About ePURE

Trade & Customs

Globally, 90.5 billion litres of renewable ethanol were produced in 2014 but only about 10% of this production was traded internationally. Most of global renewable ethanol production was consumed domestically, in the country it was produced, as a renewable transport fuel. The United States is by far the largest ethanol producer followed by Brazil. EU renewable ethanol production has grown significantly since 2003, but while Europe is today the third largest producer in the world, it remains a relatively modest player, accounting for just over 7% of global ethanol production in 2014.

The European ethanol market is increasingly exposed to duty-free imports

In 2014, Europe imported 600 million litres of ethanol from third countries, which represents less than 10% of total EU consumption.

In contrast, between 2009 and 2013, imports represented above 20% of EU ethanol consumption. Close to 80% of all imports came from countries that have duty-free access to the EU market, through Free Trade Agreements or other trade preferences. The top five countries of origin were Guatemala, Bolivia, Pakistan, Peru and Costa Rica. Together they accounted for 60% of all EU ethanol imports.

 

The USA and Brazil, which are the first and second biggest ethanol producers in the world respectively, are among the few countries that pay the full EU import duty on ethanol. These two countries have, until very recently, been the largest exporters of ethanol to Europe for the past 10 years.

A balanced approach to ethanol trade is needed

Given this context, the EU renewable ethanol industry's approach to ethanol trade is guided by the following principles:

  • Further trade liberalisation can only take place when a fairly regulated environment has been created. In particular, the classification of mixtures needs to be resolved in such a way that it does not undermine the EU market and lead to unfair competition from abroad.
  • Across the world, the majority of ethanol is produced within the framework of national biofuels programmes and benefit from a variety of different political and economical support mechanisms. Discrepancies in these support mechanisms provoke competition issues that need to be taken into account when negotiating trade agreements.
  • Renewable ethanol production is vitally important because it contributes towards reducing GHG emissions, reducing energy dependency and is a source of job creation in many sectors of the economy. However, for this to happen, renewable ethanol production should only be encouraged in areas where it is produced sustainably and primarily for domestic use. 

The trade of ethanol and the domestic production and consumption of ethanol should be balanced in such a way that the goals of addressing climate change, creating energy independence and long-term employment can be achieved. In the absence of such a balance these goals could well be undermined. With trade on the one hand and local production and consumption regimes on the other, striking a balance between the two is the only way to create a win-win situation for Europe and the rest of the world.

Key Facts

  • While Europe is today the third largest producer in the world, it remains a relatively modest player, accounting for just over 7% of global ethanol production in 2014
  • In 2014, Europe imported 600 million litres of ethanol from third countries, which represents less than 10% of total EU consumption
  • Close to 80% of all imports came from countries that have duty-free access to the EU market