What would you think if I told you that I want to have a leading role in climate change policy but that I restrict the access of renewable solutions to my market?
“You’re totally inconsistent” would be the natural answer. But this is exactly what the European Commission just did.
The EU has ambitious climate targets. The Commission is currently engaged in drafting its new renewable energy directive and is discussing its strategy post-2020 to decarbonize transport. The same institution, based on the conclusions of the so-called GLOBIOM study, acknowledges that sugarcane ethanol is the conventional biofuels with the highest greenhouse gas savings. Brazil is also producing second-generation ethanol based on sugarcane wastes and residues. Therefore, it would make sense for the EU to import sugarcane ethanol.
Wrong answer. Domestic vested interests prevailed over the EU public interest and the Commission decided to remove ethanol from the trade offer that was exchanged with Mercosur yesterday! Consequently, the EU will continue to import oil freely and to promote the consumption of inefficient biodiesel.
Read our position paper and you will get a sense of how disappointed and, to some extent, how frustrated I am.
The EU-Mercosur agreement would provide a unique opportunity to strengthen our collaboration in the sugar and ethanol sector – a sector in which a number of European companies (Shell, Tereos, BP, Louis Dreyfus among others) have already heavily invested in Brazil.
The sustainability and competitiveness of Brazilian sugar and ethanol would be a perfect complement to the EU production, increasing consumers’ welfare, boosting innovation in the bioeconomy while helping to preserve the environment.
It’s time to change the way we look at trade negotiations. They don’t take place in isolation of other policies. The Commission will have a second chance to include sizeable TRQs for sugar and ethanol in the next round of negotiations. Let’s hope it won’t be a missed opportunity!