Ethanol Tariff Loophole Sparks a Boom in Caribbean

0 Comments – March 9, 2007

This is an interesting article that technically is not about global warming.  Since most proponents of global warming proclaim that we need to increase our use of alternative energy sources (something I personally agree with but for geo-political reasons – not environmental) this article is fitting for this site.  The article discusses the business of importing ethanol into the US since there is a fairly hefty tariff on such imports to protect US farmers.

His company, EthylChem Ltd., is just one of a rush of new Caribbean enterprises trying to serve the suddenly booming U.S. ethanol market.

Then they’ll try to cash in on the islands’ sweet tariff status: an exemption from a 54-cents-a-gallon U.S. tariff on ethanol processed anywhere else. “Avoiding the tariff — that’s the economics of our business,” says Mr. White.

A top energy priority of Mr. Bush is to end a U.S. “addiction” to foreign oil partly by encouraging alternative sources such as ethanol, which can be made from sugar, corn or other agricultural products.

In a world without trade barriers — and trade politics — Brazil would be ethanol king, and the U.S. would be importing Brazilian fuel far more heavily, stoking production further in turn. With efficient sugar-cane production and chemical processing, Brazil can produce ethanol for as little as 80 cents a gallon, less than half the price of U.S. ethanol producers, who mainly convert corn to make the fuel. Sugar cane is a better raw material for ethanol because it ferments more quickly into alcohol.

You many not be able to go to this article without a subscription but here is the link.

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1 thought on “Ethanol Tariff Loophole Sparks a Boom in Caribbean”

  1. Innovation is the only way we can combat global warming. Cheaper ethanol will create lower switching costs for consumers. If the industry does not provide us the choice, we cannot change! I commented on this article as well:

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