China cuts ethanol imports tariff by 25%
Sugarcane ethanol powerhouse Brazil might just have a whole new market to sweeten up. The South American nation is likely to take advantage of China’s agreement to lower the tariff on imports of ethanol to 5% from the previous 30%.
The Finance Ministry announced the new import tax for alcohol and other spirits denatured of any strength will be effective from 1 January 2010.
However, traders are cautious. ‘The low tariff appears to make imports of fuel ethanol viable. But we are studying if there are other restrictions,’ one trader comments, adding the industry is talking about an additional 5% of consumption tax on top of the tariff.
The Chinese government aims to blend 2 million tonnes of ethanol in petrol by 2010 and 10 million tonnes by 2020 to reduce greenhouse gas emissions. But ethanol production has been weaned off food-based grain feedstocks.
The world’s most populous nation has also seen lack of feedstock expansion due to limited farmland and water resources.
Armed with this knowledge, Brazil has long urged China to import its fuel ethanol in addition to China's own production.
The Finance Ministry announced the new import tax for alcohol and other spirits denatured of any strength will be effective from 1 January 2010.
However, traders are cautious. ‘The low tariff appears to make imports of fuel ethanol viable. But we are studying if there are other restrictions,’ one trader comments, adding the industry is talking about an additional 5% of consumption tax on top of the tariff.
The Chinese government aims to blend 2 million tonnes of ethanol in petrol by 2010 and 10 million tonnes by 2020 to reduce greenhouse gas emissions. But ethanol production has been weaned off food-based grain feedstocks.
The world’s most populous nation has also seen lack of feedstock expansion due to limited farmland and water resources.
Armed with this knowledge, Brazil has long urged China to import its fuel ethanol in addition to China's own production.
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