Ethanol fuel in Brazil

Ethanol fuel in Brazil

Brazil is the world's second largest producer of ethanol and the world's largest exporter, and it is considered to have the world's first sustainable biofuels economy and the biofuel industry leader.cite web|url=|title=Brazil Institute Special Report: The Global Dynamics of Biofuels|author=Daniel Budny and Paulo Sotero, editor|publisher=Brazil Institute of the Woodrow Wilson Center|date= 2007-04|accessdate=2008-05-03|language=|format=PDF] Citation | last = Inslee, Jay; Bracken Hendricks | title = Apollo's Fire | year = 2007 | pages=153-155, 160-161 | publisher = Island Press, Washington, D.C. | id = ISBN 978-1-59726-175-3 . "See Chapter 6. Homegrown Energy."] cite web|url= |title=With Big Boost From Sugar Cane, Brazil Is Satisfying Its Fuel Needs |author=Larry Rother|publisher=The New York Times|date=2006-04-10|accessdate=2008-04-28|language= ] cite news|url= |title=Biofuels in Brazil: Lean, green and not mean |author=|publisher=The Economist|date=2008-06-26|accessdate=2008-07-30|language= From "The Economist" print edition] Together, Brazil and the United States lead the industrial world in global ethanol production, accounting together for 70% of the world's productioncite web |url= |title=Latin America -- the 'Persian Gulf' of Biofuels? |publisher=The Washington Post|author= Marcela Sanchez |date=2007-02-23 |accessdate=2008-05-03|language= ] and nearly 90% of ethanol used for fuel. cite web|url= |title=Biofuels: The Promise and the Risks, in World Development Report 2008 |publisher=The World Bank|year=2008|pages= pp. 70-71|accessdate=2008-05-04|language= |format=PDF] In 2006 Brazil produced 16.3 billion litres (4.3 billion U.S. liquid gallons),cite web |url=|title=Industry Statistics: Annual World Ethanol Production by Country|publisher=Renewable Fuels Association|date= |accessdate=2008-05-02|language= ] which represents 33.3% of the world's total ethanol production and 42% of the world's ethanol used as fuel. Total production is predicted to reach at least 26.4 billion litres (6.97 billion U.S. liquid gallons) for 2008. [Cite web| url=|title=Produção de álcool e de açúcar baterá recorde em 2008, prevê Conab |author= |publisher=Folha de São Paulo |date=2008-04-29 |accessdate=2008-05-03 |language=Portuguese] Brazil’s 30-year-old ethanol fuel program uses modern equipment and cheap sugar cane as feedstock, the residual cane-waste (bagasse) is used to process heat and power, which results in a very competitive price and also in a high energy balance (output energy/input energy), which varies from 8.3 for average conditions to 10.2 for best practice production.cite web|url= |author= Macedo Isaias, M. Lima Verde Leal and J. Azevedo Ramos da Silva|title= Assessment of greenhouse gas emissions in the production and use of fuel ethanol in Brazil|publisher=Secretariat of the Environment, Government of the State of São Paulo|year=2004|accessdate=2008-05-09|language=|format=PDF] The Brazilian ethanol program provided nearly one million jobs in 2007, and cut 1975–2002 oil imports by a cumulative undiscounted total of US$50 billion.Lovins. A.B. (2005). Winning the Oil Endgame, p. 105.] The production of ethanol is concentrated in the Central and Southeast regions of the country, which includes the main producer, São Paulo State. These two regions were responsible for almost 90% of Brazil's ethanol production in 2004.

There are no longer light vehicles in Brazil running on pure gasoline. Since 1977 the government made it mandatory to blend 20% of ethanol with gasoline (), requiring just a minor adjustment on regular gasoline motors. Since 1991 the mandatory blend is allowed to vary nationwide between 20% to 25% of anhydrous ethanol, and since July 2007 the blend was set at . By the end of 2006 there were 33,000 filling stations throughout the country with at least one ethanol pump. The Brazilian car manufacturing industry developed flexible-fuel vehicles that can run on any proportion of gasoline () and hydrous ethanol (E100).cite web |url=| title=Perspectivas de un Programa de Biocombustibles en América Central: Proyecto Uso Sustentable de Hidrocarburos|author=Luiz A. Horta Nogueira|publisher=Comisión Económica para América Latina y el Caribe (CEPAL)|date=2004-03-22|accessdate=2008-05-09|language=Spanish|format=PDF] Introduced in the market in 2003, the flex-fuel vehicles became a commercial success,cite web| url= |title=Brazil's flex-fuel car production rises, boosting ethanol consumption to record highs|date=2007-11-12|author=William Lemos |publisher=ICIS chemical business |accessdate=2008-05-03|language= ] and by August 2008, the fleet of "flex" cars and light commercial vehicles had reached 6.2 million new vehicles sold, which represents around 23% of Brazil's light-duty motor vehicle fleet.cite web|url=|title=Veículos flex somam 6 milhões e alcançam 23% da frota |date=2008-08-04|publisher=Folha Online|accessdate=2008-08-04|language=Portuguese] The success of "flex" vehicles, as they are popularly known, together with the mandatory use of E25 blend of gasoline throughout the country, have allowed ethanol fuel to achieve a 50% market share of the gasoline-powered fleet by April 2008.cite web|url= |title=ANP: consumo de álcool combustível é 50% maior em 2007 |author=Agência Brasil | date=2008-07-15|publisher=Invertia |accessdate=2008-08-09|language=Portuguese] cite web|url= |title=ANP estima que consumo de álcool supere gasolina |author=Gazeta Mercantil |year=2008|publisher=Agropecuária Brasil |accessdate=2008-08-09|language=Portuguese] Citation | last = Inslee, Jay; Bracken Hendricks | title = Apollo's Fire | year = 2007| pages=153-155, 160-161 | publisher = Island Press, Washington, D.C.| id = ISBN 978-1-59726-175-3 . "See Chapter 6. Homegrown Energy."] When trucks and other diesel-powered vehicles are considered, sugar cane based ethanol represented 18% of the country's total fuel consumption in 2006.cite web|url= |title=Brazil's energy plan examined |author=D. Sean Shurtleff | |date=2008-05-07|publisher=The Washington Times |accessdate=2008-05-10|language=] cite web|url= |title=2007 Brazilian Energy Balance: Executive Summary |author= | |date=|publisher=Ministério de Minas e Energia do Brasil |accessdate=2008-05-10|language=English Table 2. Report is based in 2006 data]

Historical background

Brazil is the world's largest exporter of ethanol, in 2007 exported 933.4 million gallons (3,532.7 million liters), representing almost 20% of its production, and accounts for almost 50% of the global exports. cite web |url= |title=Ethanol production from Sugar Cane in Brazil |publisher=Gröna Bilister|year=2006|language= |accessdate-=2008-05-10|format=PDF] Since 2004 Brazilian exporters have as their main customers the United States, Netherlands, Japan, Sweden, Jamaica, El Salvador, Costa Rica, Trinidad & Tobago, Nigeria, Mexico, India, and South Korea.

The countries in the Caribbean Basin import relative high quantities of Brazilian ethanol, but not much is destined for domestic consumption. These countries reprocess the product, usually converting Brazilian hydrated ethanol into anhydrous ethanol, and then re-export to the United States, gaining value-added and avoiding the 2.5 percent duty and the USD 0,54 per gallon tariff, thanks to the trade agreements and benefits granted by Caribbean Basin Initiative (CBI). This process is limited by a quota, set as 7% of U.S. ethanol consumption. [cite web|url=|title=Brazil's ethanol exports to rise in 2008:F.O.Licht|publisher=Reuters UK|date=2008-03-05|accessdate=2008-05-10|language= ] Although direct U.S. exports fell in 2007, imports from four CBI countries almost doubled, increasing from 15.5% in 2006 to 25.8% in 2007, reflecting increasing re-exports to the U.S., thus partially compensating the loss Brazilian direct exports to the U.S. This situation has caused some concerns in the United States, as this country and Brazil are trying to build a partnership to increase ethanol production in Latin American and the Caribbean. as the U.S. is encouraging "new ethanol production in other countries, production that could directly compete with U.S.-produced ethanol". [ cite web |url= |title=Grassley Expresses Concern Over Possible U.S.-Brazil Partnership on Ethanol|publisher=United States Senate|date=2007-03-02|author=Charles E. Grassley|accessdate=2008-05-11|format=PDF]

The U.S., potentially the largest market for the Brazilian ethanol, currently imposes trade restrictions on Brazilian ethanol of $USD 0.54 per gallon, in order to encourage domestic ethanol production, most of which has so far been based on processing corn instead of sugar cane or soybeans, which is much less efficient. There is concern that allowing the Brazilian ethanol to enter the U.S. market without taxation will undercut the budding ethanol industry in the United States [Letter from six Democratic Senators to President Bush at [] ] . One of the arguments for that is that Brazil currently subsidises its ethanol production, which is false, as the subsidies program finished in the 1990s [Report on at [] ] . Others argue that rather than impose trade restrictions on the import of the Brazilian product, that the U.S. should make subsidies of its own available to support its fledgling domestic producers. Exports of Brazilian ethanol to the U.S. reached a total of US$ 1 billion in 2006, an increase of 1,020% over 2005 (US$ 98 millions), [cite web| url=|publisher=Folha de São Paulo|title=Exportações de álcool para os EUA crescem mais de 900% em 2006 |language=Portuguese|date=2007-05-30|accessdate=2008-05-11] but fell significantly in 2007 due to sharp increases in American ethanol production from maize. [cite web|url= |title=Brazil local demand to drive ethanol production|author=Inae Riveras|date=2008-01-04|accessdate=2008-05-11] [cite web|url=|date=2007-12-04|title= Brazilian ethanol exports plummet 31 percent as US ethanol glut dampens trade |publisher=Biofuels Digest|accessdate=2008-05-11]

As shown in the table, together, the United States, the European Union, the CBI countries with Mexico, and Japan, were the destination of 91% of Brazilian ethanol exports, both in 2007 and 2006. As of 2007, the European Union region, led by the Netherlands, is the main importer of Brazilian ethanol, with 265.3 million gallons (1,004.2 million liters). However, and despite of reduced direct imports, the United States continues to be the single one country where Brazilian ethanol is exported, reaching 228.96 million gallons (866.6 million liters) to the continental U.S., 13.78 million gallons (52.1 million liters) shipped to the U.S. Virgin Islands, and 3.68 million gallons (14.0 million litters) shipped to Puerto Rico, for a total export for the U.S. in 2007 of 246.4 million gallons (932.75 million liters), down from 469.6 million gallons (1.77 billion liters) in 2006.

Effect on oil consumption

Most automobiles in Brazil run either on alcohol (E100) or on gasohol (E25) since the government made mandatory the use of 24% ethanol in the blend sold in the entire country. Since 2003, dual-fuel ("Flex-Fuel") or full flex-fuel vehicles that run on any proportion of ethanol and gasoline have been gaining popularity, reaching 6 million new cars and light commercial vehicles by August 2008, and 72% of car manufacturing production is dual-flex without additional cost for buyers. Customers have 49 models available to chose from. Brazilian full flex-fuel vehicles have electronic sensors that automatically detect the type of fuel and the blend mix, and accordingly adjust the engine combustion. Users have the freedom to choose depending on the free market prices of each fuel. Due to the lower energy content of ethanol fuel, full flex-fuel vehicles get fewer miles per gallon. Ethanol price has to be between 25-30% cheaper per gallon to reach the break even point. Since 2005, ethanol prices have been very competitive without any subsidies, even with gasoline prices kept constant in local currency since mid-2005, [cite web|url=|title=Brazil to hike fuel prices after 2-1/2 yr freeze|publisher=Reuters|date=2008-04-30|accessdate=2008-05-04|language= ] at a time when oil was just approaching USD 60 a barrel. The price ratio between gasoline and ethanol fuel has been well above 30% during this period, except during low sugar cane supply between harvests. According to Brazilian producers, ethanol can remain competitive if the price of oil does not fall below USD 30 a barrel.

Presently the use of ethanol as fuel by Brazilian cars - as pure ethanol and in gasohol - replaces gasoline at the rate of about 27,000 cubic metres per day, and by April 2008 surpassed 50% of the fuel that would be needed to run the light vehicle fleet on gasoline alone. In 2006 ethanol represented almost 20% of total fuel consumption in the road transport sector when trucks and other diesel-powered vehicles are considered.

However, the effect on the country's overall oil use was much smaller than that: domestic oil consumption still far outweighs ethanol consumption. In 2005, Brazil consumed convert|2000000|oilbbl|m3 of oil per day, versus convert|280000|oilbbl|m3 of ethanol. [US Dept. of Energy, " [ Country Analysis Briefs: Brazil] " (August 2006), Oil overview] Although Brazil is a major oil producer and now exports gasoline (19,000 m³/day), it still must import oil because of internal demand for other oil byproducts, chiefly diesel fuel (which cannot be easily replaced by ethanol).

According to government statistics Brazil produced 17.471 billion litres of ethanol in 2006, 23 billion litres in 2007 and in 2008, the Companhia Nacional de Abastecimento (Conab), expects a production growth around 14.97% and 19.46%, bringing the total ethanol production ranging from 26.45 to 27.9 billion litres. [ [ | title=Governo estima produção recorde de cana em 2008| Publisher=Agência Brasil] ]

Comparison with the United States

Brazil's sugar cane-based industry is far more efficient than the U.S. corn-based industry. Sugar cane ethanol has an energy balance 7 times greater than ethanol produced from corn. Brazilian distillers are able to produce ethanol for 22 cents per liter, compared with the 30 cents per liter for corn-based ethanol. ["The Economist", March 3-9th, 2007 "Fuel for Friendship" p. 44] Sugarcane cultivation requires a tropical or subtropical climate, with a minimum of 600 mm (24 in) of annual rainfall. Sugarcane is one of the most efficient photosynthesizers in the plant kingdom, able to convert up to 2% of incident solar energy into biomass. Sugarcane production in the United States occurs in Florida, Louisiana, Hawaii, and Texas. The first three plants to produce sugarcane-based ethanol are expected to go online in Louisiana by mid 2009. Sugar mill plants in Lacassine, St. James and Bunkie were converted to sugar cane-based ethanol production using Colombian technology in order to make possible a profitable ethanol production. These three plants will produce 100 million gallons of ethanol within five years. [cite web|url=|publisher=Miami Herald|author=Gerardo Reyes|title=Colombians in U.S. sugar mills to produce ethanol|date=2008-06-08|accessdate=2008-06-11|language=]

U.S. corn-derived ethanol costs 30% more because the corn starch must first be converted to sugar before being distilled into alcohol. Despite this cost differential in production, the U.S. does not import more Brazilian ethanol because of U.S. trade barriers corresponding to a tariff of 54-cent per gallon – a levy designed to offset the 51-cent per gallon blender's federal tax credit that is applied to ethanol no matter its country of origin. [ [ U.S. Congress Stands Behind Domestic Ethanol, Extends Tariff ] ] One advantage U.S. corn-derived ethanol offers is the ability to return 1/3 of the feedstock back into the market as a replacement for the corn used in the form of Distillers Dried Grain.

Ethanol diplomacy

In March 2007, "ethanol diplomacy" was the focus of President George W. Bush's Latin American tour, in which he and Brazil's president, Luiz Inacio Lula da Silva, were seeking to promote the production and use of sugar cane based ethanol throughout Latin America and the Caribbean. The two countries also agreed to share technology and set international standards for biofuels. The Brazilian sugar cane technology transfer will permit various Central American, such as Honduras, Nicaragua, Costa Rica and Panama, several Caribbean countries, and various Andean Countries tariff-free trade with the U.S. thanks to existing concessionary trade agreements. Even though the U.S. imposes a USD 0.54 tariff on every gallon of imported ethanol, the Caribbean nations and countries in the Central American Free Trade Agreement are exempt from such duties if they produce ethanol from crops grown in their own countries. The expectation is that using Brazilian technology for refining sugar cane based ethanol, such countries could become exporters to the United States in the short-term. [cite web |url= |title=U.S. and Brazil Seek to Promote Ethanol in West |publisher=The New York Times |author= Edmund L. Andrews and Larry Rother|date=2007-03-03 |accessdate=2008-04-28|language= ] In August 2007, Brazil's President toured Mexico and several countries in Central America and the Caribbean to promote Brazilian ethanol technology. [cite web |url= |title=Diplomacia de biocombustibles" de Lula no genera entusiasmo |publisher=La Nación | author= Diana Renée |date=2007-08-10 |accessdate=2008-04-28|language=Spanish]

The Memorandum of Understanding (MOU) that the American and Brazilian presidents signed in March 2007 has been described as a success for foreign policy, bringing Brazil and the United States closer especially on energy policy. Nevertheless, policy makers have cited a lack of "substantive progress" implementing the three pillars found in that agreement and have called for an expansion of international engagement beyond the executive branches. [cite web |url= |title=Brazil-U.S. Biofuels Cooperation: One Year Later |publisher=Brazil Institute of the Woodrow Wilson Center | author= Alan M. Wright |date=2008-06 |accessdate=2008-08-15|language=|format=PDF]

Environmental and social impacts

Environmental effects

The ethanol program has raised many environmental and social issues. Advancements in fertilizers and natural pesticides have all but eliminated the need to burn fields, however chemical pollution from runoff may turn out to be just as harmful to the environment as the smoke.Fact|date=September 2008

Sugarcane fields are traditionally burned just before harvest to avoid harm to the workers, by removing the sharp leaves and killing snakes and other harmful animals, and also to fertilize the fields with ash. There has been less burning due to pressure from the public and health authorities, and as a result of the recent development of effective harvesting machines. A 2001 state law banned burning in sugarcane fields in São Paulo state by 2021,cite web|url= |title=Câmara de Ribeirão rejeita lei inconstitucional pelo final da queima nos canaviais |author= |publisher= UNICA|date=2008-09-12 |accessdate=2008-09-14 |language=Portuguese ] and machines will gradually replace human labor as the means of harvesting cane, except where the abrupt terrain does not allow for mechanical harvesting. However, 150 out of 170 of São Paulo's sugar cane processing plants signed in 2007 a voluntary agreement with the state government to comply by 2014.cite web|url=|title=Antecipado prazo para fim das queimadas nos canaviais|author=Manoel Schlindwein |publisher= São Paulo State Government|date=2008-03-10 |accessdate=2008-09-14 |language=Portuguese ] Independent growers signed in 2008 the voluntary agreement to comply, and the deadline was extended to 2017 for sugar cane fields located in more abrupt terrain.cite web|url= |title=Brazil SP cane growers to ban burning by 2017 |author=Reuters |publisher= UK Yahoo News|date=2008-09-04 |accessdate=2008-09-14 |language=] By the 2008 harvest season, around 47% of the cane was collected with harvesting machines. Mechanization will reduce pollution from burning fields and have higher productivity than people, but also will create unemployment for these seasonal workers, many of them coming from the poorest regions of Brazil.Fact|date=October 2007

Other criticism focused on the potential for clearing rain forests and other environmentally valuable land for sugarcane production, such as the Amazonia, the Pantanal or the Cerrado.cite web|url= |title=Another Inconvenient Truth|author= |publisher=Oxfam |date=2008-06-28|accessdate=2008-08-06|language=Oxfam Briefing Paper 114.] cite journal|url=|title=Use of U.S. Croplands for Biofuels Increases Greenhouse Gases Through Emissions from Land-Use Change|author=Timothy Searchinger et al.|journal=Science | volume=319 |issue=5867 |pages=1238 - 1240 |date=2008-02-29| doi=10.1126/science.1151861|date=2008-02-29|accessdate=2008-05-09|language= Originally published online in Science Express on 7 February 2008. See Letters to "Science" by Wang and Haq. There are critics to these findings for assuming a worst case scenario.] cite journal|url= |title=Land Clearing and the Biofuel Carbon Debt |author=Fargione et al. |journal=Science | volume=319 |issue=5867 |pages=1235 - 1238 |date=2008-02-29 |accessdate=2008-08-06|language=|doi= 10.1126/science.1152747 Originally published online in Science Express on 7 February 2008. There are rebuttals to these findings for assuming a worst case scenario] Brazil's president, Luiz Inácio Lula da Silva claims this will not happen. According to him "The Portuguese discovered a long time ago that the Amazon isn't a place to plant cane." [cite web|author=Alan Clendenning|date=2007-07-10 |url=|title=Brazil: Ethanol farming won't impact Amazon rain forest|publisher=Oakland Tribune|language= ] In order to guarantee a sustainable development of ethanol production, the government is working on a countrywide zoning plan to restrict sugar cane growth in or near environmentally sensitive areas, allowing only the eight existing plants to remain operating in these sensitive areas, but without further extension of their sugar cane fields. [cite news |url= |title=Governo quer conter cana na Amazônia |publisher=Folha de São Paulo |date=2008-09-14 |author=Marta Salomon |accessdate=2008-09-14 |language=Portuguese Direct access to the Folha on line is by subscription only (the url corresponds to press clipping site from a research institute, Fundação Getúlio Vargas)] The proposed restricted area has 4.6 million square kilometers, almost half of the Brazilian territory.

ocial implications

Sugarcane has an important social contribution to the poorest people in Brazil. Although it still improves little the life conditions of this segment of Brazilian society, especially in comparison to industrialized countries living standards, having a temporary work at sugarcane harvest fields is, for many, the only option to survive.Fact|date=May 2008

There has been a great amount of harvest mechanization though, especially in the richest and more mature sugarcane producers of São Paulo state, thus dismissing hundreds of labor workers in place of air-conditioned sugarcane harvesting trucks.Fact|date=May 2008 As production sparks in other states in Brazil, mainly in the Northeast Region, where lack of job positions and social issues amount much further, to give incentives to coming sugarcane producers as long as they employ harvest workers instead of implementing less labor intensive and more modern techniques.Fact|date=September 2008

Some question the viability of biofuels like ethanol as total replacements for gasoline/crude oil. One concern is that sugarcane cultivation will displace other crops, thus causing food shortages. However, these concerns do not correspond to the current situation in Brazil. Despite having the world's largest sugarcane crop, the 45,000 km², Brazil currently devotes to sugarcane production amount to only about one percent of its total land area of some 8.5 million km². In addition, the country has more unused potential cropland than any other nation.Fact|date=September 2008

Effect on food prices

Some environmentalists, such as George Monbiot, have expressed fears that the marketplace will convert crops to fuel for the rich, while the poor starve and biofuels cause environmental problems.cite web|url=|title=Feeding Cars, Not People |author=George Monbiot||accessdate=2008-04-28|date=2004-11-23|language=] Environmental groups have raised concerns about this trade-off for several years. [cite web |url=|title=Biofuels no panacea |author=European Environmental Bureau|accessdate=2008-04-28|date=2006-02-08|language=|format=PDF] [cite web|url=|title=Food Security Worries Could Limit China Biofuels |author=Planet Ark|accessdate=2008-04-28|date=2005-09-26|language=] [cite web|url=|title= Biofuels: green dream or climate change nightmare |author=Greenpeace UK|accessdate=2008-04-28|date=2007-05-09|language=] The food vs fuel debate reached a global scale in 2008 as a result of the international community's concerns regarding the steep increase in food prices. On April 2008, Jean Ziegler, back then United Nations Special Rapporteur on the Right to Food, called biofuels a "crime against humanity", [cite web|url=|title=ONU diz que biocombustíveis são crime contra a humanidade|publisher=Folha de Sao Pãulo Online|date=2008-04-14|accessdate=2008-04-28|language=Portuguese] Cite web|url=|title=Brazil president defends biofuels|author=Emilio San Pedro
publisher=BBC News|date=2008-04-17|accessdate=2008-04-28|language=
] a claim he had previously made in October 2007, when he called for a 5-year ban for the conversion of land for the production of biofuels. [cite news|url=|date=2007-10-27|title=Production of biofuels 'is a crime'|first=Edith|last=Lederer|publisher=The Independent |accessdate=2008-04-22] [Cite web|url= |title=UN rapporteur calls for biofuel moratorium |author= |publisher=Swissinfo |date=2007-10-11|accessdate=2008-05-01|language= ] Also on April 2008, the World Bank's President, Robert Zoellick, stated that "While many worry about filling their gas tanks, many others around the world are struggling to fill their stomachs. And it's getting more and more difficult every day." [Cite news |url= |title=Poor go hungry while rich fill their tanks |author= Larry Elliott and Heather Stewart |publisher= The Guardian |date= 2008-04-11|accessdate=2008-04-30|language=] [Cite news|url= |title=Siphoning Off Corn to Fuel Our Cars |date=2008-04-30|publisher= The Washington Post|author= Steven Mufson |accessdate=2008-04-30|language=] [cite news|url=|title=FMI e Bird pedem ação urgente contra alta alimentar|publisher=Folha de Sao Pãulo Online|date=2008-04-13|accessdate=2008-04-28|language=Portuguese]

Luiz Inácio Lula da Silva gave a strong rebuttal, calling these claims "fallacies resulting from commercial interests", and putting the blame instead on U.S. and European agricultural subsidies, and a problem restricted to U.S. ethanol produced from maize. The Brazilian President has also claimed in several ocassions that his country's sugar cane based ethanol industry has not contributed to the food price crises. [Cite news|url=|title=Brazil Lula defends biofuels from growing criticism|author=Raymond Colitt|publisher=Reuters UK|date=2008-04-16|accessdate=2008-04-28|language= ] Cite news|url=|title=Ele é o falso vilão|author=Julia Duailibi|publisher=Veja Magazine|language=Portuguese|date=2008-04-27|accessdate=2008-04-28]

A report released by Oxfam in June 2008Cite web | url=|title=Another Inconvenient Truth: Biofuels are not the answer to climate or fuel crisis|publisher=Oxfam| author=Oxfam|language=|date=2008-06-25|accessdate=2008-07-30Report in pdf format] criticized biofuel policies of rich countries as neither a solution to the climate crisis nor the oil crisis, while contributing to the food price crisis. The report concluded that from all biofuels available in the market, Brazilian sugarcane ethanol is "far from perfect" but it is the most favorable biofuel in the world in term of cost and GHG balance. The report discusses some existing problems and potential risks, and asks the Brazilian government for caution to avoid jeopardazing its environmental and social sustainability. The report also says that: “"Rich countries spent up to $15 billion last year supporting biofuels while blocking cheaper Brazilian ethanol, which is far less damaging for global food security"."Cite web | url= |title=Another Inconvenient Truth: Biofuels are not the answer to climate or fuel crisis|publisher=Oxfam web site| author=Oxfam|language=|date=2008-06-26|accessdate=2008-07-30] [Cite web | url=|title=ONG diz que etanol brasileiro é melhor opção entre biocombustíveis |publisher=BBCBrasil| author= |language=Portuguese |date=2008-06-25|accessdate=2008-07-30]

A World Bank research report published on July 2008Cite web | url=|title=A note on Rising Food Crisis|publisher=The World Bank| author=Donald Mitchell|language=|month=July | year=2008|accessdate=2008-07-29Policy Research Working Paper No. 4682. Disclaimer: This paper reflects the findings, interpretation, and conclusions of the authors, and do not necessarily represent the views of the World Bank] found that from June 2002 to June 2008 "biofuels and the related consequences of low grain stocks, large land use shifts, speculative activity and export bans" pushed prices up by 70 percent to 75 percent . The study found that higher oil prices and a weak dollar explain 25-30% of total price rise. The study said that "...large increases in biofuels production in the United States and Europe are the main reason behind the steep rise in global food prices" and also stated that "Brazil's sugar-based ethanol did not push food prices appreciably higher".Cite news|url= |title=Etanol não influenciou nos preços dos alimentos
publisher=Editora Abril| author=Veja Magazine|language=Portuguese|date=2008-07-28|accessdate=2008-07-29
] Cite news|url=|title=Biofuels major driver of food price rise-World Bank |author=|publisher=Reuters|language=|date=2008-07-28|accessdate=2008-07-29] The report argues that increased production of biofuels in these developed regions were supported by subsidies and tariffs on imports, and considers that without such policies, price increases worldwide would have been smaller. This research paper also concluded that Brazil's sugar cane based ethanol has not raised sugar prices significantly, and recommends removing tariffs on ethanol imports by both the U.S. and E.U., to allow more efficient producers such as Brazil and other developing countries, including many African countries, to produce ethanol profitably for export to meet the mandates in the E.U. and U.S.

An economic assessment report also published in July 2008 by the OECDcite web|url=|title=Economic Assessment of Biofuel Support Policies |author=Directorate for Trade and Agriculture, OECD |publisher=OECD |date=2008-07-16|accessdate=2008-08-01|language=|format=PDF Disclaimer: This work was published under the responsibility of the Secretary-General of the OECD. The views expressed and conclusions reached do not necessarily correspond to those of the governments of OECD member countries.] agrees with the World Bank report regarding the negative effects of subsidies and trade restrictions, but found that the impact of biofuels on food prices are much smaller. The OECD study is also critical of the limited reduction of GHG emissions achieved from from biofuels produced in Europe and North America, concluding that the current biofuel support policies would reduce greenhouse gas emissions from transport fuel by no more than 0.8 percent by 2015, while Brazilian ethanol from sugar cane reduces greenhouse gas emissions by at least 80 percent compared to fossil fuels. The assessment calls on governments for more open markets in biofuels and feedstocks in order to improve efficiency and lower costs.cite web|url=,3343,en_2649_37401_41013916_1_1_1_1,00.html|title=Biofuel policies in OECD countries costly and ineffective, says report |author=Directorate for Trade and Agriculture, OECD |publisher=OECD|date=2008-07-16|accessdate=2008-08-01|language=]

ee also

*Ethanol fuel in the United States
*Ethanol fuel in Australia
*Ethanol fuel in Sweden
*Ethanol fuel in the Philippines
*Common ethanol fuel mixtures
*Flexible-fuel vehicle
*List of renewable energy topics by country


External links

* [ BBC News video segment on ethanol in Brazil]
* [,,contentMDK:21501336~pagePK:64167689~piPK:64167673~theSitePK:2795143,00.html Biofuels: The Promise and the Risks. The World Bank's World Development Report 2008: Agriculture for Development]
* [ Biofuelwatch on Ethanol in Brazil]
* [ Brazil Institute: Biofuels Central.WWICS]
* [ Brazil priming ethanol initiative to supply fuel-thirsty Japan]
* [ The Brazilian biofuels industry (2008 status)]
* [ CDM Potential in Brazil, by S. Meyers, J. Sathaye et al.]
* [ CNBC's Yergin: What the U.S. Can Learn From Brazil About Ethanol By|07 Jun 2007|12:33 PM ET]
* [ Cogeneration in Ethanol Plants by P. M. Nastari]
* [ Future of Brazil Ethanol, BioFuel Industry]
* [ Structure, Players in Brazil Ethanol and BioFuels]
* [ Surveys of Brazil Ethanol and BioFuels]
* [ UNICA - Brazilian Sugarcane growers assoc.] (in Portuguese) and its [ machine translation]

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