The battle over corn-based and sugarcane-based ethanol — which one is cheaper? — has been brewing for weeks, and I’ve received emails and tweets last week about statements released from both camps: the Renewable Fuel Association (RFA) and the Brazilian Sugarcane Industry Association (UNICA).
RFA accused UNICA last week of making exaggerated and (in some cases) false claims about the cost benefits of sugarcane-ethanol product over American ethanol. RFA said a recent comparison of ethanol prices shows that E10 (10% ethanol/90% gasoline) made with American ethanol would be 7 cents less at the retail level than E10 made with imported Brazilian ethanol.
“UNICA engages in a number of instances of ‘fuzzy math’,” says RFA. “Data from Brazil’s CEPEA, the Center of Advanced Studies in Applied Economics (collected via an agreement with UNICA and another sugarcane growers association), clearly shows that Brazilian ethanol prices have not been competitive with U.S. corn ethanol since the summer of 2009. An American driver who pulled up to the pump today would theoretically spend an additional 7 cents/gal if they filled up E10 from imported Brazilian ethanol instead of E10 from American ethanol.”
In response, UNICA’s chief representative of North America, Joel Velasco noted that if RFA really want to prove that American corn ethanol is cheaper than sugar-cane based ethanol, then, the US, he said, should end the subsidies, drop the trade protection and compete in an open market.
And then Velasco challenged RFA’s VP of research Geoff Cooper that whoever loses will buy the winner a drink: caipirinha vs bourbon…