Ethanol Mills Given Tax Breaks as Brazil Seeks Output Boost

Brazil, the biggest ethanol exporter, will give tax deductions and extend low-cost credit to mills in a bid to lift output and reduce fossil-fuel imports.

The government will grant 970 million reais ($480 million) in credits to offset a 0.12 real per liter tax on ethanol and offer 4 billion reais in loans for crop renewal this year, Finance Minister Guido Mantega told reporters in Brasilia today. There will also be a 2 billion-real line of credit for ethanol stockpiling and tax credits for the chemical industry, he said. Shares of energy and petrochemical companies rallied.