EU-Canada CETA agreement could devastate European ethanol industry, ePure warns

The EU-Canada Comprehensive Economic Trade Agreement (CETA) is a major threat to the EU ethanol industry, the European renewable ethanol association ePure warns.

The agreement, which is to be discussed by the EU’s trade ministers during the informal European Council meeting in Bratislava, Slovakia, on 23 September, could result in 1.2 billion litres of additional duty free imports from Canada to the EU.

This, ePure states, is the equivalent of 20% of the EU’s renewable fuel ethanol production, and would eliminate demand for well over 3 million tonnes of European cereals and sugar beet, undermining the income of thousands of European farmers.

If no safeguard clause is attached to the agreement, CETA could result in a massive change of North American and Transatlantic ethanol trade flows.

The US exports duty-free ethanol to Canada under the North American Free Trade Agreement (NAFTA), already making Canada the number one destination of US ethanol exports.

Robert Wright, Secretary-General of ePure, says that due to NAFTA, US is “by far the biggest winner from CETA”.

The production subsidies that have allowed the Canadian industry to survive the intense price pressure caused by cheap US ethanol imports are set to expire or be scaled back in 2017.

According to ePure, Canadian producers will be looking towards export markets where they can still achieve sufficiently high margins for survival, while the domestic demand will be supplied with US ethanol.

CETA would allow the US to actively push Canadian ethanol out of the market and over to the EU, and the country has about 1.2 billion litres of installed ethanol production capacity that is geographically well located to start exporting across the Atlantic.

“It is not just fantasy but a real danger that the US will be able to piggyback on CETA and export ethanol to the EU via Canada, thus bypassing current EU tariffs and anti-dumping duties on US ethanol.

“We urge the Council and the European Parliament to postpone the implementation of CETA until measures are put in place to adequately protect EU ethanol producers from US exports through the backdoor of CETA”, said Wright.