San Antonio (Platts)--25Feb2009

An international ethanol alliance between the US, Canada and 27 European
countries to promote biofuels worldwide, especially in developing countries,
was announced Wednesday.

The alliance, called the Global Renewable Fuels Alliance, says it
represents more than 60% of global biofuels production. The group, in a
statement, said a "top priority" will be to get World Bank funding for biofuel
infrastructure in developing countries.

Brazil, a major ethanol producer, is not part of the new group but is
"considering" joining, said RFA head Bob Dinneen during a press conference.

"The fact is, the world is on an unsustainable track with its addiction
to oil and we must break that addiction," said the group's spokesman Bliss
Baker. "When 38 of the 47 poorest countries on earth rely on crude oil imports
for energy something has to change."

But US cooperation with international ethanol makers comes as the
country's ethanol lobby seeks to keep tariffs on foreign imports in place.

"History has shown that foreign ethanol arriving in the US can pay the
credit offset and still compete effectively in the marketplace," the Renewable
Fuels Association said in its industry outlook released earlier this week.

The EU fuel quality directive announced in December allows for gasoline
blends with up to 10% ethanol, but also guarantees that blends of up to 5%
ethanol will be allowed until 2013, to avoid potential damage to older cars.

In a similar move to the US, the Canadian Parliament last year passed a
Renewable Fuel Standard requiring gasoline to contain an average of 5%
"renewable content," most likely ethanol, by 2010 and diesel to contain 2%
renewables, most likely biodiesel, by 2012.

"A study by Sandia National Laboratories found that by itself the US
could produce 90 billion gallons a year by 2030. Together with production in
Canada, using the same type of analysis, North American biofuel production
will be able to replace a majority of our oil imports," said the US and
Canadian renewables groups in a statement February 18 ahead of President
Barack Obama's first visit with Canadian Prime Minister Stephen Harper.

--Beth Evans, beth_evans@platts.com