GLOBAL: Brazil - A Model for Global Biofuel Industry

It doesn't take much "vision" to project what a flex-fuel society (one that exploits the use of a variety of fuels) looks like. While America's response to the energy crisis of the 70's was to buy smaller, more gas efficient (predominantly Japanese) vehicles, Brazil decided to develop a native alternative fuel economy that would not be so reliant on foreign sources of fuel.

Our response only led to more energy dependence and has been compounded by a worsening balance of trade, pollution, and political intrigue. Meanwhile, Brazil is well positioned to lead the world toward a more decentralized energy landscape based on fuels made from crops and biomass.

Below is an article that appeared on The Truth about Trade and Technology website.

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Brazil leading U.S. in renewable fuels race
by: Dale Johnson

As President George W. Bush was advocating the nation seek greater energy independence using renewable resources, a small delegation of Midwesterners returned from Brazil where Bush’s dream is already a reality.

Three decades ago, Brazil was importing 90 percent of its petroleum consumption, and was hit hard by the 1973 oil embargo. Brazil launched a policy of energy independence, with ethanol from sugarcane the foundation.

Today, Brazil’s ethanol industry is flourishing. Brazil is the world’s largest ethanol producer at 4.4 billion gallons annually. The United States’ ethanol output, while spurting the last two years, totaled 4 billion gallons in 2005.

“They are way ahead of us in biofuels policy,” states Joel Severinghaus, an international trade analyst with the Iowa Farm Bureau. He recently led a 13-member Midwestern delegation on a 10-day biofuels study tour of Brazil.

The stark realization of what can be achieved if a nation sets a policy is painted across southern Brazil’s sugar-ethanol landscape. Ethanol from sugarcane costs less than $1 a gallon to produce ($1.50 for anhydrous ethanol with the last 3 percent of water removed). Ethanol from corn in the United States costs about $1.50 a gallon.

Brazil’s National Alcohol Program gives tax incentives for ethanol production and ethanol-powered automobiles. Brazil’s renewable fuel policies have reversed the exodus of energy dollars.

“In the 1970s and 1980s, Brazil pushed 100 percent ethanol as a fuel source,” explains Severinghaus. Automakers adapted and produced vehicles to burn pure ethanol. The goal changed buying patterns and pushed E100 to 55 percent of all gasoline consumed. The majority of new cars now sold have flex-fuel engines that can run on E100.

Today, Brazilian motorists can choose between E25, E100, and diesel fuel (in trucks only since no cars are allowed to have diesel engines).

Sugarcane is the base feedstock of Brazil’s ethanol industry.

Ethanol plants are co-located with sugarcane mills, primarily in Sao Paulo state, home to two-thirds of the plants.

“The Brazilian ethanol plants are completely energy self-sufficient,” exclaims Severinghaus, “plus, at the flip of a switch, they can produce either ethanol or crystalline sugar on any given day, whichever is more profitable.