The Brazilian government has decided to end tax exemption on ethanol imports with immediate effect, as per the report published on the website of the country’s Agricultural Ministry.
This would impact the ethanol industry from the United States as it accounts for nearly all the Brazilian imports of the fuel. Ethanol consumed in the Northeastern region of Brazil is supplied by US ethanol producers.
The ethanol imports will now have to pay a tax of 16% to enter Brazil till December this year. The note stated that the levy would increase to 18% in 2024.
The ethanol import tax was zeroed by the administration of former President Jair Bolsonaro as part of the measures to keep a check on the costs of fuel and food.
Both the U.S. and Brazil are the world’s largest producers and exporters of ethanol.