Even after more than five years of re-negotiation and tinkering, the EU-Mercosur agreement remains a bad deal for the EU renewable ethanol sector, for European farmers, and for Europe’s drive for strategic industrial and agricultural autonomy says the European Renewable Ethanol Association (ePURE).
According to ePURE, the European Commission has ignored repeated warnings from European bioethanol producers and has decided to offer Mercosur countries “a huge share” of the EU’s ethanol market.
In doing so, the EU is putting at risk European biorefineries producing food, feed, fuel, fertilizers, and much more.
ePURE stresses that European ethanol producers are not opposed to trade, provided it is fair and integrated in a consistent long-term strategy – something Brazilian ethanol producers have enjoyed for decades.
In the EU unfortunately, there seems to be no such strategy.
After having encouraged billions of euros of investments in EU biorefineries under the 2009 Renewable Energy Directive (RED), the EU took two contradictory routes that have led to so much frustration:
- One was to restrain ethanol consumption and production after having rightfully recognized in 2003 that this renewable energy would contribute to de-fossilizing transport and reducing the EU’s dangerous energy dependency;
- The other was to offer, at the beginning of negotiations with Mercosur, a huge share of the nascent EU ethanol market basing the calculation on a projected ambitious growth that never saw the light because of the first route taken by the EU.
Consequently, the share of the ethanol market ceded to Mercosur, which was projected to represent about 6 percent of a balanced and dynamic ethanol market, now represents 12 percent of the total EU production capacity.
This is in a stagnant ethanol market already fully open to imports from many other countries, including major producers such as Canada and Pakistan.
ePURE highlights that, beyond threatening investments and thousands of jobs mostly in rural areas, this Mercosur agreement is undermining EU energy dependency and food security, as well as the bloc’s ability to decarbonize sectors such as aviation, maritime, and the chemical industry.
However, ePURE notes that there is still time before the agreement materializes. The EU has some years ahead to revert the trend and put together a coherent visionary plan to give EU producers the means to compete with Mercosur on equal footing.
