In the ongoing trade negotiations between the EU and the Mercosur bloc representing South American countries, excessive duties on bioethanol have become a key issue for the European side. According to the European Chemistry Council (CEFIC), the current import duties of 60-40% for bioethanol produced in South America is making life difficult for EU-based bioplastics producers.

René van Sloten, CEFIC’s executive director industrial policy, said the high duties are making it impossible for EU players to compete with bioplastics manufacturers based outside Europe as well as with producers of plastics made from petrochemical feedstocks, which come into Europe duty free.

In a letter to Commission President Jean-Claude Juncker, the chemical producers have called on the EU to offer duty-free access for bio-ethanol used for applications in chemical intermediates exclusively, rather than for use by the fuels market.

Investment in bio-based factories should taking place in Europe, where the market is, but they are being built elsewhere, van Sloten said, as players here do not have access to bioethanol at world market prices. Bioethanol prices inside the EU are about 60% higher than in Brazil, he noted.

According to data published by the Bio-based Industries Consortium, the EU’s bio-based industries, including chemicals, plastics, pharmaceuticals, paper, textile, biofuels and bioenergy, employ 3.3 million people and have annual turnover of €674 billion.