U.S. Imports of Ethanol Produces Chemical Tankers

Brazil is the world's largest exporter of renewable transport fuel. The United States began to import a large amount of ethanol from the country. Therefore, this year, the Atlantic Chemical Tanker is expected to usher in new capacity demand at a time when US domestic ethanol production is under pressure.

The U.S. government’s subsidies for domestic ethanol production expired at the end of 2011, and there is no supplemental plan for 2012. According to the Renewable Fuels Association, the United States is the world’s largest ethanol producer and produced 13.2 billion gallons of ethanol in 2010. Critics claim that this subsidy has caused American taxpayers to pay too much. In addition, the production of ethanol requires more grain to cause greater carbon pollution, and the United States has greatly reduced its use of clean fuel to protect the environment.

In addition to terminating the subsidy, the United States has also drastically cut the high tariffs on imported ethanol. Affected by this, Brazil currently has the opportunity to gain greater market share in this lucrative renewable fuel market. According to the Brazilian Sugarcane Industry Association, the United States has become the primary destination for Brazilian ethanol exports, followed by the Netherlands, Jamaica and El Salvador.

Although the U.S. plan to increase the ethanol content in gasoline from 10% to 15% has not yet been approved, the major trend of ethanol content growth will certainly stimulate the U.S. import demand for ethanol in Brazil.

The raw material for the production of ethanol is sugar cane instead of grain, and the import tariff of the United States is the main obstacle to the export of ethanol in Brazil. According to the Brazilian Sugarcane Industry Association, sugarcane harvested in 2010-2011, ethanol production and export volume will also increase significantly.

The Brazilian Sugarcane Industry Association** Marcos Jank said: "The United States and Brazil should show leadership and work together to develop a truly global ethanol free market without trade barriers, just as they are free to open up in cooperation in the oil field."