Brazil launches global biofuel alliance and reinforces criticism of European ‘environmental colonialism’ – 09/09/2023 – Market

Brazil reinforced its crusade against what it considers to be the European Union’s environmental neocolonialism. The Brazilian government included in the G20 communiqué a criticism of European anti-deforestation legislation, with the support of Indonesia, another forestry power, and of the environmental requirements that the EU wants to include in its trade agreement with Mercosur. The document highlights the need to avoid discriminatory environmental policies that violate World Trade Organization (WTO) rules. The European law, which came into force in June, provides for sanctions against countries that do not prove to companies that exports of palm oil, soy, coffee, cocoa, meat and others are not linked to deforestation that occurred after December 31, 2020.

The subject will also be raised in the bilateral conversation that President Luiz Inácio Lula da Silva will have with French President Emmanuel Macron on Sunday (10) morning. Lula has already publicly criticized this type of demand.

“I explained to President Von der Leyen Brazil’s concerns with the additional instrument to the agreement presented by the European Union in March this year, which expands the country’s obligations and makes them subject to sanctions in case of non-compliance. The premise that must exist between partners strategic is that of mutual trust and not distrust and sanctions”, said Lula in June, after meeting with Ursula Von der Leyen, president of the European Commission.

Last week, Brazil’s ambassador to the EU and ambassadors from 12 other countries sent a letter to EU representatives saying the legislation is discriminatory and not consistent with WTO rules.

The letter states that European law does not take into account “local circumstances and capabilities, national legislation and certification mechanisms of developing producing countries, as well as their efforts to combat deforestation and commitments made in multilateral fora”.

On environmental issues, Brazil has recently aligned itself more with the USA than with the EU. Alongside the American and Indian governments, Brasília also included in the G20 text mention of the Global Biofuels Alliance, an initiative led by the three countries, and with the participation of 19 other nations. The EU resisted, at first, because, alongside China, it is betting more on electrical energy as the main vector of the energy transition.

The Alliance will be launched this Saturday (9) on the sidelines of the G20 summit in Delhi, with the participation of President Lula, US President Joe Biden and Indian Prime Minister Narendra Modi.
The objective is to stimulate the production and consumption of ethanol around the world. In total, 19 countries participate in the initiative.

The USA accounts for 55% of world production, followed by Brazil, with 27%. India is the fifth largest producer, with 3%, behind the EU, with 4.8%, and China, with 3.1%.

The US produces corn ethanol, which is less competitive and efficient than ethanol. But the lobby of corn producers in the USA is powerful and the government is looking for ways to sell production, even more so given the tensions in relations with China, which was one of the main importers of American corn and has significantly cut its purchases. In addition, electrification is advancing in the US.
According to Evandro Gussi, president of the Sugarcane and Bioenergy Industry Union (UNICA), the alliance should reinforce the type of cooperation that Brazil already has with India and disseminate it to other countries. According to him, four years ago, Brazil began sharing ethanol technology with the Indians, which would have accelerated the Indian program.

“With the alliance, this movement (with this initiative and others we develop) will be accelerated and can be taken to more countries with a vocation for bioenergy at the same time”, says Gussi.

India has an energy matrix that is very dependent on coal, which accounts for around 70% of energy consumption – and, despite having low CO2 emissions per capita, it is the third largest emitter of the pollutant in the world. In the last seven years, according to consultancy Embers, India’s emissions have grown 28.9% and the country is struggling to have more energy from clean sources. At the same time, India has large surpluses of sugar, which can be used to produce ethanol