Brazil, US and EU one step away from unified global ethanol standard; water content only remaining issue

February 12, 2008

In Brazil, representatives of Unica, the Sao Paulo-based sugar cane industry association, said that Brazil, the United States and the European Union have agreed on all items in a new international standard for ethanol, except the volume of water in ethanol. The EU wants to limit water content to 0.24 percent, while Brazil has proposed 0.5 percent and the US is pressing for a 1.0 percent water content. When agreement it achieved, it will permit ethanol to be traded globally as a unified commodity. Brazil and the United States, which are major ethanol producers, object to the lower water standard proposed by the EU because it would reduce overall production.

The United States, Brazil and the European Union recently released their â€œWhite Paper on Internationally Compatible Biofuels Standardsâ€ that will pave the way towards a unified international standard for biodiesel and ethanol. An international committee found that 9 of 16 standards ethanol were “in alignment” while 6 could be be aligned in the short term. Only 6 biodiesel standards were found to be aligned, and the committee found recommended that the remainder could be aligned through blending biodiesel varieties.

In Washington, the Government Accountability Office said last month that biofuels trade would decline and energy prices would climb unless global standards for biofuels are developed. The GAO said that â€œthe array of incompatible gasoline and diesel blending stocks, and final blended products that cannot be interchanged at the retail level” are reducing opportunities for trade. The GAO recommended that the Departments of Transportation and Energy â€œencourage uniform biofuel and petroleum product blending practices.â€

The Transatlantic Economic Council (TEC), which met in Washington in November, is expected to propose definitive standards for biofuels trade.

ANSI from the US, CEN from Europe and ABNT in Brazil were among the organizations which have conducted initial meetings and are now preparing a report to their respective countries on areas where the standards in the three regions are virtually identical, need only minor “tweaking”, or require major changes. The goal of the US is to coordinate standards at the first two levels in 2008.