant greenhouse gas emissions. They can also produce a significant amount of pollution and waste if not recycled properly, or not recycled at all. Many see the low cost of conventional plastics as an advantage. But the price is tied to volatile oil prices. That, combined with the fact that petroleum supply is a non-renewable resource and therefore finite, make it smart to look into alternatives.

The good news is that high-tech innovation has recently unveiled that sugarcane ethanol can be used as a substitute for petroleum, and the result is a more eco-friendly product! Bioplastics have the same physical and chemical properties as regular plastic. The difference is that sugarcane-based bioplastics generate far fewer dioxide carbon emissions during production. All of this while bioplastics are 100 percent recyclable and even some are biodegradable.

Bioplastics are still a niche, but the market is growing – particularly in Brazil where the largest plant of biopolyethylene is located. A recent report by Technavio, a global research company, predicts that the global bioplastics market will grow 32 percent by 2014.

And we have already seen a number of companies begin to switch to more environmentally-friendly packaging. Perhaps Coca-Cola is the best-known example, when two years ago it launched the PlantBottle, a PET made with Brazilian sugarcane. The new packaging contains as much as 30 percent plant material without changing the color, weight or appearance. Since then, Coca-Cola has shipped more than 2.5 billion beverages worldwide using PlantBottle packaging. Other industries have followed Coca-Cola’s lead in bioplastic packaging, including Heinz, Nestlé, Danone, Pantene, Johnson&Johnson and Ecover.

We are all under pressure to become more environmentally responsible. Since plastics are not going away anytime soon, I am excited sugarcane has helped in developing an environmentally-friendly alternative – bioplastics – that lowers greenhouse gas emissions in this world.