ePure blasts ethanol quotas under EU-Australia agreement

In Belgium, ePure says the newly announced trade agreement between the EU and Australia is the latest blow to Europe’s renewable ethanol industry and agriculture sector at large, who are already reeling from the EU-Mercosur deal.

The EU-Australia deal gives duty-free EU access to 10,000 tons of Australian ethanol: a major concession on a highly sensitive sector at a time when European renewable ethanol producers face significant competition from producers around the world who enjoy lower energy costs and greater policy support. The EU-Mercosur agreement allows a Tariff Rate Quota of 650,000 tons of ethanol – meaning the EU will allow the absorption of volumes corresponding to 12% of the entire market.

Once again, the EU-Australia deal’s concession highlights the absence of a comprehensive cumulative impact assessment of EU free trade agreements on sensitive sectors such as ethanol.

While presented by the European Commission as a modest quota, this concession is also disproportionate to the current level of EU-Australia ethanol trade. In recent years, trade flows have been negligible, with imports amounting to only 177 tons in 2024 and virtually no trade recorded in most previous years.

Granting a quota far exceeding existing trade volumes raises concerns that the agreement is designed to stimulate new imports rather than reflect established market demand, adding further pressure on EU producers. Such a significant discrepancy between current trade flows and the level of the concession may also create incentives for trade diversion or circumvention via Australia, particularly given the growing global competition in ethanol markets.

Tags: Belgium, ePure, ethanol

Category: Policy