I have compiled selected articles and reports that highlight some of
the economics involved with the development of Brazilian biodiesel and
ethanol. Some references are quite focused on individual issues you
raise, while others contain only a few paragraphs out of an entire
paper. In any case, I believe you will find a great deal of useful
information in the following references.
"The use of ethanol to fuel automobiles was initiated partially in
response to the oil shock of 1973, and as an alternative to oil to
promote self-sufficiency. In 1975, the government created the
Brazilian National Alcohol Program to regulate the ethanol market and
encourage the production and use of fuel ethanol. The program
guaranteed that all gasoline sold in the country would be blended with
22% anhydrous ethanol and that the pump price would remain competitive
with gasoline. Past sugarcane crop problems have slightly altered the
percentage of ethanol in Brazilian gasoline, however, mandated levels
have usually remained at around 20%. On June 1, 2003, the Brazilian
government raised the ethanol mix in gasoline from 20% to 25%. In July
2003, Volkswagen announced plans to have its entire Brazilian fleet's
engine converted from conventional to bi-fuel version by 2006. A
bi-fuel engine can run on either gasoline or ethanol (Flexible Fuel
Vehicles). Ethanol usually offers consumers a cheaper option to
gasoline. In the past, Brazilians became wary of relying on ethanol
due supply problems and cheap oil prices. The use of biomass fuel
ethanol is an effective strategy to mitigate greenhouse gases, as it
replaces oil, a more carbon-intensive fuel. While the manufacture of
crop fertilizers and extraction and purification of ethanol can be
highly energy intensive, this is not the case in Brazil, because much
of the work is done by hand."
From "Brazil has head start on ethanol production," By Michael Deibert
Por Energia Alternativa 27/03/2006
"Brazil, South America's largest economy, launched an ethanol motor
fuel program in 1975 and, against heavy odds, has developed a
cost-efficient alternative to gasoline. It appears now as though
Brazil's sugar industry, once viewed as a remnant of the country's
colonial past, may have a prominent place in the world's energy
future. About half of the country's 21,000 square miles of sugar cane
under cultivation is used to make ethanol that, according to the World
Bank, is being produced at a cost of $1 per gallon compared to $1.50
for gasoline. Getting to that point required decades of steady
pressure from Brazil's government, in ways that would be hard to
duplicate in the United States."
"In the 1970s, with Brazil being hit hard by Mideast oil shocks, the
ruling military dictatorship launched a national program to reduce the
country's dependence. It encouraged the construction of ethanol plants
by doling out low-interest loans to sugar companies, financed a
national distribution network and imposed subsidies to keep the price
of the fuel low. By the mid-1980s, most new cars sold in the country
ran exclusively on ethanol, and the share of Brazil's energy needs
filled by imported crude fell from around 80 percent in the late 1970s
to about 45 percent in 1990. When gasoline prices fell again in the
late 1980s, though, demand for ethanol stalled."
"In the late 1990s, the government of President Fernando Henrique
Cardoso ended government subsidies for Brazil's sugar industry,
spurring the sector to new competition and innovation. "After the end
of state protection, a number of sugar mills went bankrupt, but now
they are coming back and they are fully restructured," says Bruno
Soares, an attorney with the New York business law firm Chadbourne &
Parke. The government also switched its emphasis from alcohol-only to
"flexible fuel" vehicles, mandating that all gasoline must be mixed
with at least 25 percent ethanol. Now cars that can run on ethanol,
gasoline or a mixture of the two account for 70 percent of all cars
manufactured there.That has made motorists happy, because they can
easily shift to whichever fuel is cheaper."
"With at least 300 sugar mills in Brazil employing an average of 2,000
people at each facility, Brazil's politicians also have seen the
advantages of investing in innovation.
"For the government, each mill creates a lot of employment," says
Frederico Humberg, executive director of the Brazilian agribusiness
company Bunge Ltd. However, the conversion has not been without its
hitches, especially supply problems.
"In January, Agriculture Minister Roberto Rodrigues announced that the
country's sugar cane industry would need an estimated $10 billion
worth of investment by the year 2012 to meet rising demand. That
reflected the need to build 73 new mills to convert raw sugar into
ethanol, and to plant another 10,000 square miles of cane, nearly a 50
percent increase. Also, the percentage of ethanol required in auto
fuel recently was temporarily lowered to 20 percent because of limited
supply. Still, Brazil plans to raises its profile as an ethanol
exporter to the world. The country exported $600 million worth of
ethanol last year, and that figure is expected to more than double to
$1.3 billion by 2010."
"Brazil is going to "replace other players," says Soares. "Brazilian
ethanol is cheaper, more efficient."
The following 27-page report contains some excellent information
concerning governmental support for Biodiesel development in Brazil:
"Biodiesel in Brazil - Overview 2005."
"As part of its ongoing energy matrix diversification, Brazil has
taken a further step in promoting its renewable sources policy. Almost
thirty years after creating Proálcool (the National Alcohol
Programme), the most important fossil fuel substitution initiative in
the global automobile market, Brazil has now authorised the commercial
use of a new fuel - biodiesel. This is a biodegradable product
originating from sources such as vegetable oils,
animal fats, industrial residues, and sewage. Under the PNPB (the
National Biodiesel Production and Utilisation Programme), the
Brazilian Government has created a production chain, defined credit
lines, structured its technological base, and enacted a law regulating
this sector. Over the next three years, Brazil will sanction the
addition of 2% biodiesel to diesel oil, a mixture that will be
compulsory from 2008 and which will increase to 5% in 2013."
"Roundtable: Successes with Bioenergy. The Brazilian Experience."
Israel Klabin, President Brazilian Foundation for Sustainable
Scroll down to 2. Bioenergy Initiatives Already Imprlemented in Brazil
The following lengthy report (339 pages) has some interesting material
on Biodiesel, social issues, etc, that you might want to review. You
can scroll through the Table of Contents for relevant sections.
See "Brazil: A Country Profile on Sustainable Energy Development."
A Powerpoint Presentation:
"Ethanol in Brazil: A Successful Experience." Washington D.C. 2006
"The Brazilian Ethanol Program - Biofuels for Transport." Prof. Emilio
Lèbre La Rovere, Federal University of Rio de Janeiro, Brazil.
"BRAZILIAN SUGARCANE - ETHANOL: LESSONS LEARNED." Prof. Suani Coelho
CENBIO - The Brazilian Reference Center on Biomass. 2005
"BIODIESEL - THE NEW FUEL FROM BRAZIL." NATIONAL BIODIESEL PRODUCTION
& USE PROGRAM.
A very good historical overview can be found in the following paper:
"Ethanol: Lessons from Brazil. A High Growth Strategy for Ethanol, May
2006. David B. Sandalow, Environment Scholar, Foreign Policy Studies.
The Brookings Institution
"Alternative Fuel in Brazil - Flex-Fuel Vehicles."
"LIQUID BIOFUELS IN BRAZIL." Luiz Carlos Corrêa Carvalho
ABSTRACT: "This paper seeks to show the evolution of both the
production and use of ethanol in Brazil, characterizing its importance
among the liquid fuels in the country. At the same time, it qualifies
the competitiveness of ethanol in Brazil under the current conditions,
presenting the positive externalities of the renewable product and
demand projections. At the end, it seeks to characterize the
fundamental works on the consolidation of ethanol as an international
Proceed to paper...
"REVIEW OF THE EU BIOFUELS DIRECTIVE - PUBLIC CONSULTATION EXERCISE."
Responses and comments by the Brazilian Government. Brussels, 10 July
"Bio-ethanol: Climate Benefits with Responsible Production." Ilan Kruglianskas
Agriculture and Environment Programme. WWF-Brasil
"BRAZIL: Fuel Alcohol Diplomacy," by Mario Osava. May 30, 2006
"Brazil Exploits Ethanol as a Substitute for Petroleum." Innovacion y
"With Big Boost From Sugar Cane, Brazil Is Satisfying Its Fuel Needs."
The New York Times, April 10, 2006
"As Brazil Fills Up on Ethanol, It Weans Off Energy Imports," by David
Luhnow and Geraldo Samor. The Wall Street Journal, 16 January 2006
From "Luiz Fernando Furlan - "Ethanol and Renewable Fuels: The
Brazilian Experience." April 20, 2005
"Brazil is the biggest consumer of ethanol in the world. Currently,
Brazil has six million hectares devoted to ethanol production from
sugar cane. However, according to research by Embrapa (The Brazilian
state?s Agricultural Research Corporation), there is the potential for
up to 90 million hectares of sugar cane to be planted across a much
broader geographical area, southern Brazil being the only region
unsuitable for ethanol production. Meanwhile, the price of ethanol is
currently lower than oil, and it is a cleaner burning fuel."
"As a labor-intensive activity, ethanol production can also create
jobs and therefore encourage development, particularly in Brazil?s
poorest areas. Today, one million people are employed as a result of
the sugar cane industry?s activities in Brazil. But the sector, if
expanded, could create an additional one million jobs directly and 1.5
"The average size of a sugar cane plantation is 20 thousand hectares,
producing around 1.5 million tons of sugar cane per annum. The
organization of the firm can vary, from a single large plantation to a
farmers? cooperative. In Brazil, there are about 100,000 independent
producers of sugar cane whose crops are used to produce not only
ethanol but also Cachaça, Brazil?s national drink, a type of rum."
"BRAZIL?S ETHANOL PROGRAM: THE CASE OF HIDDEN SUGAR SUBSIDIES," By
Troy G. Schmitz, Andrew Schmitz, and James L. Seale, Jr. JRTC 03-1
"Brazil Is World's Ethanol Superpower." SAO TOME, Brazil, March 13, 2006
"Brazil's successful ethanol program fuels U.S. interest." BY MONTE
REEL. Washington Post Service. Aug. 21, 2006
"BRAZIL'S ROAD TO ENERGY INDEPENDENCE." Washington Post. August 2006
"Brazil Starts Pushing Ethanol All Over the World." BrazzilMag. 08
September 2006. http://www.brazzilmag.com/content/view/7204/53/
"Brazil's Ethanol Won't Substitute Oil at Least for Three Decades."
Written by Omar Nasser. 09 May 2006
"Brazil Government Could Move Up 5% Biodiesel Goal to 2010." Jul. 24 2006
"Brazil is studying the possibility of moving up an obligatory 5% mix
of biodiesel in the country's diesel fuel to 2010, three years earlier
than mandated by law, according to a report in local Agencia Estado
newswire on July 20......'
"Brazil Sees Ethanol as Its New Economic Frontier," by Alana Gandra.
11 April 2006. http://www.brazzilmag.com/content/view/6070/53/
"Sugar Powers a Revolution on Brazil?s Roads - Bio-fuel movement is
gaining momentum on petrol station forecourts," by Tom Phillips and
David Gow. The Guardian, 23 November 2005
"THE BRAZILIAN EXPERIENCE ON DEVELOPING A ALCOHOL-DIESEL BINARY FUEL."
Economy and Energy 2002 http://ecen.com/eee20/adailsoe.htm
From Ethablog - "the only blog in English dedicated to Brazilian ethanol."
"HISTORY OF BRAZIL'S ETHANOL PROGRAM."
(Non-English version - http://www.biodieselbr.com/proalcool/pro-alcool.htm)
* See sidebar for other translated articles which might be of interest.
BOOKS AND ARTICLES AVAILABLE FOR PURCHASE
"Current Status of Biodiesel Development in Brazil." Authors: Ramos,
Luiz Pereira; Wilhelm, Helena Maria. Applied Biochemistry and
Biotechnology, Volume 123, Numbers 1-3, April 2005
"Brazil's National Alcohol Program - Technology and Development in an
Authoritarian Regime." Publication date - 1990
"How are political systems likely to shape the choices, uses, and
effects of technological progress? This important new book addresses
that question in a case study of Brazil's national alcohol program,
Read it onine as a Questia member
"The Brazilian National Alcohol Programme." Authors: Gochnarg, I.
In: Biomass for energy. (A80-52851 24-44) London, International Solar
Energy Society, 1979, p. 30-50.
"Brazil since 1980." Series: The World Since 1980. Francisco Vidal Luna
Universidade de São Paulo, Herbert S. Klein Stanford University, California
"This is a general survey of Brazilian society and of the Brazilian
economy and political system since 1980. It describes the basic
changes occurring as Brazil was transformed from a predominantly rural
and closed economy under military rule into a modern democratic,
industrial, and urbanized society, with an extraordinary, world-class
commercial agriculture in the past sixty years..."
As you can see, there is quite a bit of information to wade through,
but I trust you will find it both interesting and helpful for your
ethanol OR biodeisel Brazil
history of Brazilian Ethanol Program
Brazilian National Alcohol Program
Economic history of Brazil and ethanol OR biodiesel
economics of Biofuel in Brazil
Transpetro study ethanol pipeline Brazil
consumer use of ethanol in Brazil
consumer use of biodiesel in Brazil
government support for ethanol OR biodiesel in Brazil
ethanol economy Brazil
biodiesel economy Brazil