Ethanol fuel in Brazil - AbsoluteAstronomy.com

Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...

is the world's second largest producer of ethanol fuel

Ethanol fuel

Ethanol fuel is ethanol , the same type of alcohol found in alcoholic beverages. It is most often used as a motor fuel, mainly as a biofuel additive for gasoline. World ethanol production for transport fuel tripled between 2000 and 2007 from 17 billion to more than 52 billion litres...

and the world's largest exporter. Together, Brazil and the United States

United States

The United States of America is a federal constitutional republic comprising fifty states and a federal district...

lead the industrial production of ethanol fuel, accounting together for 87.8% of the world's production in 2010. In 2010 Brazil produced 26.2 billion litres (6.92 billion U.S. liquid gallons

Gallon

The gallon is a measure of volume. Historically it has had many different definitions, but there are three definitions in current use: the imperial gallon which is used in the United Kingdom and semi-officially within Canada, the United States liquid gallon and the lesser used United States dry...

), representing 30.1% of the world's total ethanol used as fuel.

Brazil is considered to have the world's first sustainable biofuel

Biofuel

Biofuel is a type of fuel whose energy is derived from biological carbon fixation. Biofuels include fuels derived from biomass conversion, as well as solid biomass, liquid fuels and various biogases...

s economy and the biofuel industry leader, a policy model for other countries; and its sugarcane ethanol "the most successful alternative fuel
Alternative fuel
Alternative fuels, known as non-conventional or advanced fuels, are any materials or substances that can be used as fuels, other than conventional fuels...

to date." However, some authors consider that the successful Brazilian ethanol model is sustainable only in Brazil due to its advanced agri-industrial technology and its enormous amount of arable land available; while according to other authors it is a solution only for some countries in the tropical zone of Latin America

Latin America

Latin America is a region of the Americas where Romance languages – particularly Spanish and Portuguese, and variably French – are primarily spoken. Latin America has an area of approximately 21,069,500 km² , almost 3.9% of the Earth's surface or 14.1% of its land surface area...

, the Caribbean

Caribbean

The Caribbean is a crescent-shaped group of islands more than 2,000 miles long separating the Gulf of Mexico and the Caribbean Sea, to the west and south, from the Atlantic Ocean, to the east and north...

, and Africa

Africa

Africa is the world's second largest and second most populous continent, after Asia. At about 30.2 million km² including adjacent islands, it covers 6% of the Earth's total surface area and 20.4% of the total land area...

Brazil’s 36-year-old ethanol fuel program is based on the most efficient agricultural technology for sugarcane cultivation in the world, uses modern equipment and cheap sugar cane as feedstock, the residual cane-waste (bagasse

Bagasse

Bagasse is the fibrous matter that remains after sugarcane or sorghum stalks are crushed to extract their juice. It is currently used as a biofuel and as a renewable resource in the manufacture of pulp and paper products and building materials....

) is used to process heat and power, which results in a very competitive price and also in a high energy balance

Net energy gain

Net Energy Gain is a concept used in energy economics that refers to the difference between the energy expended to harvest an energy source and the amount of energy gained from that harvest. The net energy gain, which can be expressed in joules, differs from the net financial gain that may result...

(output energy/input energy), which varies from 8.3 for average conditions to 10.2 for best practice production. In 2010, the U.S. EPA designated Brazilian sugarcane ethanol as an advanced biofuel due to its 61% reduction of total life cycle

Life cycle assessment

A life-cycle assessment is a technique to assess environmental impacts associated with all the stages of a product's life from-cradle-to-grave A life-cycle assessment (LCA, also known as life-cycle analysis, ecobalance, and cradle-to-grave analysis) is a technique to assess environmental impacts...

greenhouse gas emissions, including direct indirect land use change emissions.

There are no longer any light vehicles in Brazil running on pure gasoline. Since 1976 the government made it mandatory to blend anhydrous

Anhydrous

As a general term, a substance is said to be anhydrous if it contains no water. The way of achieving the anhydrous form differs from one substance to another...

ethanol with gasoline, fluctuating between 10% to 22%. and requiring just a minor adjustment on regular gasoline engines. In 1993 the mandatory blend was fixed by law at 22% anhydrous ethanol (E22) by volume in the entire country, but with leeway to the Executive to set different percentages of ethanol within pre-established boundaries. In 2003 these limits were set at a minimum of 20% and a maximum of 25%. Since July 1, 2007 the mandatory blend is 25% of anhydrous ethanol and 75% gasoline or E25 blend. The lower limit was reduced to 18% in April 2011 due to recurring ethanol supply shortages and high prices that take place between harvest seasons.

The Brazilian car manufacturing industry developed flexible-fuel vehicle

Flexible-fuel vehicle

A flexible-fuel vehicle or dual-fuel vehicle is an alternative fuel vehicle with an internal combustion engine designed to run on more than one fuel, usually gasoline blended with either ethanol or methanol fuel, and both fuels are stored in the same common tank...

s that can run on any proportion of gasoline (E20-E25 blend) and hydrous ethanol (E100). Introduced in the market in 2003, flex vehicles became a commercial success, reaching a record 92.3% share of all new cars and light vehicle sales for 2009. By December 2009 they represented 39% of Brazil's registered Otto cycle

Otto engine

-Otto Engine Types:There are three types of internal combustion engines designed by German inventors Nikolaus August Otto and his partner Eugen Langen. They are the 1862 compression engine, which failed, the 1864 atmospheric engine, and the engine known today as the "Gasoline Engine", the Otto...

light motor vehicle fleet, and the cumulative production of flex-fuel cars and light commercial vehicles reached the milestone of 10 million vehicles in March 2010, with 70 flex models available in the market by mid 2010 from 11 major carmakers. The success of "flex" vehicles, together with the mandatory E25 blend throughout the country, have allowed ethanol fuel consumption in the country to achieve a 50% market share of the gasoline-powered fleet by February 2008. In terms of energy equivalent, sugarcane ethanol represented 17.6% of the country's total energy consumption by the transport sector in 2008.

History

Historical evolution of ethanol blends used in Brazil (1976–2010)
Year	Ethanol blend	Year	Ethanol blend	Year	Ethanol blend
1931	E5	1989	E18-22-13	2004	E20
1976	E11	1992	E13	2005	E22
1977	E10	1993-98	E22	2006	E20
1978	E18-20-23	1999	E24	2007	E23-25
1981	E20-12-20	2000	E20	2008	E25
1982	E15	2001	E22	2009	E25
1984-86	E20	2002	E24-25	2010	E20-25
1987-88	E22	2003	E20-25	2011	E18-25
Source: J.A. Puerto Rica (2007), Table 3.8, pp. 81–82 Note: The 2010 reduction from E25 to E20 was temporary and took place between February and April. In April 2011 the lower blend floor was reduced to E18.

Sugarcane

Sugarcane refers to any of six to 37 species of tall perennial grasses of the genus Saccharum . Native to the warm temperate to tropical regions of South Asia, they have stout, jointed, fibrous stalks that are rich in sugar, and measure two to six metres tall...

has been cultivated in Brazil since 1532 as sugar was one of the first commodities exported to Europe by the Portuguese settlers. The first use of sugarcane ethanol as a fuel in Brazil dates back to the late twenties and early thirties of the twentieth century, with the introduction of the automobile in the country. Ethanol fuel production peaked during World War II

World War II

World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...

and, as German submarine attacks threatened oil supplies, the mandatory blend became as high as 50% in 1943.
After the end of the war cheap oil caused gasoline to prevail, and ethanol blends were only used sporadically, mostly to take advantage of sugar surpluses, until the seventies, when the first oil crisis

1973 oil crisis

The 1973 oil crisis started in October 1973, when the members of Organization of Arab Petroleum Exporting Countries or the OAPEC proclaimed an oil embargo. This was "in response to the U.S. decision to re-supply the Israeli military" during the Yom Kippur war. It lasted until March 1974. With the...

resulted in gasoline shortages and awareness of the dangers of oil dependence. As a response to this crisis, the Brazilian government began promoting bioethanol as a fuel. The National Alcohol Program -Pró-Álcool- , launched in 1975, was a nation-wide program financed by the government to phase out automobile fuels derived from fossil fuels, such as gasoline, in favor of ethanol produced from sugar cane.

The first phase of the program concentrated on production of anhydrous ethanol for blending with gasoline

Common ethanol fuel mixtures

There are several common ethanol fuel mixtures in use around the world. The use of pure hydrous or anhydrous ethanol in internal combustion engines is only possible if the engine is designed or modified for that purpose...

. The Brazilian government made mandatory the blending of ethanol fuel with gasoline, fluctuating from 1976 until 1992 between 10% to 22%. Due to this mandatory minimum gasoline blend, pure gasoline (E0

Common ethanol fuel mixtures

) is no longer sold in the country. A federal law was passed in October 1993 establishing a mandatory blend of 22% anhydrous ethanol (E22) in the entire country. This law also authorized the Executive to set different percentages of ethanol within pre-established boundaries; and since 2003 these limits were fixed at a maximum of 25% (E25) and a minimum of 20% (E20) by volume. Since then, the government has set the percentage of the ethanol blend according to the results of the sugarcane

Sugarcane

harvest and the levels of ethanol production from sugarcane, resulting in blend variations even within the same year.

Since July 2007 the mandatory blend is 25% of anhydrous ethanol and 75% gasoline or E25 blend. However, in 2010, and as a result of supply concerns and high ethanol fuel prices, the government mandated a temporary 90-day blend reduction from E25 to E20 beginning February 1, 2010.

After testing in government fleets with several prototypes developed by the local carmakers, and compelled by the second oil crisis

1979 energy crisis

The 1979 oil crisis in the United States occurred in the wake of the Iranian Revolution. Amid massive protests, the Shah of Iran, Mohammad Reza Pahlavi, fled his country in early 1979 and the Ayatollah Khomeini soon became the new leader of Iran. Protests severely disrupted the Iranian oil...

, the Fiat 147

Fiat 147

The Fiat 147 was a three door hatchback compact car produced by Fiat in the Brazilian state of Minas Gerais from 1976 until 1986, when it was replaced by the Fiat Uno. It was the Brazilian variant of the Fiat 127...

, the first modern commercial neat ethanol car (E100 only) was launched to the market in July 1979. The Brazilian government provided three important initial drivers for the ethanol industry: guaranteed purchases by the state-owned oil company Petrobras

Petrobras

Petróleo Brasileiro or Petrobras is a semi-public Brazilian multinational energy corporation headquartered in Rio de Janeiro, Brazil. It is the largest company in Latin America by market capitalization and revenue, and the largest company headquartered in the Southern Hemisphere by market...

, low-interest loans for agro-industrial ethanol firms, and fixed gasoline and ethanol prices where hydrous ethanol sold for 59% of the government-set gasoline price at the pump. Subsidising ethanol production in this manner and setting an artificially low price established ethanol as an alternative to gasoline.

After reaching more than 4 million cars and light trucks running on pure ethanol by the late 1980s, representing one third of the country's motor vehicle fleet, ethanol production and sales of ethanol-only cars tumbled due to several factors. First, gasoline prices fell sharply as a result of lower gasoline prices, but mainly because of a shortage of ethanol fuel supply in the local market left thousands of vehicles in line at gas stations or out of fuel in their garages by mid 1989. As supply could not keep pace with the increasing demand required by the now significant ethanol-only fleet, the Brazilian government began importing ethanol in 1991.

Confidence on ethanol-powered vehicles was restored only with the introduction in the Brazilian market of flexible-fuel vehicle

Flexible-fuel vehicle

s. In March 2003 Volkswagen

Volkswagen

Volkswagen is a German automobile manufacturer and is the original and biggest-selling marque of the Volkswagen Group, which now also owns the Audi, Bentley, Bugatti, Lamborghini, SEAT, and Škoda marques and the truck manufacturer Scania.Volkswagen means "people's car" in German, where it is...

launched in the Brazilian market the Gol

Volkswagen Gol

The Volkswagen Gol is a subcompact car manufactured by Volkswagen do Brasil since 1980 as Volkswagen's entry-level car in the South American market—where it succeeded the South American VW Beetle ...

1.6 Total Flex, the first commercial flexible fuel vehicle capable of running on any blend of gasoline and ethanol. By 2010 manufacturers that build flexible fuel vehicles include Chevrolet

Chevrolet

Chevrolet , also known as Chevy , is a brand of vehicle produced by General Motors Company . Founded by Louis Chevrolet and ousted GM founder William C. Durant on November 3, 1911, General Motors acquired Chevrolet in 1918...

, Fiat

Fiat

FIAT, an acronym for Fabbrica Italiana Automobili Torino , is an Italian automobile manufacturer, engine manufacturer, financial, and industrial group based in Turin in the Italian region of Piedmont. Fiat was founded in 1899 by a group of investors including Giovanni Agnelli...

, Ford

Ford Motor Company

Ford Motor Company is an American multinational automaker based in Dearborn, Michigan, a suburb of Detroit. The automaker was founded by Henry Ford and incorporated on June 16, 1903. In addition to the Ford and Lincoln brands, Ford also owns a small stake in Mazda in Japan and Aston Martin in the UK...

, Peugeot

Peugeot

Peugeot is a major French car brand, part of PSA Peugeot Citroën, the second largest carmaker based in Europe.The family business that precedes the current Peugeot company was founded in 1810, and manufactured coffee mills and bicycles. On 20 November 1858, Emile Peugeot applied for the lion...

, Renault

Renault

Renault S.A. is a French automaker producing cars, vans, and in the past, autorail vehicles, trucks, tractors, vans and also buses/coaches. Its alliance with Nissan makes it the world's third largest automaker...

, Volkswagen

Volkswagen

, Honda

Honda

is a Japanese public multinational corporation primarily known as a manufacturer of automobiles and motorcycles.Honda has been the world's largest motorcycle manufacturer since 1959, as well as the world's largest manufacturer of internal combustion engines measured by volume, producing more than...

, Mitsubishi

Mitsubishi

The Mitsubishi Group , Mitsubishi Group of Companies, or Mitsubishi Companies is a Japanese multinational conglomerate company that consists of a range of autonomous businesses which share the Mitsubishi brand, trademark and legacy...

, Toyota, Citröen

Citroën

Citroën is a major French automobile manufacturer, part of the PSA Peugeot Citroën group.Founded in 1919 by French industrialist André-Gustave Citroën , Citroën was the first mass-production car company outside the USA and pioneered the modern concept of creating a sales and services network that...

, Nissan, and Kia Motors

Kia Motors

Kia Motors , headquartered in Seoul, is South Korea's second-largest automobile manufacturer, following the Hyundai Motor Company, with sales of over 1.4 million vehicles in 2010...

.

Flexible fuel cars were 22% of the car sales in 2004, 73% in 2005, 87.6% in July 2008, and reached a record 94% in August 2009. The cumulative production of flex-fuel cars and light commercial vehicles reached the milestone of 10 million vehicles in March 2010. The rapid adoption and commercial success of "flex" vehicles, as they are popularly known, together with the mandatory blend of alcohol with gasoline as E25 fuel, have increased ethanol consumption up to the point that by February 2008 a landmark in ethanol consumption was achieved when ethanol retail sales surpassed the 50% market share of the gasoline-powered fleet. This level of ethanol fuel consumption had not been reached since the end of the 1980s, at the peak of the Pró-Álcool Program. From 1979 until December 2010, Brazil has substituted more than 18 million pure gasoline-powered vehicles with 5.7 million neat ethanol vehicles, almost 12 million flex-fuel light vehicles, and 515.7 thousand flex-fuel motorcycles. The number of neat ethanol vehicles still in use is estimated between 2 to 3 million vehicles.

Under the auspices of the BioEthanol for Sustainable Transport (BEST)

BioEthanol for Sustainable Transport

BioEthanol for Sustainable Transport was a four-year project financially supported by the European Union for promoting the introduction and market penetration of bioethanol as a vehicle fuel, and the introduction and wider use of flexible-fuel vehicles and ethanol-powered vehicles on the world...

project, the first ethanol-powered (ED95) bus began operations in São Paulo city on December 2007 as a one-year trial project. A second ED95 trial bus began operating in São Paulo

São Paulo

São Paulo is the largest city in Brazil, the largest city in the southern hemisphere and South America, and the world's seventh largest city by population. The metropolis is anchor to the São Paulo metropolitan area, ranked as the second-most populous metropolitan area in the Americas and among...

city in November 2009.
Based on the satisfactory results obtained during the 3-year trial operation of the two buses, in November 2010 the municipal government of São Paulo

São Paulo

city signed an agreement with UNICA

UNICA, Brazil

UNICA , the Brazilian Sugarcane Industry Association, is a lobbying organization of producers of sugarcane and ethanol fuel. UNICA members are responsible for more than 50% of all ethanol produced in Brazil and 60% of overall sugar production....

, Cosan

Cosan

Cosan is a public company, a Brazilian conglomerate producer of bioethanol, sugar and energy.-Biography:Cosan began in 1936 in Piracicaba city in State of São Paulo, with the founding of its first factory for milling of sugar cane...

, Scania

Scania

Scania is the southernmost of the 25 traditional non-administrative provinces of Sweden, constituting a peninsula on the southern tip of the Scandinavian peninsula, and some adjacent islands. The modern administrative subdivision Skåne County is almost, but not totally, congruent with the...

and Viação Metropolitana", the local bus operator, to introduced a fleet of 50 ethanol-powered ED95 buses by May 2011. The local government objective is for the city's entire bus fleet, which is made of 15,000 diesel-powered buses, to use only renewable fuels by 2018. The first ethanol-powered buses were delivered in May 2011, and the 50 ethanol-powered ED95 buses are scheduled to begin regular service in São Paulo in June 2011.

Another innovation of the Brazilian flexible-fuel technology was the development of flex-fuel motorcycles. The first flex motorcycle was launched by Honda

Honda

in March 2009. Produced by its Brazilian subsidiary Moto Honda da Amazônia, the CG 150 Titan Mix is sold for around US$2,700. In order to avoid cold start problems, the fuel tank must have at least 20% of gasoline at temperatures below 15 °C (59 °F). In September 2009, Honda launched a second flexible-fuel motorcycle, the on-off road NXR 150 Bros Mix. By December 2010 both Honda flexible-fuel motorcycles had reached cumulative sales of 515,726 units, representing a 18.1% market share of the Brazilian new motorcycle sales in 2010.

Economic and production indicators

Brazilian ethanol production^(a)^(b) (2004–2010) (Millions of U.S. gallons Gallon The gallon is a measure of volume. Historically it has had many different definitions, but there are three definitions in current use: the imperial gallon which is used in the United Kingdom and semi-officially within Canada, the United States liquid gallon and the lesser used United States dry... )
2004	2005	2006	2007	2008	2009	2010
3,989	4,227	4,491	5,019	6,472	6,578	6,922
Note: (a) 2004-06 for all grades. (b) 2007-10 ethanol fuel only.

Ethanol production in Brazil uses sugarcane as feedstock and relies on first-generation technologies based on the use of the sucrose

Sucrose

Sucrose is the organic compound commonly known as table sugar and sometimes called saccharose. A white, odorless, crystalline powder with a sweet taste, it is best known for its role in human nutrition. The molecule is a disaccharide composed of glucose and fructose with the molecular formula...

content of sugarcane. Ethanol yield has grown 3.77% per year since 1975 and productivity gains been based on improvements in the agricultural and industrial phases of the production process. Further improvements on best practices are expected to allow in the short to mid-term an average ethanol productivity of 9,000 liter

Litér

- External links :*...

s per hectare

Hectare

The hectare is a metric unit of area defined as 10,000 square metres , and primarily used in the measurement of land. In 1795, when the metric system was introduced, the are was defined as being 100 square metres and the hectare was thus 100 ares or 1/100 km2...

.

There were 378 ethanol plants operating in Brazil by July 2008, 126 dedicated to ethanol production and 252 producing both sugar and ethanol. There are 15 additional plants dedicated exclusively to sugar production. These plants have an installed capacity of crushing 538 million metric tons of sugarcane per year, and there are 25 plants under construction expected to be on line by 2009 that will add an additional capacity of crushing 50 million tons of sugarcane per year. The typical plant cost approximately USD 150 million and requires a nearby sugarcane plantation of 30,000 hectares.

Ethanol production is concentrated in the Central

Center-West Region, Brazil

The Central-West Region of Brazil is composed of the states of Goiás, Mato Grosso and Mato Grosso do Sul; along with Distrito Federal , where Brazil's national capital, Brasília, is situated...

and Southeast

Southeast Region, Brazil

The Southeast Region of Brazil is composed by the states of Espírito Santo, Minas Gerais, Rio de Janeiro and São Paulo. It is the richest region of the country, responsible for approximately 60% of the Brazilian GDP. São Paulo, Rio de Janeiro and Minas Gerais are three richest states of Brazil,...

regions of the country, led by São Paulo state

São Paulo (state)

São Paulo is a state in Brazil. It is the major industrial and economic powerhouse of the Brazilian economy. Named after Saint Paul, São Paulo has the largest population, industrial complex, and economic production in the country. It is the richest state in Brazil...

, with around 60% of the country's total ethanol production, followed by Paraná

Paraná (state)

Paraná is one of the states of Brazil, located in the South of the country, bordered on the north by São Paulo state, on the east by the Atlantic Ocean, on the south by Santa Catarina state and the Misiones Province of Argentina, and on the west by Mato Grosso do Sul and the republic of Paraguay,...

(8%), Minas Gerais

Minas Gerais

Minas Gerais is one of the 26 states of Brazil, of which it is the second most populous, the third richest, and the fourth largest in area. Minas Gerais is the Brazilian state with the largest number of Presidents of Brazil, the current one, Dilma Rousseff, being one of them. The capital is the...

(8%) and Goiás

Goiás

Goiás is a state of Brazil, located in the central part of the country. The name Goiás comes from the name of an indigenous community...

(5%). These two regions have been responsible for 90% of Brazil's ethanol production since 2005 and the harvest season goes from April to November. The Northeast Region

Northeast Region, Brazil

The Northeast Region of Brazil is composed of the following states: Maranhão, Piauí, Ceará, Rio Grande do Norte, Paraíba, Pernambuco, Alagoas, Sergipe and Bahia, and it represents 18.26% of the Brazilian territory....

is responsible for the remaining 10% of ethanol production, led by Alagoas

Alagoas

Alagoas is one of the 27 federative units of Brazil and is situated in the eastern part of the Northeast Region. It borders: Pernambuco ; Sergipe ; Bahia ; and the Atlantic Ocean . It occupies an area of 27,767 km², being slightly larger than Haiti...

with 2% of total production. The harvest season in the North-Northeast region goes from September to March, and the average productivity in this region is lower than the South-Central region. Due to the difference in the two main harvest seasons, Brazilian statistics for sugar and ethanol production are commonly reported on a harvest two-year basis rather than on a calendar year.

For the 2008/09 harvest it is expected that about 44% of the sugarcane will be used for sugar, 1% for alcoholic beverage

Alcoholic beverage

An alcoholic beverage is a drink containing ethanol, commonly known as alcohol. Alcoholic beverages are divided into three general classes: beers, wines, and spirits. They are legally consumed in most countries, and over 100 countries have laws regulating their production, sale, and consumption...

s, and 55% for ethanol production. An estimate of between 24.9 billion litres (6.58 billion U.S. liquid gallons

Gallon

) to 27.1 billion litres (7.16 billion gallons) of ethanol are expected to be produced in 2008/09 harvest year, with most of the production being destined for the internal market, and only 4.2 billion liters (1.1 billion gallons) for exports, with an estimated 2.5 billion liters (660 million gallons) destined for the US market. Sugarcane cultivated area grew from 7 million to 7.8 million hectares of land from 2007 to 2008, mainly using abandoned pasture lands. In 2008 Brazil has 276 million hectares of arable land, 72% use for pasture, 16.9% for grain crops, and 2.8% for sugarcane, meaning that ethanol is just requiring approximately 1.5% of all arable land available in the country.

As sugar and ethanol share the same feedstock and their industrial processing is fully integrated, formal employment statistics are usually presented together. In 2000 there were 642,848 workers employed by these industries, and as ethanol production expanded, by 2005 there were 982,604 workers employed in the sugarcane cultivation and industrialization, including 414,668 workers in the sugarcane fields, 439,573 workers in the sugar mills, and 128,363 workers in the ethanol distilleries. While employment in the ethanol distilleries grew 88.4% from 2000 to 2005, employment in the sugar fields just grew 16.2% as a direct result of expansion of mechanical harvest instead manual harvesting, which avoids burning the sugarcane fields before manual cutting and also increases productivity. The states with the most employment in 2005 were São Paulo (39.2%), Pernambuco

Pernambuco

Pernambuco is a state of Brazil, located in the Northeast region of the country. To the north are the states of Paraíba and Ceará, to the west is Piauí, to the south are Alagoas and Bahia, and to the east is the Atlantic Ocean. There are about of beaches, some of the most beautiful in the...

(15%), Alagoas (14.1%), Paraná (7%), and Minas Gerais (5.6%).

Agricultural technology

A key aspect for the development of the ethanol industry in Brazil was the investment in agricultural research and development

Research and development

The phrase research and development , according to the Organization for Economic Co-operation and Development, refers to "creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society, and the use of this stock of...

by both the public and private sector. The work of EMBRAPA, the state-owned company in charge for applied research on agriculture, together with research developed by state institutes and universities, especially in the State of São Paulo, have allowed Brazil to become a major innovator in the fields of biotechnology

Biotechnology

Biotechnology is a field of applied biology that involves the use of living organisms and bioprocesses in engineering, technology, medicine and other fields requiring bioproducts. Biotechnology also utilizes these products for manufacturing purpose...

and agronomic practices, resulting in the most efficient agricultural technology for sugarcane cultivation in the world. Efforts have been concentrated in increasing the efficiency of inputs and processes to optimize output per hectare of feedstock, and the result has been a threefold increase of sugarcane yields in 29 years, as Brazilian average ethanol yields went from 2,024 liters per ha in 1975 to 5,917 liters per ha in 2004; allowing the efficiency of ethanol production to grow at a rate of 3.77% per year. Brazilian biotechnologies include the development of sugarcane varieties that have a larger sugar or energy content, one of the main drivers for high yields of ethanol per unit of planted area. The increase of the index total recoverable sugar (TRS) from sugarcane has been very significant, 1.5% per year in the period 1977 to 2004, resulting in an increase from 95 to 140 kg/ha. Innovations in the industrial process have allowed an increase in sugar extraction in the period 1977 to 2003. The average annual improvement was 0.3%; some mills have already reached extraction efficiencies of 98%.

Biotechnology research and genetic improvement have led to the development of strains which are more resistant to disease, bacteria, and pests, and also have the capacity to respond to different environments, thus allowing the expansion of sugarcane cultivation to areas previously considered inaqueate for such cultures. By 2008 more than 500 sugarcane varieties are cultivated in Brazil, and 51 of them were released just during the last ten years. Four research programs, two private and two public, are devoted to further genetic improvement. Since the mid nineties, Brazilian biotechnology laboratories have developed transgenic varieties, still non commerciallized. Identification of 40,000 cane genes was completed in 2003 and there are a couple dozen research groups working on the functional genome

Genome

In modern molecular biology and genetics, the genome is the entirety of an organism's hereditary information. It is encoded either in DNA or, for many types of virus, in RNA. The genome includes both the genes and the non-coding sequences of the DNA/RNA....

, still on the experimental phase, but commercial results are expected within five years.

Also, there is ongoing research regarding sugarcane biological nitrogen

Nitrogen

Nitrogen is a chemical element that has the symbol N, atomic number of 7 and atomic mass 14.00674 u. Elemental nitrogen is a colorless, odorless, tasteless, and mostly inert diatomic gas at standard conditions, constituting 78.08% by volume of Earth's atmosphere...

fixation, with the most promising plant varieties showing yields three times the national average in soils of very low fertility, thus avoiding nitrogenous fertilization. There is also research for the development of second-generation or cellulosic ethanol

Cellulosic ethanol

Cellulosic ethanol is a biofuel produced from wood, grasses, or the non-edible parts of plants.It is a type of biofuel produced from lignocellulose, a structural material that comprises much of the mass of plants. Lignocellulose is composed mainly of cellulose, hemicellulose and lignin...

. In São Paulo state an increase of 12% in sugar cane yield and 6.4% in sugar content is expected over the next decade. This advance combined with an expected 6.2% improvement in fermentation efficiency and 2% in sugar extraction, may increase ethanol yields by 29%, raising average ethanol productivity to 9,000 liters/ha. Approximately US$50 million has recently been allocated for research and projects focused on advancing the obtention of ethanol from sugarcane in São Paulo state.

Production process

Sucrose

extracted from sugarcane accounts for little more than 30% of the chemical energy stored in the mature plant; 35% is in the leaves and stem tips, which are left in the fields during harvest, and 35% are in the fibrous material (bagasse

Bagasse

) left over from pressing. Most of the industrial process

Industrial process

Industrial processes are procedures involving chemical or mechanical steps to aid in the manufacture of an item or items, usually carried out on a very large scale. Industrial processes are the key components of heavy industry....

ing of sugarcane in Brazil is done through a very integrated production chain, allowing sugar production, industrial ethanol processing, and electricity generation from byproducts. The typical steps for large scale production of sugar and ethanol include milling

Mill (grinding)

A grinding mill is a unit operation designed to break a solid material into smaller pieces. There are many different types of grinding mills and many types of materials processed in them. Historically mills were powered by hand , working animal , wind or water...

, electricity generation

Electricity generation

Electricity generation is the process of generating electric energy from other forms of energy.The fundamental principles of electricity generation were discovered during the 1820s and early 1830s by the British scientist Michael Faraday...

, fermentation

Fermentation (biochemistry)

Fermentation is the process of extracting energy from the oxidation of organic compounds, such as carbohydrates, using an endogenous electron acceptor, which is usually an organic compound. In contrast, respiration is where electrons are donated to an exogenous electron acceptor, such as oxygen,...

, distillation

Distillation

Distillation is a method of separating mixtures based on differences in volatilities of components in a boiling liquid mixture. Distillation is a unit operation, or a physical separation process, and not a chemical reaction....

of ethanol, and dehydration

Dehydration

In physiology and medicine, dehydration is defined as the excessive loss of body fluid. It is literally the removal of water from an object; however, in physiological terms, it entails a deficiency of fluid within an organism...

Milling and refining

Once harvested, sugarcane is usually transported to the plant by semi-trailer truck

Semi-trailer truck

A semi-trailer truck, also known as a semi, tractor-trailer, or articulated truck or articulated lorry, is an articulated vehicle consisting of a towing engine , and a semi-trailer A semi-trailer truck, also known as a semi, tractor-trailer, or (in the United Kingdom and Ireland) articulated truck...

s. After quality control

Quality control

Quality control, or QC for short, is a process by which entities review the quality of all factors involved in production. This approach places an emphasis on three aspects:...

sugarcane is washed, chopped, and shredded by revolving knives. The feedstock is fed to and extracted by a set of mill combinations
to collect a juice, called garapa

Garapa

Garapa or Caldo de cana is the Brazilian Portuguese term for the juice of raw sugar cane. Sugar cane juice is consumed as a beverage worldwide, and especially in regions where sugarcane is commercially grown such as Southeast Asia, South Asia, and Latin America...

in Brazil, that contain 10–15% sucrose, and bagasse

Bagasse

, the fiber residue. The main objective of the milling process is to extract the largest possible amount of sucrose from the cane, and a secondary but important objective is the production of bagasse with a low moisture content as boiler fuel, as bagasse is burned for electricity generation (see below), allowing the plant to be self-sufficient in energy and to generate electricity for the local power grid.
The cane juice or garapa is then filtered and treated by chemicals and pasteurized. Before evaporation

Evaporation

Evaporation is a type of vaporization of a liquid that occurs only on the surface of a liquid. The other type of vaporization is boiling, which, instead, occurs on the entire mass of the liquid....

, the juice is filtered once again, producing vinasse

Vinasse

Vinasse is a byproduct of the sugar industry. Sugarcane or Sugar beet is processed to produce crystalline sugar, pulp and molasses. The latter are further processed by fermentation to ethanol, ascorbic acid or other products. After the removal of the desired product the remaining material is...

, a fluid rich in organic compounds. The syrup resulting from evaporation is then precipitated

Precipitation (chemistry)

Precipitation is the formation of a solid in a solution or inside anothersolid during a chemical reaction or by diffusion in a solid. When the reaction occurs in a liquid, the solid formed is called the precipitate, or when compacted by a centrifuge, a pellet. The liquid remaining above the solid...

by crystallization

Crystallization

Crystallization is the process of formation of solid crystals precipitating from a solution, melt or more rarely deposited directly from a gas. Crystallization is also a chemical solid–liquid separation technique, in which mass transfer of a solute from the liquid solution to a pure solid...

producing a mixture of clear crystals surrounded by molasses

Molasses

Molasses is a viscous by-product of the processing of sugar cane, grapes or sugar beets into sugar. The word molasses comes from the Portuguese word melaço, which ultimately comes from mel, the Latin word for "honey". The quality of molasses depends on the maturity of the sugar cane or sugar beet,...

. A centrifuge

Centrifuge

A centrifuge is a piece of equipment, generally driven by an electric motor , that puts an object in rotation around a fixed axis, applying a force perpendicular to the axis...

is used to separate the sugar from molasses, and the crystals are washed by addition of steam, after which the crystals are dried by an airflow. Upon cooling, sugar crystallizes out of the syrup. From this point, the sugar refining

Refining

Refining is the process of purification of a substance or a form. The term is usually used of a natural resource that is almost in a usable form, but which is more useful in its pure form. For instance, most types of natural petroleum will burn straight from the ground, but it will burn poorly...

process continues to produce different grades of sugar, and the molasses continue a separate process to produce ethanol.

Fermentation, distillation and dehydration

The resulting molasses are treated to become a sterilized molasse free of impurities, ready to be fermented. In the fermentation

Ethanol fermentation

Ethanol fermentation, also referred to as alcoholic fermentation, is a biological process in which sugars such as glucose, fructose, and sucrose are converted into cellular energy and thereby produce ethanol and carbon dioxide as metabolic waste products...

process sugars are transformed into ethanol by addition of yeast

Yeast

Yeasts are eukaryotic micro-organisms classified in the kingdom Fungi, with 1,500 species currently described estimated to be only 1% of all fungal species. Most reproduce asexually by mitosis, and many do so by an asymmetric division process called budding...

. Fermentation time varies from four to twelve hours resulting in an alcohol content of 7-10% by total volume (°GL), called fermented wine. The yeast is recovered from this wine through a centrifuge. Making use of the different boiling points the alcohol in the fermented wine is separated from the main resting solid components. The remaining product is hydrated ethanol with a concentration of 96°GL, the highest concentration of ethanol that can be achieved via azeotropicdistillation

Distillation

, and by national specification can contain up to 4.9% of water by volume. This hydrous ethanol is the fuel used by ethanol-only and flex

Flexible-fuel vehicle

vehicles in the country. Further dehydration is normally done by addition of chemicals, up to the specified 99.7°GL in order to produce anhydrous ethanol, which is used for blending with pure gasoline to obtain the country's E25 mandatory blend.
The additional processing required to convert hydrated into anhydrous ethanol increases the cost of the fuel, as in 2007 the average producer price difference between the two was around 14% for São Paulo State. This production price difference, though small, contributes to the competitiveness of the hydrated ethanol (E100) used in Brazil, not only with regard to local gasoline prices but also as compared to other countries such as the US and Sweden

Sweden

Sweden , officially the Kingdom of Sweden , is a Nordic country on the Scandinavian Peninsula in Northern Europe. Sweden borders with Norway and Finland and is connected to Denmark by a bridge-tunnel across the Öresund....

, that only use anhydrous ethanol for their flex fuel fleet.

Electricity generation from bagasse

Since the early days bagasse

Bagasse

was burnt in the plant to provide the energy required for the industrial part of the process. Today, the Brazilian best practice uses high-pressure boiler

Boiler

A boiler is a closed vessel in which water or other fluid is heated. The heated or vaporized fluid exits the boiler for use in various processes or heating applications.-Materials:...

s that increases energy recovery, allowing most sugar-ethanol plants to be energetically self-sufficient and even sell surplus electricity to utilities. By 2000, the total amount of sugarcane bagasse produced per year was 50 million tons/dry basis

Dry basis

Dry basis is a expression of the calculation in chemistry, chemical engineering and related subjects, in which the presence of water is ignored for the purposes of the calculation...

out of more than 300 million tons of harvested sugarcane. Several authors estimated a potential power generation from the use of sugarcane bagasse ranging from 1,000 to
9,000 MW, depending on the technology used and the use of harvest trash. One utility in São Paulo is buying more than 1% of its electricity from sugar mills, with a production capacity of 600 MW for self-use and 100 MW for sale. According to analysis from Frost & Sullivan, Brazil's sugarcane bagasse used for power generation has reached 3.0 GW in 2007, and it is expected to reach 12.2 GW in 2014. The analysis also found that sugarcane bagasse cogeneration accounts for 3% of the total Brazilian energy matrix. The energy is especially valuable to utilities because it is produced mainly in the dry season when hydroelectric dams are running low.

According to a study commissioned by the Dutch

Netherlands

The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...

government in 2006 to evaluate the sustainability of Brazilian bioethanol "...there are also substantial gains possible in the efficiency of electricity use and generation: The electricity used for distillery operations has been estimated at 12.9 kWh/tonne cane, with a best available technology rate of 9.6 kWh/tonne cane . For electricity generation the efficiency could be increased from 18 kWh/tonne cane presently, to 29.1 kWh/tonne cane maximum. The production of surplus electricity could in theory be increased from 5.3 kWh/tonne cane to 19 kWh/tonne cane."

Electric generation from ethanol

Brazil has several experimental programs for the production of electricity using sugar cane ethanol as fuel. A joint venture of General Electric

General Electric

General Electric Company , or GE, is an American multinational conglomerate corporation incorporated in Schenectady, New York and headquartered in Fairfield, Connecticut, United States...

and Petrobras

Petrobras

is operating one commercial pilot plant in Juiz de Fora

Juiz de Fora

-Industry, Trade, and Culture:Juiz de Fora is the second most important industrial center in the state of Minas Gerais, despite being the fourth largest in terms of population. It was once the state's largest city, position which was held up until the beginning of the 20th century...

, Minas Gerais

Minas Gerais

Overall energy use

Energy-use associated with the production of sugarcane ethanol derives from three primary sources: the agricultural sector, the industrial sector, and the distribution sector. In the agricultural sector, 35.98 GJ of energy are used to plant, maintain, and harvest one hectare (10,000 m2) of sugarcane for usable biofuel. This includes energy from numerous inputs, including nitrogen, phosphate, potassium oxide, lime, seed, herbicides, insecticides, labor and diesel fuel. The industrial sector, which includes the milling and refining sugarcane and the production of ethanol fuel, uses 3.63 GJ of energy and generates 155.57 GJ of energy per hectare of sugarcane plantation. Scientists estimate that the potential power generated from the cogeneration of bagasse could range from 1,000 to 9,000 MW, depending on harvest and technology factors. In Brazil, this is about 3% of the total energy needed. The burning of bagasse can generate 18 kilowatt-hours, or 64.7 MJ per Mg of sugarcane. Distillery facilities require about 45 MJ to operate, leaving a surplus energy supply of 19.3 MJ, or 5.4 kWh. In terms of distribution, researchers calculates sugarcane ethanol’s transport energy requirement to be .44 GJ per cubic-meter, thus one hectare of land would require 2.82 GJ of energy for successful transport and distribution. After taking all three sectors into account, the EROEI (Energy Return over Energy Invested) for sugarcane ethanol is about 8.

There are several improvements to the industrial processes, such as adopting a hydrolysis

Hydrolysis

Hydrolysis is a chemical reaction during which molecules of water are split into hydrogen cations and hydroxide anions in the process of a chemical mechanism. It is the type of reaction that is used to break down certain polymers, especially those made by condensation polymerization...

process to produce ethanol instead of surplus electricity, or the use of advanced boiler and turbine technology to increase the electricity yield, or a higher use of excess bagasse and harvest trash currently left behind in the fields, that together with various other efficiency improvements in sugarcane farming and the distribution chain have the potential to allow further efficiency increases, translating into higher yields, lower production costs, and also further improvements in the energy balance

Net energy gain

and the reduction of greenhouse gas

Greenhouse gas

A greenhouse gas is a gas in an atmosphere that absorbs and emits radiation within the thermal infrared range. This process is the fundamental cause of the greenhouse effect. The primary greenhouse gases in the Earth's atmosphere are water vapor, carbon dioxide, methane, nitrous oxide, and ozone...

emissions.

Exports

Brazilian ethanol exports by selected country and region (2005–2007) (Millions of liters)
Country/Region⁽¹⁾	2007	%	2006	%	2005	%
⁽²⁾	932.75	26.4	1,777.43	51.9	270.97	10.5
CBI countries Caribbean Basin Initiative The Caribbean Basin Initiative was a unilateral and temporary United States program initiated by the 1983 "Caribbean Basin Economic Recovery Act" . The CBI came into effect on January 1, 1984 and aimed to provide several tariff and trade benefits to many Central American and Caribbean countries.... ⁽³⁾	910.29	25.8	530.55	15.5	554.15	21.4
	308.97		131.54		133.39
	224.40		181.14		157.85
	170.37		91.26		126.69
Trinidad and Tobago	158.87		71.58		36.12
	42.21		50.24		100.10
	1,004.17	28.4	587.31	17.1	530.73	20.5
	808.56		346.61		259.40
	116.47		204.61		245.89
	364.00	10.3	225.40	6.6	315.39	12.2
	122.88		42.68		118.44
	66.69		92.27		216.36
	0		10.07		410.76	15.8
Total world exports	3,532.67	100	3,426.86	100	2,592.29	100
Notes: ⁽¹⁾Only countries with more than 100,000 liters imports on a given year are shown. ⁽²⁾It includes exports to Puerto Rico Puerto Rico Puerto Rico , officially the Commonwealth of Puerto Rico , is an unincorporated territory of the United States, located in the northeastern Caribbean, east of the Dominican Republic and west of both the United States Virgin Islands and the British Virgin Islands.Puerto Rico comprises an... and U.S.Virgin Islands United States Virgin Islands The Virgin Islands of the United States are a group of islands in the Caribbean that are an insular area of the United States. The islands are geographically part of the Virgin Islands archipelago and are located in the Leeward Islands of the Lesser Antilles.The U.S... . ⁽³⁾ Including Mexico Mexico The United Mexican States , commonly known as Mexico , is a federal constitutional republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of... that trades with the U.S. under the North American Free Trade Agreement North American Free Trade Agreement The North American Free Trade Agreement or NAFTA is an agreement signed by the governments of Canada, Mexico, and the United States, creating a trilateral trade bloc in North America. The agreement came into force on January 1, 1994. It superseded the Canada – United States Free Trade Agreement... (NAFTA).

Brazil is the world's largest exporter of ethanol. In 2007 it exported 933.4 million gallons (3,532.7 million liters), representing almost 20% of its production, and accounting for almost 50% of the global exports. Since 2004 Brazilian exporters have as their main customers the United States

United States

The United States of America is a federal constitutional republic comprising fifty states and a federal district...

, Netherlands

Netherlands

, Japan

Japan

Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...

, Sweden

Sweden

, Jamaica

Jamaica

Jamaica is an island nation of the Greater Antilles, in length, up to in width and 10,990 square kilometres in area. It is situated in the Caribbean Sea, about south of Cuba, and west of Hispaniola, the island harbouring the nation-states Haiti and the Dominican Republic...

, El Salvador

El Salvador

El Salvador or simply Salvador is the smallest and the most densely populated country in Central America. The country's capital city and largest city is San Salvador; Santa Ana and San Miguel are also important cultural and commercial centers in the country and in all of Central America...

, Costa Rica

Costa Rica

Costa Rica , officially the Republic of Costa Rica is a multilingual, multiethnic and multicultural country in Central America, bordered by Nicaragua to the north, Panama to the southeast, the Pacific Ocean to the west and the Caribbean Sea to the east....

, Trinidad & Tobago, Nigeria

Nigeria

Nigeria , officially the Federal Republic of Nigeria, is a federal constitutional republic comprising 36 states and its Federal Capital Territory, Abuja. The country is located in West Africa and shares land borders with the Republic of Benin in the west, Chad and Cameroon in the east, and Niger in...

, Mexico

Mexico

The United Mexican States , commonly known as Mexico , is a federal constitutional republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of...

, India

India

India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...

, and South Korea

South Korea

The Republic of Korea , , is a sovereign state in East Asia, located on the southern portion of the Korean Peninsula. It is neighbored by the People's Republic of China to the west, Japan to the east, North Korea to the north, and the East China Sea and Republic of China to the south...

.

The countries in the Caribbean Basin

Caribbean Basin

The Caribbean Basin is generally defined as the area running from Florida westward along the Gulf coast, then south along the Mexican coast through Central America and then eastward across the northern coast of South America. This region includes the islands of the archipelago of the West Indies...

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

Anhydrous

As a general term, a substance is said to be anhydrous if it contains no water. The way of achieving the anhydrous form differs from one substance to another...

ethanol, and then re-export it to the United States, gaining value-added and avoiding the 2.5% duty and the per gallon tariff

Tariff

A tariff may be either tax on imports or exports , or a list or schedule of prices for such things as rail service, bus routes, and electrical usage ....

, thanks to the trade agreements and benefits granted by Caribbean Basin Initiative (CBI)

Caribbean Basin Initiative

The Caribbean Basin Initiative was a unilateral and temporary United States program initiated by the 1983 "Caribbean Basin Economic Recovery Act" . The CBI came into effect on January 1, 1984 and aimed to provide several tariff and trade benefits to many Central American and Caribbean countries....

. This process is limited by a quota, set at 7% of U.S. ethanol consumption. 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 of Brazilian direct exports to the U.S. This situation has caused some concerns in the United States, as it 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".

The U.S., potentially the largest market for Brazilian ethanol imports, currently imposes a tariff on Brazilian ethanol of per gallon in order to encourage domestic ethanol production and protect the budding ethanol industry in the United States. Historically, this tariff was intended to offset the 45 cent per gallon blender's federal tax credit

Tax credit

A tax credit is a sum deducted from the total amount a taxpayer owes to the state. A tax credit may be granted for various types of taxes, such as an income tax, property tax, or VAT. It may be granted in recognition of taxes already paid, as a subsidy, or to encourage investment or other behaviors...

that is applied to ethanol no matter its country of origin. 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), but fell significantly in 2007 due to sharp increases in American ethanol production from corn

Corn

Corn is the name used in the United States, Canada, and Australia for the grain maize.In much of the English-speaking world, the term "corn" is a generic term for cereal crops, such as* Barley* Oats* Wheat* Rye- Places :...

. As shown in the table, the United States remains the largest single importer of Brazilian ethanol exports, though collectively the European Union

European Union

The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...

and the CBI countries

Caribbean Basin Initiative

now import a similar amount.

A 2010 study by Iowa State University's

Iowa State University

Iowa State University of Science and Technology, more commonly known as Iowa State University , is a public land-grant and space-grant research university located in Ames, Iowa, United States. Iowa State has produced astronauts, scientists, and Nobel and Pulitzer Prize winners, along with a host of...

Center for Agricultural and Rural Development found that removing the U.S. import tariff would result in less than 5% of the United States’ ethanol being imported from Brazil. Also a 2010 study by the Congressional Budget Office

Congressional Budget Office

The Congressional Budget Office is a federal agency within the legislative branch of the United States government that provides economic data to Congress....

(CBO) found that the costs to American taxpayers of using a biofuel to reduce gasoline consumption by one gallon are $1.78 for corn ethanol and $3.00 for cellulosic ethanol. In a similar way, and without considering potential indirect land use effects, the costs to taxpayers of reducing greenhouse gas emissions through tax credits are about $750 per metric ton of CO2-equivalent for ethanol and around $275 per metric ton for cellulosic ethanol.

After being renewed several times, the tax credit is set to expire on December, 31, 2011, and both the per gallon tariff and per gallon blender’s credit have been the subject of contentious debate in Washington,DC with ethanol interest groups and politicians staking positions on both sides of the issue. On June 16, 2011, the U.S. Congress approved an amendment to the economic development bill to repeal both the tax credit and the tariff on ethanol, and though this bill has an uncertain future, it is considered a signal that the tax credits will not be renew when they expire at the end of 2011. The eventual elimination of the import tariff is not expect to have significant effects in the short term. That is because the Brazilian ethanol industry has been having trouble meeting its own domestic demand for ethanol during 2010 and 2011, and actually Brazil imported some corn ethanol from the U.S. The shortage in supply is due in part to high sugar prices, which make it more profitable for Brazilian producers to sell it as sugar than convert it to ethanol fuel. Also, as a result of the credit crunch

Credit crunch

A credit crunch is a reduction in the general availability of loans or a sudden tightening of the conditions required to obtain a loan from the banks. A credit crunch generally involves a reduction in the availability of credit independent of a rise in official interest rates...

caused by the financial crisis of 2007–2010, the expansion of the Brazilian ethanol industry has not being able keep up pace with the accelerated growth of the flex fuel fleet

Flexible-fuel vehicle

.

As U.S. EPA's 2010 final ruling for the Renewable Fuel Standard designated Brazilian sugarcane ethanol as an advanced biofuel, Brazilian ethanol producers hope this classification will contribute to lift import tariffs both in the U.S. and the rest of the world. Also they expect to increase exports to the U.S., as the blending mandate requires an increasing quota of advanced biofuels, which is not likely to be fulfilled with cellulosic ethanol, and then it would force blenders to import more Brazilian sugarcane-based ethanol, despite the existing 54¢ per gallon tariff on ethanol imported directly from Brazil, or duty-free from the CBI

Caribbean Basin Initiative

countries that convert Brazilian hydrated ethanol into anhydrous ethanol.

Prices and effect on oil consumption

Most automobiles in Brazil run either on hydrous alcohol (E100

Common ethanol fuel mixtures

) or on gasohol (E25 blend), as the mixture of 25% anhydrous ethanol with gasoline is mandatory in the entire country. Since 2003, dual-fuel ethanol flex vehicles

Flexible-fuel vehicle

that run on any proportion of hydrous ethanol and gasoline have been gaining popularity. These have electronic sensors that detect the type of fuel and adjust the engine combustion to match, so users can choose the cheapest available fuel. Sales of flex fuel vehicles reached 9.3 million by December 2009, representing 39% of the gasoline-powered fleet. By mid 2010 there were 70 flex models available in the market and production by December 2010 reached more than 12.5 million flex vehicles including more than 500 thousand flex fuel motorcycles.

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. As a rule of thumb

Rule of thumb

A rule of thumb is a principle with broad application that is not intended to be strictly accurate or reliable for every situation. It is an easily learned and easily applied procedure for approximately calculating or recalling some value, or for making some determination...

, Brazilian consumers are frequently advised by the media to use more alcohol than gasoline in their mix only when ethanol prices are 30% lower or more than gasoline, as ethanol price fluctuates heavily depending on the harvest yields and seasonal fluctuation of sugarcane harvest.

Since 2005, ethanol prices have been very competitive without subsidies, even with gasoline prices kept constant in local currency since mid-2005, at a time when oil was just approaching USD 60 a barrel. However, Brazilian gasoline taxes are high, around 54%, while ethanol fuel taxes are lower and vary between 12% to 30%, depending of the state. As of October 2008 the average price of E25 gasoline was $4.39 per gallon while the average price for ethanol was USD 2.69 per gallon. This differential in taxation favors ethanol fuel consumption, and by the end of July 2008, when oil prices

2003 to 2008 world oil market chronology

From the mid-1980s to September 2003, the inflation adjusted price of a barrel of crude oil on NYMEX was generally under $25/barrel. Then, during 2004, the price rose above $40, and then $50. A series of events led the price to exceed $60 by August 11, 2005, and then briefly exceed $75 in the...

were close to its latest peak and the Brazilian real

Brazilian real

The real is the present-day currency of Brazil. Its sign is R$ and its ISO code is BRL. It is subdivided into 100 centavos ....

exchange rate to the US dollar was close to its most recent minimum, the average gasoline retail price at the pump in Brazil reached USD 6.00 per gallon. The price ratio between gasoline and ethanol fuel has been well above 30% during this period for most states, except during low sugar cane supply between harvests and for states located far away from the ethanol production centers. According to Brazilian producers, ethanol can remain competitive if the price of oil does not fall below USD 30 a barrel.

By 2008 consumption of ethanol fuel by the Brazilian fleet of light vehicles, as pure ethanol and in gasohol, is replacing gasoline at the rate of about 27,000 cubic meters per day, and by February 2008 the combined consumption of anhydrous and hydrated ethanol fuel surpassed 50% of the fuel that would be needed to run the light vehicle fleet on pure gasoline alone. Monthly consumption of anhydrous ethanol for the mandatory E25 blend, together with hydrous ethanol used by flex vehicles, reached 1.432 billion liters, while pure gasoline consumption was 1.411 billion liters. Despite this volumetric parity, when expressed in terms of energy equivalent (toe), sugarcane ethanol represented 17.6% of the country's total energy consumption by the transport sector in 2008, while gasoline represented 23.3% and diesel 49.2%.

For the first time since 2003 sales of hydrous ethanol fell in 2010, with a decrease of 8.5% as compared to 2009. Total consumption of both hydrous and anhydrous ethanol fell by 2.9% while gasoline consumption increased by 17.5%. Despite the reduction in ethanol consumption, total ethanol sales reached 22.2 billion liters while pure gasoline consumption was 22.7 billion liters, keeping the market share for each fuel close to 50%. The decrease in hydrous ethanol consumption was due mainly to high sugar prices in the international markets, which reached a 30 year high in 2010. This peak in sugar prices caused sugarcane processing plants to produce more sugar than ethanol, and as supply contracted, E100 prices increased to the point that several times during 2010 the price of hydrous ethanol was less than 30% cheaper than gasoline. Another factor that contributed to this shift was the increase sales of imported gasoline only vehicles that took place during 2010.

State	Average retail price (R$/liter)		Price spread E25 - E100	State	Average retail price (R$/liter)		Price spread E25 - E100	State	Average retail price (R$/liter)		Price spread E25 - E100
State	E100	E25	(%)	State	E100	E25	(%)	State	E100	E25	(%)
Acre (AC) Acre (state) Acre is one of the 27 states of Brazil. It is situated in the southwest of the Northern Region, bordering Amazonas to the north, Rondônia to the east, Bolivia to the southeast and the Ucayali Region of Peru to the south and west. It occupies an area of 152,581.4 km2, being slightly smaller...	2.080	2.943	29.32	Maranhão (MA) Maranhão Maranhão is a northeastern state of Brazil. To the north lies the Atlantic Ocean. Maranhão is neighbored by the states of Piauí, Tocantins and Pará. The people of Maranhão have a distinctive accent...	1.709	2.628	34.97	Rio de Janeiro (RJ) Rio de Janeiro (state) Rio de Janeiro is one of the 27 states of Brazil.Rio de Janeiro has the second largest economy of Brazil behind only São Paulo state.The state of Rio de Janeiro is located within the Brazilian geopolitical region classified as the Southeast...	1.676	2.531	33.78
Alagoas (AL) Alagoas Alagoas is one of the 27 federative units of Brazil and is situated in the eastern part of the Northeast Region. It borders: Pernambuco ; Sergipe ; Bahia ; and the Atlantic Ocean . It occupies an area of 27,767 km², being slightly larger than Haiti...	1.844	2.766	33.33	Mato Grosso (MT) Mato Grosso Mato Grosso is one of the states of Brazil, the third largest in area, located in the western part of the country.Neighboring states are Rondônia, Amazonas, Pará, Tocantins, Goiás and Mato Grosso do Sul. It also borders Bolivia to the southwest...	1.452	2.677	45.76	Rio Grande do Norte (RN) Rio Grande do Norte Rio Grande do Norte is one of the states of Brazil, located in the northeastern region of the country, occupying the northeasternmost tip of the South American continent. Because of its geographic position, Rio Grande do Norte has a strategic importance. The capital and largest city is Natal...	1.940	2.669	27.31
Amapá (AP) Amapá Amapá is one of the states of Brazil, located in the extreme north, bordering French Guiana and Suriname to the north. To the east is the Atlantic Ocean, and to the south and west is the Brazilian state of Pará. Perhaps one of the main features of the state is the River Oiapoque, as it was once...	2.246	2.686	16.38	Mato Grosso do Sul (MS) Mato Grosso do Sul Mato Grosso do Sul is one of the states of Brazil.Neighboring Brazilian states are Mato Grosso, Goiás, Minas Gerais, São Paulo and Paraná. It also borders the countries of Paraguay and Bolivia to the west. The economy of the state is largely based on agriculture and cattle-raising...	1.683	2.676	37.11	Rio Grande do Sul (RS) Rio Grande do Sul Rio Grande do Sul is the southernmost state in Brazil, and the state with the fifth highest Human Development Index in the country. In this state is located the southernmost city in the country, Chuí, on the border with Uruguay. In the region of Bento Gonçalves and Caxias do Sul, the largest wine...	1.779	2.574	30.89
Amazonas (AM)	2.773	2.452	27.69	Minas Gerais (MG) Minas Gerais Minas Gerais is one of the 26 states of Brazil, of which it is the second most populous, the third richest, and the fourth largest in area. Minas Gerais is the Brazilian state with the largest number of Presidents of Brazil, the current one, Dilma Rousseff, being one of them. The capital is the...	1.610	2.377	32.27	Rondônia (RR) Rondônia Rondônia is a state in Brazil, located in the north-western part of the country. To the west is a short border with the state of Acre, to the north is the state of Amazonas, in the east is Mato Grosso, and in the south is Bolivia. Its capital is Porto Velho. The state was named after Candido Rondon...	1.839	2.669	31.10
Bahia (BA) Bahia Bahia is one of the 26 states of Brazil, and is located in the northeastern part of the country on the Atlantic coast. It is the fourth most populous Brazilian state after São Paulo, Minas Gerais and Rio de Janeiro, and the fifth-largest in size...	1.630	2.522	35.37	Pará (PA) Pará Pará is a state in the north of Brazil. It borders the Brazilian states of Amapá, Maranhão, Tocantins, Mato Grosso, Amazonas and Roraima. To the northwest it also borders Guyana and Suriname, and to the northeast it borders the Atlantic Ocean. The capital is Belém.Pará is the most populous state...	2.120	2.772	23.52	Roraima (RO) Roraima Roraima is the northernmost and least populated state of Brazil, located in the Amazon region. It borders the states of Amazonas and Pará, as well as the nations of Venezuela and Guyana. The population is 400,000 and the capital is Boa Vista...	2.154	2.710	20.52
Brasília (DF) Brazilian Federal District The Federal District is set apart for Brasília, the capital of Brazil. Located in a region called Planalto Central, or Central Plateau, the Federal District is divided in 29 administrative regions. Brasilia - place where the three branches of the Federal Government are located - is the main...	1.884	2.586	27.15	Paraíba (PB) Paraíba Paraíba Paraíba Paraíba (Tupi: pa'ra a'íba: "bad to navigation"; Brazilian Portuguese pronunciation: is a state of Brazil. It is located in the Brazilian Northeast, and is bordered by Rio Grande do Norte to the north, Ceará to the west, Pernambuco to the south and the Atlantic Ocean to the east...	1.883	2.553	26.24	Santa Catarina (SC) Santa Catarina (state) Santa Catarina is a state in southern Brazil with one of the highest standards of living in Latin America. Its capital is Florianópolis, which mostly lies on the Santa Catarina Island. Neighbouring states are Rio Grande do Sul to the south and Paraná to the north. It is bounded on the east by...	1.697	2.556	33.61
Ceará (CE) Ceará Ceará is one of the 27 states of Brazil, located in the northeastern part of the country, on the Atlantic coast. It is currently the 8th largest Brazilian State by population and the 17th by area. It is also one of the main touristic destinations in Brazil. The state capital is the city of...	1.768	2.510	29.56	Paraná (PR) Paraná (state) Paraná is one of the states of Brazil, located in the South of the country, bordered on the north by São Paulo state, on the east by the Atlantic Ocean, on the south by Santa Catarina state and the Misiones Province of Argentina, and on the west by Mato Grosso do Sul and the republic of Paraguay,...	1.445	2.429	40.51	São Paulo (SP) São Paulo (state) São Paulo is a state in Brazil. It is the major industrial and economic powerhouse of the Brazilian economy. Named after Saint Paul, São Paulo has the largest population, industrial complex, and economic production in the country. It is the richest state in Brazil...	1.306	2.398	45.54
Espírito Santo (ES) Espírito Santo Espírito Santo is one of the states of southeastern Brazil, often referred to by the abbreviation "ES". Its capital is Vitória and the largest city is Vila Velha. The name of the state means literally "holy spirit" after the Holy Ghost of Christianity...	1.795	2.662	32.57	Pernambuco (PE) Pernambuco Pernambuco is a state of Brazil, located in the Northeast region of the country. To the north are the states of Paraíba and Ceará, to the west is Piauí, to the south are Alagoas and Bahia, and to the east is the Atlantic Ocean. There are about of beaches, some of the most beautiful in the...	1.700	2.573	33.93	Sergipe (SE) Sergipe Sergipe , is the smallest state of the Brazilian Federation, located on the northeastern Atlantic coast of the country. It borders on two other states, Bahia to the south and west and Alagoas to the north, and to the east is the Atlantic Ocean...	1.888	2.518	25.02
Goiás (GO) Goiás Goiás is a state of Brazil, located in the central part of the country. The name Goiás comes from the name of an indigenous community...	1.581	2.565	38.36	Piauí (PI) Piauí Piauí is one of the states of Brazil, located in the northeastern part of the country.Piauí has the shortest coastline of any of the non-landlocked Brazilian states at 66 km , and the capital, Teresina, is the only state capital in the north east to be located inland...	1.927	2.655	27.42	Tocantins (TO) Tocantins (state) Tocantins is one of the states of Brazil. . The state was formed in 1988 out of the northern part of Goiás, and construction began on the capital, Palmas, in 1989, in contrast to most of the other cities in the state which date back to the Portuguese colonial period...	1.708	2.748	37.85
Country average	1.513	2.511	39.75	Source: Agência Nacional do Petróleo (ANP). Average retail prices for week of 26/10/2008 to 01/11/2008. Note: Data is presented in local currency because the exchange rate for the Brazilian real Brazilian real The real is the present-day currency of Brazil. Its sign is R$ and its ISO code is BRL. It is subdivided into 100 centavos .... has been fluctuating heavily since the beginning of global financial crisis. Exchange rate for 2008-10-31 was USD 1 = R$ Brazilian real The real is the present-day currency of Brazil. Its sign is R$ and its ISO code is BRL. It is subdivided into 100 centavos .... 2.16.

Comparison with the United States

Brazil's sugar cane-based industry is more efficient than the U.S. corn-based industry. Sugar cane ethanol has an energy balance

Net energy gain

seven 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. 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

Tariff

A tariff may be either tax on imports or exports , or a list or schedule of prices for such things as rail service, bus routes, and electrical usage ....

of 54-cent per gallon, first imposed in 1980, but kept to offset the 45-cent per gallon blender's federal tax credit

Tax credit

that is applied to ethanol no matter its country of origin.

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

Photosynthetic efficiency

The photosynthetic efficiency is the fraction of light energy converted into chemical energy during photosynthesis in plants and algae. Photosynthesis can be described by the simplified chemical reactionwhere CH2O represents carbohydrates such as sugars, cellulose, and lignin.The value of the...

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

Florida

Florida is a state in the southeastern United States, located on the nation's Atlantic and Gulf coasts. It is bordered to the west by the Gulf of Mexico, to the north by Alabama and Georgia and to the east by the Atlantic Ocean. With a population of 18,801,310 as measured by the 2010 census, it...

, Louisiana

Louisiana

Louisiana is a state located in the southern region of the United States of America. Its capital is Baton Rouge and largest city is New Orleans. Louisiana is the only state in the U.S. with political subdivisions termed parishes, which are local governments equivalent to counties...

, Hawaii

Hawaii

Hawaii is the newest of the 50 U.S. states , and is the only U.S. state made up entirely of islands. It is the northernmost island group in Polynesia, occupying most of an archipelago in the central Pacific Ocean, southwest of the continental United States, southeast of Japan, and northeast of...

, and Texas

Texas

Texas is the second largest U.S. state by both area and population, and the largest state by area in the contiguous United States.The name, based on the Caddo word "Tejas" meaning "friends" or "allies", was applied by the Spanish to the Caddo themselves and to the region of their settlement in...

. 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

Bunkie, Louisiana

Bunkie is a city in Avoyelles Parish, Louisiana, United States. The population was 4,662 at the 2000 census.Bunkie is the birthplace of jazz drummer Zutty Singleton. Sue Eakin, Louisiana historian and former publisher of the Bunkie Record, resided in Bunkie for most of her life until her death in...

were converted to sugar cane-based ethanol production using Colombia

Colombia

Colombia, officially the Republic of Colombia , is a unitary constitutional republic comprising thirty-two departments. The country is located in northwestern South America, bordered to the east by Venezuela and Brazil; to the south by Ecuador and Peru; to the north by the Caribbean Sea; to the...

n technology in order to make possible a profitable ethanol production. These three plants will produce 100 million gallons (378.5 million liters) of ethanol within five years. By 2009 two other sugarcane ethanol production projects are being developed in Kauai

Kauai

Kauai or Kauai, known as Tauai in the ancient Kaua'i dialect, is geologically the oldest of the main Hawaiian Islands. With an area of , it is the fourth largest of the main islands in the Hawaiian archipelago, and the 21st largest island in the United States. Known also as the "Garden Isle",...

, Hawaii and Imperial Valley

Imperial Valley

The Imperial Valley is an agricultural area of Southern California's Imperial County. It is located in southeastern Southern California, centered around the city of El Centro. Locally, the terms "Imperial Valley" and "Imperial County" are used synonymously. The Valley is bordered between the...

, California.

Comparison of key characteristics between the ethanol industries in the United States and Brazil
Characteristic		United States	Units/comments
Feedstock	Sugar cane	Maize	Main cash crop Cash crop In agriculture, a cash crop is a crop which is grown for profit.The term is used to differentiate from subsistence crops, which are those fed to the producer's own livestock or grown as food for the producer's family... for ethanol production, the US has less than 2% from other crops.
Total ethanol fuel production (2010)	6,922	13,230	Million U.S. liquid gallons Gallon The gallon is a measure of volume. Historically it has had many different definitions, but there are three definitions in current use: the imperial gallon which is used in the United Kingdom and semi-officially within Canada, the United States liquid gallon and the lesser used United States dry... .
Total arable land	355	270⁽¹⁾	Million hectares.
Total area used for ethanol crop (2006)	3.6 (1%)	10 (3.7%)	Million hectares (% total arable).
Productivity per hectare	6,800-8,000	3,800-4,000	Liters of ethanol per hectare Hectare The hectare is a metric unit of area defined as 10,000 square metres , and primarily used in the measurement of land. In 1795, when the metric system was introduced, the are was defined as being 100 square metres and the hectare was thus 100 ares or 1/100 km2... . Brazil is 727 to 870 gal/acre (2006), US is 321 to 424 gal/acre (2003).
Energy balance Net energy gain Net Energy Gain is a concept used in energy economics that refers to the difference between the energy expended to harvest an energy source and the amount of energy gained from that harvest. The net energy gain, which can be expressed in joules, differs from the net financial gain that may result... (input energy productivity)	8.3 to 10.2	1.3 to 1.6	Ratio of the energy obtained from ethanol/energy expended in its production.
Estimated GHG emissions reduction	86-90%⁽²⁾	10-30%⁽²⁾	% GHGs avoided by using ethanol instead of gasoline, using existing crop land (No ILUC).
EPA United States Environmental Protection Agency The U.S. Environmental Protection Agency is an agency of the federal government of the United States charged with protecting human health and the environment, by writing and enforcing regulations based on laws passed by Congress... 's estimated 2022 GHG reduction for RFS2.	61%⁽³⁾	21%	Average % GHGs change by using ethanol as compared to gasoline, considering direct and indirect land use change effects.
CARB California Air Resources Board The California Air Resources Board, also known as CARB or ARB, is the "clean air agency" in the government of California. Established in 1967 in the Mulford-Carrell Act, combining the Bureau of Air Sanitation and the Motor Vehicle Pollution Control Board, CARB is a department within the... 's full life-cycle carbon intensity	73.40	105.10⁽⁴⁾	Grams of CO₂ equivalent Carbon dioxide equivalent Carbon dioxide equivalent and Equivalent carbon dioxide are two related but distinct measures for describing how much global warming a given type and amount of greenhouse gas may cause, using the functionally equivalent amount or concentration of carbon dioxide as the reference.- Global warming... released per MJ of energy produced, includes indirect land use changes Indirect land use change impacts of biofuels The indirect land use change impacts of biofuels, also known as ILUC, relates to the unintended consequence of releasing more carbon emissions due to land-use changes around the world induced by the expansion of croplands for ethanol or biodiesel production in response to the increased global... .
Estimated payback time for GHG emissions Greenhouse gas A greenhouse gas is a gas in an atmosphere that absorbs and emits radiation within the thermal infrared range. This process is the fundamental cause of the greenhouse effect. The primary greenhouse gases in the Earth's atmosphere are water vapor, carbon dioxide, methane, nitrous oxide, and ozone...	17 years⁽⁵⁾	93 years⁽⁵⁾	Brazilian cerrado Cerrado The Cerrado, is a vast tropical savanna ecoregion of Brazil, particularly in the states of Gioas and Minas Gerais... for sugarcane and US grassland Grassland Grasslands are areas where the vegetation is dominated by grasses and other herbaceous plants . However, sedge and rush families can also be found. Grasslands occur naturally on all continents except Antarctica... for corn. Land use change scenarios by Fargione.
Flexible-fuel vehicle Flexible-fuel vehicle A flexible-fuel vehicle or dual-fuel vehicle is an alternative fuel vehicle with an internal combustion engine designed to run on more than one fuel, usually gasoline blended with either ethanol or methanol fuel, and both fuels are stored in the same common tank... s produced	12 million	9.3 million	Autos Automobile An automobile, autocar, motor car or car is a wheeled motor vehicle used for transporting passengers, which also carries its own engine or motor... and light trucks only. Brazil as of December 2010 (E100 FFVs). U.S. as of December 2009 (E85 E85 E85 is an abbreviation for an ethanol fuel blend of up to 85% denatured ethanol fuel and gasoline or other hydrocarbon by volume. E85 is commonly used by flex-fuel vehicles in the US, Canada, and Europe. Some of the benefits of E85 over conventional gasoline powered vehicles include the potential... FFVs).
Ethanol fueling stations in the country	35,017 (100%)	2,326 (1%)	As % of total gas stations in the country. Brazil by December 2007. U.S. by July 2010. (170,000 total)
Ethanol's share in the gasoline market	50%⁽⁶⁾	8%	As % of total consumption on a volumetric basis. Brazil as of April 2008. U.S. as of December 2009.
Cost of production (USD/gallon)	0.83	1.14	2006/2007 for Brazil (22¢/liter), 2004 for U.S. (35¢/liter).
Government subsidy (in USD)	0 ⁽⁷⁾	0.45/gallon	U.S. since 2009-01-01 as a blender tax credit Tax credit A tax credit is a sum deducted from the total amount a taxpayer owes to the state. A tax credit may be granted for various types of taxes, such as an income tax, property tax, or VAT. It may be granted in recognition of taxes already paid, as a subsidy, or to encourage investment or other behaviors... . Brazilian ethanol production is no longer subsidized.⁽⁷⁾
Import tariffs (in USD)	0⁽⁸⁾	0.54/gallon	Brazil did not import ethanol fuel since 2002 until 2010. In 2011 imported from the US. The U.S. does but imports have been declining sharply since 2008.
Notes: (1) Only contiguous U.S., excludes Alaska Alaska Alaska is the largest state in the United States by area. It is situated in the northwest extremity of the North American continent, with Canada to the east, the Arctic Ocean to the north, and the Pacific Ocean to the west and south, with Russia further west across the Bering Strait... . (2) Assuming no land use change. (3) Estimate is for U.S. consumption and sugarcane ethanol is imported from Brazil. Emissions from sea transport are included. Both estimates include land transport within the U.S. (4) CARB estimate for Midwest Midwestern United States The Midwestern United States is one of the four U.S. geographic regions defined by the United States Census Bureau, providing an official definition of the American Midwest.... corn ethanol. California California California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area... 's gasoline carbon intensity is 95.86 blended with 10% ethanol. (5) Assuming direct land use change only. (6) Due to ethanol's lower energy content by volume, bioethanol represented 17.6% of the transport sector energy consumption in 2008 while gasoline represented 23.3%. (7) Brazilian ethanol production is no longer subsidized, but gasoline is heavily taxed favoring ethanol fuel consumption (~54% tax). By the end of July 2008, when oil prices were close to its latest peak and the Brazilian real Brazilian real The real is the present-day currency of Brazil. Its sign is R$ and its ISO code is BRL. It is subdivided into 100 centavos .... exchange rate to the US dollar was close to its most recent minimum, the average gasoline retail price at the pump in Brazil was USD 6.00 per gallon, while the average US price was USD 3.98 per gallon. The latest gas retail price increase in Brazil occurred in late 2005, when oil price was at USD 60 per barrel. (8) Brazilian import tax is 20% (FOB FOB (shipping) FOB is an initialism which pertains to the shipping of goods. Depending on specific usage, it may stand for Free On Board or Freight On Board. FOB specifies which party pays for which shipment and loading costs, and/or where responsibility for the goods is transferred... ) but in 2010 it was temporarily cut to zero until 2011.

Ethanol diplomacy

In March 2007, "ethanol diplomacy" was the focus of President George W. Bush

George W. Bush

George Walker Bush is an American politician who served as the 43rd President of the United States, from 2001 to 2009. Before that, he was the 46th Governor of Texas, having served from 1995 to 2000....

's Latin American tour, in which he and Brazil's president, Luiz Inácio Lula da Silva

Luiz Inácio Lula da Silva

Luiz Inácio Lula da Silva , known popularly as Lula, served as the 35th President of Brazil from 2003 to 2010.A founding member of the Workers' Party , he ran for President three times unsuccessfully, first in the 1989 election. Lula achieved victory in the 2002 election, and was inaugurated as...

, were seeking to promote the production and use of sugar cane based ethanol throughout Latin America

Latin America

and the Caribbean

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 countries, such as Honduras

Honduras

Honduras is a republic in Central America. It was previously known as Spanish Honduras to differentiate it from British Honduras, which became the modern-day state of Belize...

, Nicaragua

Nicaragua

Nicaragua is the largest country in the Central American American isthmus, bordered by Honduras to the north and Costa Rica to the south. The country is situated between 11 and 14 degrees north of the Equator in the Northern Hemisphere, which places it entirely within the tropics. The Pacific Ocean...

, Costa Rica

Costa Rica

and Panama

Panama

Panama , officially the Republic of Panama , is the southernmost country of Central America. Situated on the isthmus connecting North and South America, it is bordered by Costa Rica to the northwest, Colombia to the southeast, the Caribbean Sea to the north and the Pacific Ocean to the south. The...

, several Caribbean

Caribbean

countries, and various Andean Countries

Andean Community of Nations

The Andean Community is a customs union comprising the South American countries of Bolivia, Colombia, Ecuador and Peru. The trade bloc was called the Andean Pact until 1996 and came into existence with the signing of the Cartagena Agreement in 1969...

tariff-free trade with the U.S. thanks to existing concessionary trade agreements.

Even though the U.S. has imposed a USD 0.54 tariff on every gallon of imported ethanol since 1980, the Caribbean nations and Central American countries are exempt from such duties based on the benefits granted by the Caribbean Basin Initiative (CBI)

Caribbean Basin Initiative

. CBI provisions allow tariff-free access to the US market from ethanol produced from foreign feedstock (outside CBI countries) up to 7% of the previous year US consumption. Also additional quotas are allowed if the beneficiary countries produce at least 30% of the ethanol from local feedstocks up to an additional 35 million gallons (132.5 million liters). Thus, several countries have been importing hydrated ethanol from Brazil, processing it at local distilleries to dehydrate

Dehydration

it, and then re-exporting it as anhydrous ethanol. American farmers have complained about this loophole to legally bypass the tariff. The 2005 Dominican Republic – Central America Free Trade Agreement (CAFTA) maintained the benefits granted by the CBI, and CAFTA provisions established country-specific shares for Costa Rica and El Salvador within the overall quota. An initial annual allowance was established for each country, with gradually increasing annual levels of access to the US market. The expectation is that using Brazilian technology for refining sugar cane based ethanol, such countries could become net exporters to the United States in the short-term. In August 2007, Brazil's President toured Mexico

Mexico

and several countries in Central America and the Caribbean to promote Brazilian ethanol technology.

The Memorandum of Understanding (MOU) that the American and Brazilian presidents signed in March 2007 may bring Brazil and the United States closer on energy policy, but it is not clear whether there has been substantive progress implementing the three pillars found in that agreement.

Brazil has also extended its technical expertise to several African countries, including Ghana

Ghana

Ghana , officially the Republic of Ghana, is a country located in West Africa. It is bordered by Côte d'Ivoire to the west, Burkina Faso to the north, Togo to the east, and the Gulf of Guinea to the south...

,Mozambique

Mozambique

Mozambique, officially the Republic of Mozambique , is a country in southeastern Africa bordered by the Indian Ocean to the east, Tanzania to the north, Malawi and Zambia to the northwest, Zimbabwe to the west and Swaziland and South Africa to the southwest...

, Angola

Angola

Angola, officially the Republic of Angola , is a country in south-central Africa bordered by Namibia on the south, the Democratic Republic of the Congo on the north, and Zambia on the east; its west coast is on the Atlantic Ocean with Luanda as its capital city...

, and Kenya

Kenya

Kenya , officially known as the Republic of Kenya, is a country in East Africa that lies on the equator, with the Indian Ocean to its south-east...

. This effort is led by EMBRAPA

Empresa Brasileira de Pesquisa Agropecuária

The Empresa Brasileira de Pesquisa Agropecuária is a state-owned company affiliated with the Brazilian Ministry of Agriculture, which is devoted to pure and applied research on agriculture. EMBRAPA conducts agricultural research on many topics including animal agriculture and crops...

, the state-owned company in charge for applied research on agriculture, and responsible for most of the achievements in increasing sugarcane productivity during the last thirty years. Another 15 African countries have shown interest in receiving Brazilian technical aid to improve sugarcane productivity and to produced ethanol efficiently. Brazil also has bilateral cooperation agreements with several other countries in Europe

Europe

Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...

and Asia

Asia

Asia is the world's largest and most populous continent, located primarily in the eastern and northern hemispheres. It covers 8.7% of the Earth's total surface area and with approximately 3.879 billion people, it hosts 60% of the world's current human population...

.

As President Lula

Luiz Inácio Lula da Silva

wrote for The Economist

The Economist

The Economist is an English-language weekly news and international affairs publication owned by The Economist Newspaper Ltd. and edited in offices in the City of Westminster, London, England. Continuous publication began under founder James Wilson in September 1843...

regarding Brazil's global agenda: "Brazil’s ethanol and biodiesel programmes are a benchmark for alternative and renewable fuel sources. Partnerships are being established with developing countries seeking to follow Brazil’s achievements—a 675m-tonne reduction of greenhouse-gas emissions, a million new jobs and a drastic reduction in dependence on imported fossil fuels coming from a dangerously small number of producer countries. All of this has been accomplished without compromising food security, which, on the contrary, has benefited from rising agricultural output...We are setting up offices in developing countries interested in benefiting from Brazilian know-how in this field."

Benefits

Ethanol produced from sugarcane provides energy that is renewable and less carbon intensive than oil. Bioethanol reduces air pollution thanks to its cleaner emissions, and also contributes to mitigate global warming

Global warming

Global warming refers to the rising average temperature of Earth's atmosphere and oceans and its projected continuation. In the last 100 years, Earth's average surface temperature increased by about with about two thirds of the increase occurring over just the last three decades...

by reducing greenhouse gas emissions.

Energy balance

One of the main concerns about bioethanol production is the energy balance

Net energy gain

, the total amount of energy input into the process compared to the energy released by burning the resulting ethanol fuel. This balance considers the full cycle of producing the fuel, as cultivation, transportation and production require energy, including the use of oil and fertilizers. A comprehensive life cycle assessment

Life cycle assessment

commissioned by the State of São Paulo found that Brazilian sugarcane based ethanol has a favorable energy balance, varying from 8.3 for average conditions to 10.2 for best practice production. This means that for average conditions one unit of fossil-fuel energy is required to create 8.3 energy units from the resulting ethanol. These findings have been confirmed by other studies.

Greenhouse gas emissions

Another benefit of bioethanol is the reduction of greenhouse gas emissions as compared to gasoline, because as much carbon dioxide is taken up by the growing plants as is produced when the bioethanol is burnt, with a zero theoretical net contribution. Several studies have shown that sugarcane based ethanol reduces greenhouse gases by 86 to 90% if there is no significant land use change, and ethanol from sugarcane is regarded the most efficient biofuel currently under commercial production in terms of GHG emission reduction.

However, two studies published in 2008 are critical of previous assessments of greenhouse gas emissions reduction, as the authors considered that previous studies did not take into account the effect of land use changes. Recent assessments carried out in 2009 by the U.S. Environmental Protection Agency (EPA) and the California Air Resources Board

California Air Resources Board

The California Air Resources Board, also known as CARB or ARB, is the "clean air agency" in the government of California. Established in 1967 in the Mulford-Carrell Act, combining the Bureau of Air Sanitation and the Motor Vehicle Pollution Control Board, CARB is a department within the...

(CARB) included the impact of indirect land use changes (ILUC) as part of the lifecycle analysis of crop-based biofuels. Brazilian sugarcane ethanol meets both the ruled California Low-Carbon Fuel Standard (LCFS) and the proposed federal Renewable Fuel Standard (RFS2), despite the additional carbon emissions associated with ILUC. On February 3, 2010, EPA issued its final ruling regarding the RFS2 for 2010 and beyond, and determined that Brazilian ethanol produced from sugarcane complies with the applicable 50% GHG reduction threshold for the advanced fuel category. EPA’s modelling shows that sugarcane ethanol from Brazil reduces greenhouse gas emissions as compared to gasoline by 61%, using a 30-year payback for indirect land use change (ILUC) emissions. By September 2010 five Brazilian sugarcane ethanol mills have been approved by the EPA to export their ethanol in the U.S. under the advanced biofuel category.

A report commissioned by the United Nations, based on a detailed review of published research up to mid-2009 as well as the input of independent experts worldwide, found that ethanol from sugar cane as produced in Brazil "in some circumstances does better than just "zero emission." If grown and processed correctly, it has negative emission, pulling CO2 out of the atmosphere, rather than adding it. In contrast, the report found that U.S. use of maize

Maize

Maize known in many English-speaking countries as corn or mielie/mealie, is a grain domesticated by indigenous peoples in Mesoamerica in prehistoric times. The leafy stalk produces ears which contain seeds called kernels. Though technically a grain, maize kernels are used in cooking as a vegetable...

for biofuel is less efficient, as sugarcane can lead to emissions reductions of between 70% and well over 100% when substituted for gasoline. A 2010 study commissioned by the European Commission

European Commission

The European Commission is the executive body of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general day-to-day running of the Union....

found that emission reduction effects of first-generation biofuels are positive, even after discounting indirect land use change effects, particularly the "more emission-efficient" sugarcane ethanol from Brazil, which would have to be imported to assure the environmental viability of the EU's biofuels mandate.

Another 2010 study published by the World Bank

World Bank

The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...

found that "Brazil's transport sector has a lower carbon intensity compared to that of most other countries because of its widespread use of ethanol as a fuel for vehicles." The study also concluded that despite the already low emission intensity

Emission intensity

An emission intensity is the average emission rate of a given pollutant from a given source relative to the intensity of a specific activity; for example grams of carbon dioxide released per megajoule of energy produced, or the ratio of greenhouse gas emissions produced to GDP...

, urban transportation is responsible for 51% of CO₂ emissions within the Brazilian transport sector in 2008, and mainly originate in the growing use of private cars, traffic congestion

Traffic congestion

Traffic congestion is a condition on road networks that occurs as use increases, and is characterized by slower speeds, longer trip times, and increased vehicular queueing. The most common example is the physical use of roads by vehicles. When traffic demand is great enough that the interaction...

and inefficient public transportation systems. Nevertheless, the study concluded that the increased use of flexible-fuel vehicle

Flexible-fuel vehicle

s and the switch from gasoline to sugarcane ethanol are expected to stabilize GHG emissions from the light vehicle fleet over the next 25 years despite a expected increase in the number of kilometers traveled. Furthermore, the study found that if bioethanol's market share of the gasoline-powered vehicle market reaches 80% in 2030, this switch from gasoline "could deliver more than one-third of total emissions reduction targeted for the transport sector over the period" (2008–2030). The study also concluded that by increasing Brazilian ethanol exports to attend the increasing international demand for low-carbon fuel

Low-carbon fuel standard

A low-carbon fuel standard is a rule enacted to reduce carbon intensity in transportation fuels as compared to conventional petroleum fuels, such as gasoline and diesel. The most common low-carbon fuels are alternative fuels and cleaner fossil fuels, such as natural gas...

s, its trade partners will benefit from reduced CHG emissions. However, for this opportunity to be realized, trade barrier

Trade barrier

Trade barriers are government-induced restrictions on international trade. The barriers can take many forms, including the following:* Tariffs* Non-tariff barriers to trade** Import licenses** Export licenses** Import quotas** Subsidies...

s and subsidies in many countries will have to be reduced or eliminated.

A 2009 study published in Energy Policy found that the use of ethanol fuel in Brazil has allowed to avoid over 600 million tons of CO₂ emissions since 1975, when the Pró-Álcool Program began. The study also concluded that the neutralization of the carbon released due to land-use change was achieved in 1992. In another estimate, UNICA

UNICA, Brazil

, the main Brazilian ethanol industry organization, estimated that just the use of ethanol fuel in flex-fuel vehicles in Brazil has avoided 83.5 millions tons of CO₂ emissions between March 2003 and January 2010.

Air pollution

The widespread use of ethanol brought several environmental benefits to urban centers regarding air pollution

Air pollution

Air pollution is the introduction of chemicals, particulate matter, or biological materials that cause harm or discomfort to humans or other living organisms, or cause damage to the natural environment or built environment, into the atmosphere....

. Lead

Lead

Lead is a main-group element in the carbon group with the symbol Pb and atomic number 82. Lead is a soft, malleable poor metal. It is also counted as one of the heavy metals. Metallic lead has a bluish-white color after being freshly cut, but it soon tarnishes to a dull grayish color when exposed...

additives to gasoline were reduced through the 1980s as the amount of ethanol blended in the fuel was increased, and these additives were completely eliminated by 1991. The addition of ethanol blends instead of lead to gasoline lowered the total carbon monoxide

Carbon monoxide

Carbon monoxide , also called carbonous oxide, is a colorless, odorless, and tasteless gas that is slightly lighter than air. It is highly toxic to humans and animals in higher quantities, although it is also produced in normal animal metabolism in low quantities, and is thought to have some normal...

(CO), hydrocarbon

Hydrocarbon

In organic chemistry, a hydrocarbon is an organic compound consisting entirely of hydrogen and carbon. Hydrocarbons from which one hydrogen atom has been removed are functional groups, called hydrocarbyls....

s, sulfur

Sulfur

Sulfur or sulphur is the chemical element with atomic number 16. In the periodic table it is represented by the symbol S. It is an abundant, multivalent non-metal. Under normal conditions, sulfur atoms form cyclic octatomic molecules with chemical formula S8. Elemental sulfur is a bright yellow...

emissions, and particulate matter significantly. The use of ethanol-only vehicles has also reduced CO emissions drastically. Before the Pró-Álcool Program started, when gasoline was the only fuel in use, CO emissions were higher than 50 g/km driven; they had been reduced to less than 5.8 g/km in 1995. Several studies have also shown that São Paulo has benefit with significantly less air pollution thanks to ethanol's cleaner emissions. Furthermore, Brazilian flex-fuel

Flexible-fuel vehicle

engines are being designed with higher compression ratio

Compression ratio

The 'compression ratio' of an internal-combustion engine or external combustion engine is a value that represents the ratio of the volume of its combustion chamber from its largest capacity to its smallest capacity...

s, taking advantage of the higher ethanol blends and maximizing the benefits of the higher oxygen content of ethanol, resulting in lower emissions and improving fuel efficiency.

Even though all automotive fossil fuel

Fossil fuel

Fossil fuels are fuels formed by natural processes such as anaerobic decomposition of buried dead organisms. The age of the organisms and their resulting fossil fuels is typically millions of years, and sometimes exceeds 650 million years...

s emit aldehydes, one of the drawbacks of the use of hydrated ethanol in ethanol-only engines is the increase in aldehyde

Aldehyde

An aldehyde is an organic compound containing a formyl group. This functional group, with the structure R-CHO, consists of a carbonyl center bonded to hydrogen and an R group....

emissions as compared with gasoline or gasohol. However, the present ambient concentrations of aldehyde, in São Paulo city are below the reference levels recommended as adequate to human health found in the literature. Other concern is that because formaldehyde

Formaldehyde

Formaldehyde is an organic compound with the formula CH2O. It is the simplest aldehyde, hence its systematic name methanal.Formaldehyde is a colorless gas with a characteristic pungent odor. It is an important precursor to many other chemical compounds, especially for polymers...

and acetaldehyde

Acetaldehyde

Acetaldehyde is an organic chemical compound with the formula CH3CHO or MeCHO. It is one of the most important aldehydes, occurring widely in nature and being produced on a large scale industrially. Acetaldehyde occurs naturally in coffee, bread, and ripe fruit, and is produced by plants as part...

emissions are significantly higher, and although both aldehydes occur naturally and are frequently found in the open environment, additional emissions may be important because of their role in smog formation. However, more research is required to establish the extent and direct consequences, if any, on health.

Issues

Water use and fertilizers

Ethanol production has also raised concerns regarding water overuse and pollution, soil erosion and possible contamination by excessive use of fertilizers. A study commissioned by the Dutch

Netherlands

government in 2006 to evaluate the sustainability of Brazilian bioethanol concluded that there is sufficient water to supply all foreseeable long-term water requirements for sugarcane and ethanol production. Also, and as a result of legislation and technological progress, the amount of water collected for ethanol production has decreased considerably during the previous years. The overuse of water resources seems a limited problem in general in São Paulo, particularly because of the relatively high rainfall, yet, some local problems may occur. Regarding water pollution due to sugarcane production, Embrapa classifies the industry as level 1, which means "no impact" on water quality.

This evaluation also found that consumption of agrochemicals for sugar cane production is lower than in citric, corn, coffee and soybean cropping. Disease and pest control, including the use of agrochemicals, is a crucial element in all cane production. The study found that development of resistant sugar cane varieties is a crucial aspect of disease and pest control and is one of the primary objectives of Brazil’s cane genetic improvement programs. Disease control is one of the main reasons for the replacement of a commercial variety of sugar cane.

Field burning

Advancements in fertilizers and natural pesticides have all but eliminated the need to burn fields. 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. In the mid 90s, it was very common to experience quite dense ash rains in cities within the sugarcane's fields during harvest seasons.
A 2001 state law banned burning in sugarcane fields in São Paulo state by 2021, 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. 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. By the 2009/10 harvest season more than 50% of the cane was collected in São Paulo with harvesting machines. Mechanization will reduce pollution from burning fields and has higher productivity than people, but also will create unemployment for these seasonal workers, many of them coming from the poorest regions of Brazil. Due to mechanization the number of temporary workers in the sugarcane plantations has already declined as each harvester machine replaces about 100 cane cutters a day and creates 30 jobs including operators and maintenance teams.

Effects of land use change

Two studies published in 2008 questioned the benefits estimated in previous assessments regarding the reduction of greenhouse gas emissions from sugarcane based ethanol, as the authors consider that previous studies did not take into account the direct and indirect effect of land use changes. The authors found a "biofuel carbon debt" is created when Brazil and other developing countries convert land in undisturbed ecosystems, such as rainforest

Rainforest

Rainforests are forests characterized by high rainfall, with definitions based on a minimum normal annual rainfall of 1750-2000 mm...

s, savanna

Savanna

A savanna, or savannah, is a grassland ecosystem characterized by the trees being sufficiently small or widely spaced so that the canopy does not close. The open canopy allows sufficient light to reach the ground to support an unbroken herbaceous layer consisting primarily of C4 grasses.Some...

s, or grassland

Grassland

Grasslands are areas where the vegetation is dominated by grasses and other herbaceous plants . However, sedge and rush families can also be found. Grasslands occur naturally on all continents except Antarctica...

s, to biofuel

Biofuel

production, and to crop production when agricultural land is diverted to biofuel production. This land use change releases more CO₂

Carbon dioxide

Carbon dioxide is a naturally occurring chemical compound composed of two oxygen atoms covalently bonded to a single carbon atom...

than the annual greenhouse gas (GHG) reductions that these biofuels would provide by displacing fossil fuels. Among others, the study analyzed the case of Brazilian Cerrado

Cerrado

The Cerrado, is a vast tropical savanna ecoregion of Brazil, particularly in the states of Gioas and Minas Gerais...

being converted for sugarcane ethanol production. The biofuel carbon debt on converted Cerrado is estimated to be repaid in 17 years, the least amount of time of the scenarios that were analyzed, as for example, ethanol from US corn

Maize

was estimated to have a 93 year payback time. The study conclusion is that the net effect of biofuel production via clearing of carbon-rich habitats is to increase CO₂ emissions for decades or centuries relative to fossil fuel use.

Regarding this concern, previous studies conducted in Brazil have shown there are 355 million ha of arable land in Brazil, of which only 72 million ha are in use. Sugarcane is only taking 2% of arable land available, of which ethanol production represented 55% in 2008. Embrapa estimates that there is enough agricultural land available to increase at least 30 times the existing sugarcane plantation without endangering sensible ecosystems or taking land destined for food crops. Most future growth is expected to take place on abandoned pasture

Pasture

Pasture is land used for grazing. Pasture lands in the narrow sense are enclosed tracts of farmland, grazed by domesticated livestock, such as horses, cattle, sheep or swine. The vegetation of tended pasture, forage, consists mainly of grasses, with an interspersion of legumes and other forbs...

lands, as it has been the historical trend in São Paulo state. Also, productivity is expected to improve even further based on current biotechnology research, genetic improvement, and better agronomic practices, thus contributing to reduce land demand for future sugarcane cultures. This trend is demonstrated by the increases in agricultural production that took place in São Paulo state between 1990 and 2004, where coffee

Coffee

Coffee is a brewed beverage with a dark,init brooo acidic flavor prepared from the roasted seeds of the coffee plant, colloquially called coffee beans. The beans are found in coffee cherries, which grow on trees cultivated in over 70 countries, primarily in equatorial Latin America, Southeast Asia,...

, orange

Orange (fruit)

An orange—specifically, the sweet orange—is the citrus Citrus × sinensis and its fruit. It is the most commonly grown tree fruit in the world....

, sugarcane and other food crops were grown in an almost constant area.

Also regarding the potential negative impacts of land use changes on carbon emissions, a study commissioned by the Dutch

Netherlands

government concluded that "it is very difficult to determine the indirect effects of further land use for sugar cane production (i.e. sugar cane replacing another crop like soy or citrus crops, which in turn causes additional soy plantations replacing pastures, which in turn may cause deforestation), and also not logical to attribute all these soil carbon losses to sugar cane." Other authors have also questioned these indirect effects, as cattle pastures are displaced to the cheaper land near the Amazon. Studies rebutting this concern claim tha land devoted to free grazing cattle is shrinking, as density of cattle on pasture land increased from 1.28 heads of cattle/ha to 1.41 from 2001 to 2005, and further improvements are expected in cattle feeding practices.

A paper published in February 2010 by a team led by Lapola from the University of Kassel

University of Kassel

The University of Kassel, founded in 1970, is one of the newer universities in the state of Hesse. The university is in Kassel, and as of September 2010 has about 18,113 students...

found that the planned expansion of biofuel plantations (sugarcane and soybean) in Brazil up to 2020 will have a small direct land-use impact on carbon emissions, but indirect land-use changes could offset the carbon savings from biofuels due to the expansion of the rangeland

Rangeland

Rangelands are vast natural landscapes in the form of grasslands, shrublands, woodlands, wetlands, and deserts. Types of rangelands include tallgrass and shortgrass prairies, desert grasslands and shrublands, woodlands, savannas, chaparrals, steppes, and tundras...

frontier into the Amazonian forests, particularly due to displacement of cattle ranching. "Sugarcane ethanol and soybean biodiesel each contribute to nearly half of the projected indirect deforestation of 121,970 km2 by 2020, creating a carbon debt that would take about 250 years to be repaid using these biofuels instead of fossil fuels." The analysis also showed that intensification of cattle ranching, combined with efforts to promote high-yielding oil crops are required to achieve effective carbon savings from biofuels in Brazil, "while still fulfilling all food and bioenergy demands."

The main Brazilian ethanol industry organization

UNICA, Brazil

(UNICA) commented that this study and other calculations of land-use impacts are missing a key factor, the fact that in Brazil "cattle production and pasture has been intensifying already and is projected to do so in the future."

Deforestation

Other criticism have focused on the potential for clearing rain forests and other environmentally valuable land for sugarcane production, such as the Amazonia, the Pantanal

Pantanal

The Pantanal is a tropical wetland and one of the world's largest wetland of any kind. Most of it lies within the Brazilian state of Mato Grosso do Sul, but it extends into Mato Grosso and portions of Bolivia and Paraguay, sprawling over an area estimated at between and...

or the Cerrado

Cerrado

The Cerrado, is a vast tropical savanna ecoregion of Brazil, particularly in the states of Gioas and Minas Gerais...

. Embrapa and UNICA have rebutted this concern explaining that 99.7% of sugarcane plantations are located at least 2000 kilometres (1,242.7 mi) from the Amazonia, and expansion during the last 25 years took place in the Center-South region, also far away from the Amazonia, the Pantanal or the Atlantic forest. In São Paulo state growth took place in abandoned pasture lands.

The impact assessment regarding future changes in land use, forest protection and risks on biodiversity conducted as part of the study commissioned by the Dutch government concluded that "the direct impact of cane production on biodiversity is limited, because cane production replaces mainly pastures and/or food crop and sugar cane production takes place far from the major biomes in Brazil (Amazon Rain Forest, Cerrado, Atlantic Forest, Caatinga, Campos Sulinos and Pantanal)." However, "...the indirect impacts from an increase of the area under sugar cane production are likely more severe. The most important indirect impact would be an expansion of the area agricultural land at the expense of cerrados. The cerrados are an important biodiversity reserve. These indirect impacts are difficult to quantify and there is a lack of practically applicable criteria and indicators."

In order to guarantee a sustainable development of ethanol production, in September 2009 the government issued by decree a countrywide agroecological land use zoning to restrict sugarcane growth in or near environmentally sensitive areas such as the Pantanal

Pantanal

wetland

Wetland

A wetland is an area of land whose soil is saturated with water either permanently or seasonally. Wetlands are categorised by their characteristic vegetation, which is adapted to these unique soil conditions....

s, the Amazon Rainforest

Amazon Rainforest

The Amazon Rainforest , also known in English as Amazonia or the Amazon Jungle, is a moist broadleaf forest that covers most of the Amazon Basin of South America...

and the Upper Paraguay River

Paraguay River

The Paraguay River is a major river in south central South America, running through Brazil, Bolivia, Paraguay, and Argentina...

Basin. The installation of new ethanol production plants will not be permitted on these locations, and only existing plants and new ones with environmental licensed already approved before September 17, 2009, will be allowed to remain operating in these sensitive areas. According to the new criteria, 92.5% of the Brazilian territory is not suitable for sugarcane plantation. The government considers that the suitable areas are more than enough to meet the future demand for ethanol and sugar in the domestic and international markets foreseen for the next decades.

Social implications

Sugarcane has had an important social contribution to the some of the poorest people in Brazil by providing income usually above the minimum wage

Minimum wage

A minimum wage is the lowest hourly, daily or monthly remuneration that employers may legally pay to workers. Equivalently, it is the lowest wage at which workers may sell their labour. Although minimum wage laws are in effect in a great many jurisdictions, there are differences of opinion about...

, and a formal job with fringe benefits. Formal employment in Brazil accounts an average 45% across all sectors, while the sugarcane sector has a share of 72.9% formal jobs in 2007, up from 53.6% in 1992, and in the more developed sugarcane ethanol industry in São Paulo state formal employment reached 93.8% in 2005. Average wages in sugar cane and ethanol production are above the official minimum wage, but minimum wages may be insufficient to avoid poverty.
The North-Northeast regions stands out for having much lower levels of education among workers and lower monthly income. The average number workers with 3 or less school years in Brazil is 58.8%, while in the Southeast this percentage is 46.2%, in the Northeast region

Northeast Region, Brazil

is 76,4%. Therefore, earnings in the Center-South are not surprisingly higher than those in the North-Northeast for comparable levels of education. In 2005 sugarcane harvesting workers in the Center-South region received an average wage 58.7% higher than the average wage in the North-Northeast region. The main social problems are related to cane cutters which do most of the low-paid work related to ethanol production.

The total number of permanent employees in the sector fell by one-third between 1992 and 2003, in part due to the increasing reliance on mechanical harvesting, especially in the richest and more mature sugarcane producers of São Paulo state. During the same period, the share of temporary or seasonal workers has fluctuated, first declining and then increasing in recent years to about one-half of the total jobs in the sector, but in absolute terms the number of temporary workers has declined also. The sugarcane sector in the poorer Northeast region is more labor intensive as production in this region represents only 18.6% of the country's total production but employs 44.3% of worker force in the sugarcane sector.

The manual harvesting of sugarcane has been associated with hardship and poor working conditions. In this regard, the study commissioned by the Dutch government confirmed that the main problem is indeed related to manual cane harvesting. A key problem in working conditions is the high work load. As a result of mechanization the workload per worker has increased from 4 to 6 ton per day in the eighties to 8 to 10 ton per day in the nineties, up to 12 to 15 ton per day in 2007. If the quota is not fulfilled, workers can be fired. Producers say this problem will disappear with greater mechanization in the next decade. Also, as mechanization of the harvesting is increasing and only feasible in flat terrain, more workers are being used in areas where conditions are not suitable for mechanized harvesting equipment, such as rough areas where the crops are planted irregularly, making working conditions harder and more hazardous.

Also unhealthy working conditions and even cases of slavery and deaths from overwork (cane cutting) have been reported, but these are likely worst-case examples. Even though sufficiently strict labor laws are present in Brazil, enforcement is weak. Displacement and seasonal labor also implies physical and cultural disruption of multifunctional family farms and traditional communities.

Regarding social responsibility

Social responsibility

Social responsibility is an ethical ideology or theory that an entity, be it an organization or individual, has an obligation to act to benefit society at large. Social responsibility is a duty every individual or organization has to perform so as to maintain a balance between the economy and the...

the ethanol production sector maintains more than 600 schools, 200 nursery centers and 300 day care units, as legislation requires that 1% of the net sugar cane price and 2% of the net ethanol price must be devoted to medical, dental, pharmaceutical, sanitary, and educational services for sugar cane workers. In practice more than 90% of the mills provide health and dental care, transportation and collective life insurance, and over 80% provide meals and pharmaceutical care. However, for the temporary low wage workers in cane cutting these services may not be available.

Effect on food prices

Some environmentalists, such as George Monbiot

George Monbiot

George Joshua Richard Monbiot is an English writer, known for his environmental and political activism. He lives in Machynlleth, Wales, writes a weekly column for The Guardian, and is the author of a number of books, including Captive State: The Corporate Takeover of Britain and Bring on the...

, have expressed fears that the marketplace will convert crops to fuel for the rich, while the poor starve and biofuels cause environmental problems. Environmental groups have raised concerns about this trade-off for several years. The food vs fuel

Food vs fuel

Food vs. fuel is the dilemma regarding the risk of diverting farmland or crops for biofuels production in detriment of the food supply on a global scale. The "food vs. fuel" or "food or fuel" debate is international in scope, with good and valid arguments on all sides of this issue...

debate reached a global scale in 2008 as a result of the international community

International community

The international community is a term used in international relations to refer to all peoples, cultures and governments of the world or to a group of them. The term is used to imply the existence of common duties and obligations between them...

's concerns regarding the steep increase in food prices

2007–2008 world food price crisis

World food prices increased dramatically in 2007 and the 1st and 2nd quarter of 2008 creating a global crisis and causing political and economical instability and social unrest in both poor and developed nations. Systemic causes for the worldwide increases in food prices continue to be the subject...

. On April 2008, Jean Ziegler

Jean Ziegler

Jean Ziegler is a former professor of sociology at the University of Geneva and the Sorbonne, Paris. He was a Member of Parliament for the Social Democrats in the Federal Assembly of Switzerland from 1981 to 1999...

, back then United Nations Special Rapporteur on the Right to Food, called biofuels a "crime against humanity", 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. Also on April 2008, the World Bank

World Bank

The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...

's President, Robert Zoellick

Robert Zoellick

Robert Bruce Zoellick is the eleventh president of the World Bank, a position he has held since July 1, 2007. He was previously a managing director of Goldman Sachs, United States Deputy Secretary of State and U.S. Trade Representative, from February 7, 2001 until February 22, 2005.President...

, 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."

Luiz Inácio Lula da Silva

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

European Union

agricultural subsidies

Agricultural subsidy

An agricultural subsidy is a governmental subsidy paid to farmers and agribusinesses to supplement their income, manage the supply of agricultural commodities, and influence the cost and supply of such commodities...

, and a problem restricted to U.S. ethanol produced from maize. The Brazilian President has also claimed on several occasions that his country's sugar cane based ethanol industry has not contributed to the food price crises.

A report released by Oxfam in June 2008 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 greenhouse gas balance. The report discusses some existing problems and potential risks, and asks the Brazilian government for caution to avoid jeopardizing 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."

A World Bank

World Bank

The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...

research report published on July 2008 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" accounted for 70-75% of total price rises. 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." 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 OECD 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 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% by 2015, while Brazilian ethanol from sugar cane reduces greenhouse gas emissions by at least 80% 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.

A study by the Brazilian research unit of the Fundação Getúlio Vargas

Fundação Getúlio Vargas

Fundação Getulio Vargas is a Brazilian higher education institution founded on December 20, 1944. It offers regular courses of Economics, Business Administration, Law, Social Sciences and Information technology management...

regarding the effects of biofuels on grain prices. concluded that the major driver behind the 2007–2008 rise in food prices

2007–2008 world food price crisis

was speculative activity on futures markets

Futures exchange

A futures exchange or futures market is a central financial exchange where people can trade standardized futures contracts; that is, a contract to buy specific quantities of a commodity or financial instrument at a specified price with delivery set at a specified time in the future. These types of...

under conditions of increased demand in a market with low grain stocks. The study also concluded that expansion of biofuel production was not a relevant factor and also that there is no correlation between Brazilian sugarcane cultivated area and average grain prices, as on the contrary, the spread of sugarcane was accompanied by rapid growth of grain crops in the country.

External links

BBC News video segment on ethanol in Brazil
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
Brazilian Ethanol Policy: Lessons for the United States
The Brazilian biofuels industry (2008 status)
"Carbonômetro" - Tool to estimate how much CO₂ emissions have been avoided by ethanol used by flex-fuel cars in Brazil since March 2003.
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 CNBC.com|07 Jun 2007|12:33 PM ET
Cogeneration in Ethanol Plants by P. M. Nastari
Corporate Sustainability in the Brazilian Sugar-Ethanol Sector, conducted by the Brazilian Foundation for Sustainable Development in a partnership with CSM/IMD
Ethical Sugar
From Alcohol to Ethanol: A winning trajectory History of ethanol fuel use in Brazil (English and Portuguese)
Future of Brazil Ethanol, BioFuel Industry
Global Trade and Environmental Impact Study of the EU Biofuels Mandate by the International Food Policy Institute (IFPRI) March 2010
Structure, Players in Brazil Ethanol and BioFuels
Sugarcane Agroecological Zoning - Brazilian Federal Government
Surveys of Brazil Ethanol and BioFuels
Towards Sustainable Production and Use of Resources: Assessing Biofuels, United Nations Environment Programme
United Nations Environment Programme
The United Nations Environment Programme coordinates United Nations environmental activities, assisting developing countries in implementing environmentally sound policies and practices. It was founded as a result of the United Nations Conference on the Human Environment in June 1972 and has its...

, October 2009

The source of this article is wikipedia, the free encyclopedia. The text of this article is licensed under the GFDL.

History

Economic and production indicators

Agricultural technology

Production process

Milling and refining

Fermentation, distillation and dehydration

Electricity generation from bagasse

Electric generation from ethanol

Overall energy use

Exports

Prices and effect on oil consumption

Comparison with the United States

Ethanol diplomacy

Benefits

Energy balance

Greenhouse gas emissions

Air pollution

Issues

Water use and fertilizers

Field burning

Effects of land use change

Deforestation

Social implications

Effect on food prices

See also

External links