Colombia levies new tariffs on US ethanol imports

Houston — The Colombian government placed new tariffs on US ethanol imports late Monday, saying American producers enjoy government subsidies that put local ethanol producers at a disadvantage

Imports of American ethanol will be slapped with a tariff of 6.646 cents/kg, equal to the amount of US government subsidies for US ethanol producers, according to the Colombian Ministry of Commerce, Industry and Tourism.

US ethanol trade groups criticized the decision.

"While we have cooperated fully with investigating authorities in Colombia to demonstrate these final duties are unjustified" said a statement from the US Grains Council, Growth Energy and the Renewable Fuels Association.

"[The ministry's] decision was not supported by evidence and raises questions regarding the Ministry's compliance with standard CVD procedures."

In its decision, the ministry said that subsidies for US corn farmers gave ethanol producers an unfair price advantage against Colombian ethanol producers, who produce ethanol from sugar cane.

The ministry began an investigation of US ethanol imports at the request of Fedebiocombustibles, which represents Colombian biofuel producers.

A recent statement from the group said, the Colombian ethanol industry "is seriously threatened by the perverse combination of runaway subsidized imports from the United States and the weak defense of this important Colombian agro-industry."

The trade group said that US ethanol imports benefit from direct payments, tax credits, harvest insurance for corn farmers, tax exemptions and other incentives that domestic producers do not.

According to the US Census Bureau, US ethanol exports to Colombia have sharply risen in recent years, from 8.24 million liters in 2015 to 303.54 million liters in 2019. Through March, US producers sent 82.86 million liters of ethanol to the South American nation in 2020.

Fedebiocumbusitbles said that 2020 domestic ethanol production was expected to reach 453 million liters.