Ethanol from sugar: Brazil's energy strength

Sep 29, 2006, 7:41 GMT

Rio de Janeiro - As Brazilian President Luiz Inacio Lula da Silva heads for likely reelection, taking centre-stage will be his ability to maintain a stable economy and lead developing countries in world trade talks.

Both of those efforts have no doubt been helped by Brazil's emergence as a leader in the promotion of alternative fuels - ethanol made from sugar cane in particular, which is used to power cars in lieu of petrol.

Brazil is the world's largest sugar cane harvester and producer of ethanol, with 16.5 billion litres in 2005. It is also the only major exporter of ethanol, selling 2.6 billion litres last year.

Developed through heavy government intervention since the 1970s, ethanol made its breakthrough with the emergence of flexible-fuel tanks in 2003, allowing drivers for the first time to fill their tanks with whichever fuel is cheaper.

More than 90 per cent of Brazil's gas stations now sell ethanol alongside conventional fuel - and even the latter is a mix of one- quarter ethanol and three-quarters petrol, the world's highest percentage.

Brazil now gleans more than 40 per cent of its transportation fuel from renewable sources, enabling the South American nation to declare itself independent of foreign energy sources.

Rather than guard its coveted status as the world's leader in renewable fuels, Brazil has led efforts to make the technology and benefits more widely available. Brazil has battled the World Trade Organization for the reduction of tariffs on importing ethanol and sugar in an effort to open up the market.

Lula himself talked up his renewable energy ideas at the G8 summit of industrial nations in St Petersburg in July, and earlier this month brokered a deal with India and South Africa to promote the use of ethanol in their own countries.

India is also a major producer of sugar cane, which grows primarily in tropical climates. The prospect of producing energy from agricultural produce is a cheery one for many poorer nations, which have struggled to build their economies on food exports alone.

That potential benefit has caught the eye of the World Bank, which is eager to promote sugar cane and ethanol mills in African and Caribbean countries where the climate is ideal.

For environmentalists, ethanol offers the prospect of a fuel up to 90 per cent cleaner than petrol - a lip-smacking figure given that one-quarter of all greenhouse gases are blamed on transportation.