U.S. Ethanol Push Collides With Brazil as Tariff Battle Reaches Breaking Point
American biofuel groups demand tougher action against Brazil, arguing ethanol barriers threaten exports, investment and the future of U.S. agriculture.
WASHINGTON - The U.S. ethanol industry intensified its campaign this week as hearings continued before the United States Trade Representative (USTR) over the Section 301 investigation into Brazil's trade practices. Biofuel organizations are urging the Trump administration to approve proposed 25% tariffs on Brazilian products while demanding broader action against what they describe as discriminatory barriers limiting U.S. ethanol exports. The outcome, expected before July 15, is critical because it could redefine biofuel trade between the Americas, influence corn demand, and reshape one of the world's fastest-growing renewable energy markets.
The push is being led by the National Corn Growers Association (NCGA), Growth Energy and the Renewable Fuels Association, which argue Brazil's restrictions extend far beyond import duties. Industry leaders say Brazil has steadily reduced market access through tariffs, regulatory policies and environmental certification requirements that disadvantage foreign producers. According to Chris Bliley, Senior Vice President of Regulatory Affairs at Growth Energy, Brazil has benefited from unrestricted access to the U.S. Renewable Fuel Standard since 2011 while imposing increasingly restrictive measures on American ethanol beginning in 2017, creating what producers describe as an uneven and discriminatory trading relationship.
Brazil Defends Its Biofuel Model as Export Collapse Fuels Trade Tensions
The numbers illustrate the magnitude of the dispute. According to the USTR, U.S. ethanol exports to Brazil plunged from US$762 million in 2018 to just US$96 million in 2025, representing an 87% collapse in seven years. Since 2023, Brazil has maintained an 18% tariff on imported ethanol, although Brazilian officials insist those duties are not responsible for the decline. Instead, they point to the explosive expansion of the country's domestic corn ethanol industry, which has grown nearly 58-fold over the past decade while satisfying an increasing share of national fuel demand.
Brazilian representatives argue the country's ethanol success is driven by structural competitiveness rather than protectionism. Andrea Almeida, representing the Brazilian Corn Ethanol Association (UNEM), told U.S. officials that Brazil's rapid production growth reflects technological investment, year-round processing capacity and rising domestic consumption fueled by nationwide 30% ethanol blending requirements. Around 85% of Brazil's light-duty vehicle fleet is now flex-fuel, allowing consumers to choose between gasoline and ethanol, while roughly 10 billion liters of ethanol are distributed annually across an extensive fueling network.
Beyond tariffs, American producers have placed RenovaBio, Brazil's low-carbon fuel certification program, at the center of their complaints. They argue the system effectively excludes U.S. ethanol from earning valuable carbon credits because its certification requirements demand farm-level verification that is nearly impossible under the structure of American agriculture. While Brazil notes that one U.S. ethanol plant has received partial certification, industry groups say less than 1% of its production qualifies, compared with an average of 86% for Brazilian facilities, making the program a powerful non-tariff trade barrier.
The Trump administration is expected to announce its final Section 301 determination before July 15, a decision that could authorize 25% tariffs on Brazilian products and significantly alter bilateral agricultural trade. Brazil maintains that its environmental standards, ethanol policies and RenovaBio program comply with international rules while delivering one of the world's lowest-carbon renewable fuels. If Washington moves forward with new tariffs, however, the dispute could evolve into one of the most consequential biofuel trade conflicts in recent years, affecting corn markets, renewable energy investments, global ethanol flows and the strategic relationship between the Western Hemisphere's two agricultural superpowers.
