European red flag raised over surging ethanol imports from Peru

The European Renewable Ethanol Association (ePure) has warned the European Commission (EC) about surging ethanol imports from Peru since entering a free trade agreement in August 2013.

ePure claim in a statement it is ‘apparent an inadvertent change in the pattern of trade is occurring as a direct consequence of this trade agreement’

‘Peru is taking advantage of the elimination of import duties on ethanol by ramping up its exports to the EU and substituting the missing supply with cheap ethanol imports from the US,’ the association says.

Official data reveals that exports from Peru between January and October 2013 have more than tripled to over 93 million litres compared to the same period in 2012. This surge occurred just three months after the removal of import duties. It is believed the figure will be even larger once trade data for the entire year becomes available.

Peru is substituting the missing volumes to meet domestic demand with cheap ethanol imports from the US. Trade data shows 84 million litres of ethanol were imported from the US between January and October 2013 and ePure adds that is a ‘clear sign that bilateral trade agreements can create loopholes for other countries to take advantage of’.

‘It is apparent US ethanol producers are ultimately gaining from this operation at the expense of European ethanol producers, jeopardising investments made to achieve renewable energy targets, create new markets for farmers and generate employment in the EU,’ says Rob Vierhout, ePure's secretary general. ‘The EC must act to prevent the effects of poorly conceived bilateral trade agreements which undermine its own domestic policies.’