An Iowa State University economic study says the trade barriers are boosting the price of domestic ethanol and that removing them would “decrease the price for U.S. ethanol, while the world price would increase, as U.S. demand — and ethanol imports — would increase.”
According to a press release from ISU’s Center for Agricultural and Rural Development, the study looks at the two largest ethanol producers: Brazil (ethanol from sugarcane) and the U.S.(ethanol primarily from corn). The analysis was based on mathematical simulations using an international ethanol model and country-specific models. The simulations were performed for two U.S. policy reform scenarios: one for trade liberalization alone and the other adding removal of the U.S. 51 cent-per-gallon tax credit to refiners blending ethanol.
The full report can be viewed on the CARD website.