European renewable ethanol producers react to the EU-Mercosur agreement

BRUSSELS, 17 January 2026 -- More than 25 years of talking and tweaking have not improved the EU-Mercosur agreement, which remains a bad deal not just for the European renewable ethanol sector but for European farmers and rural economies.

The last-minute EU-Mercosur ‘safeguards’ aimed at placating farmers are cosmetic at best and when it comes to ethanol imports will be ineffective. The procedures are complex, thresholds high, and reaction times slow.

The European Commission ignored repeated warnings from sensitive agricultural sectors like European bioethanol producers and have now offered Mercosur countries, in reality to Brazil, 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.

The mere possibility that Mercosur could double its annual ethanol exports highlights a serious flaw in the agreement. Ethanol should have been designated a sensitive product from the start. The volumes of duty-free ethanol granted to Mercosur countries are grounded in outdated models that fail to align with today’s market conditions or pricing realities. No economic impact assessment has been conducted on renewable ethanol by the European Commission.

Lastly, the risk of circumvention of fuel and beverage ethanol via so called chemical use route remains high with uncertain “end-use procedure” customs compliance in the future.

The EU now needs to find ways to make its ethanol market bigger to accommodate a flood of imports and create new markets for domestic producers. This means including crop-based biofuels in the CO₂ for cars and vans regulation and allowing crop-based biofuels in aviation and maritime.

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