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RFA Says Brazilian Sugarcane Ethanol Not Cheaper

Brazil is ignoring several factors when making price claims.

Compiled by staff

Published: Apr 16, 2010

According to the Renewable Fuels Association, the Brazilian ethanol industry is making exaggerated and in some cases false claims about the benefits of its product over American ethanol. Brazil suggests that sugarcane ethanol is the most affordable renewable fuel currently produced in large quantities, But RFA's Vice President of Research Geoff Cooper says back-of-the-napkin price comparisons are quite deceptive and disingenuous.

By omitting the last 16 months of ethanol pricing data, Brazil's ethanol industry is providing readers with the false sense that Brazilian cane ethanol is always cheaper than U.S. grain ethanol. Cooper says that real data from the market clearly shows U.S. corn ethanol has been considerably cheaper for most of the last year.

Renewable Fuels Association officials say that it appears Brazil is comparing spot prices for Brazilian ethanol to futures prices for corn ethanol. Transportation costs are ignored, and the reports completely ignore ethanol prices for 2009 and 2010. Their comparison table ends with 2008 prices and skips the most recent 16 months of ethanol pricing. RFA believes Brazil avoided using the missing data because it would have clearly showed that U.S. corn ethanol has been a more attractive and cost competitive option for gasoline blenders during that time.

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RFA Says Brazilian Sugarcane Ethanol Not Cheaper

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