Environmental Engineering Reference
In-Depth Information
Brazil's ethanol economy
Brazil is the world's number two producer of ethanol (behind the US) and the
number one exporter of it. As the result of a thirty-year government promo-
tion programme, slightly over half its huge sugarcane harvest now goes into
ethanol production. In addition to efficiencies of scale, Brazil's manufacture
of ethanol from sugar cane benefits from use of bagasse, the fibrous residue
of cane after the sugar has been squeezed out of it, to heat and power the
fermentation of ethanol.
Using bagasse, most ethanol plants are self-sufficient in energy and can even
sell some excess electricity to the grid. It is reckoned to be competitive with
oil if the oil price is at least $30 per barrel. And it is more than competitive
with US corn-based ethanol (chiefly for the extra initial processing that US
manufacturers must carry out - turning their corn into sugar). The only way
US corn-ethanol producers keep Brazilian sugarcane-ethanol producers from
overrunning the US market is by persuading Washington to put a hefty import
tariff on ethanol.
Despite the intrinsic competitive edge of Brazilian ethanol, it has also had
considerable government support. The state has encouraged the supply side
of the industry through fixed purchases of ethanol by Petrobras, the state oil
company, low-interest loans to ethanol refiners and price support for ethanol.
The state has also mandated demand for ethanol. Since the 1970s, blending
ethanol with petrol has been required, and currently the minimum ratio of
ethanol is 25 percent (though this has sometimes varied depending on the
level of sugarcane harvests).
The car industry in Brazil, which includes most of the European, Japanese and
US car majors, makes “flexi-fuel” cars able to run on proportions of ethanol
that range from 25 percent up to 100 percent. About a quarter of the country's
total car fleet is now flexi-fuel, while the share of flexi-cars in new sales every
year is now around 90 percent. Brazil still imports oil for diesel trucks, although
these imports may decrease in view of the major new oil finds in the Brazilian
offshore. Adding in all the country's diesel vehicles, ethanol now accounts for
around seventeen percent of total road-fuel consumption.
technical potential to cover between 27 and 48 percent of our road trans-
port fuels needs, if all biomass would be dedicated to biofuel production”.
While this could be seen as an encouraging statistic, it is nonsensical to
speak of dedicating all biomass to biofuel production. So the advisory
council suggested that covering a quarter share of EU road-transport fuel
needs by 2030 would be realistic - half from domestic production and half
from imports. So developing countries deserve a market for their biofuel
exports. At the same time, it is clear their exports will have to meet some
basic environmental standards.
