Brazil has become a major producer of ethanol, a biofuel that competes with gasoline. Monocultures of sugar cane form a monotonous landscape in the southern state of São Paulo and in the country's central-west region, but they help decarbonize transport in the country. Credit: Mario Osava / IPS

By Mario Osava
RIO DE JANEIRO, Oct 22 2025 (IPS)

Quadrupling the production and use of sustainable fuels by 2035 is the goal of a new international initiative to drive energy transition and mitigate the climate crisis, which will be launched during Brazil’s climate summit in November.

The Belem Commitment on Sustainable Fuels, led by Brazil with the support of India, Italy, and Japan, awaits the support of other countries after its official launch during the so-called Climate Summit on November 6 and 7 in Belem, northern Brazil.

The meeting of heads of state and government will this time precede the 30th Conference of the Parties (COP30) on climate change, which will be hosted by Belem from November 10 to 21. The unusual separation between the COP and the summit aims to mitigate the accommodation problems of the Amazonian city.

The commitment, nicknamed “Belem 4x,” is based on a report by the International Energy Agency that points to the possibility of quadrupling the volume, adding new alternatives such as green hydrogen, sustainable aviation fuels (SAF), and shipping and synthetic fuels to ethanol and biodiesel.

At COP28, held in 2023 in Dubai, it was agreed to initiate “a transition away from fossil fuels” as an indispensable measure to contain global warming to 1.5 degrees Celsius. In Belem, the goal is to implement that consensual decision.

“Brazil was careful not to limit the initiative to biofuels in order to include various sustainable fuels, an important distinction because there are countries, especially in Europe, that oppose biofuels,” warned Claudio Angelo, international policy coordinator for Climate Observatory, a Brazilian coalition of 133 social organizations.

Objections to biofuels include potential environmental damage, land conflicts, and competition with food production, he said by phone to IPS from Brasilia.

Extensive cattle ranching has degraded 100 million hectares in Brazil. One third of this area can be recovered for the cultivation of sugar cane, corn, and oilseeds to double biofuel production, according to a study by the Institute for Energy and Environment. Credit: Mario Osava / IPS

Biofuels market

It is an old Brazilian dream to create a large international biofuels market, due to its large ethanol production and its potential to expand it.

Brazil tried, unsuccessfully, to promote this market in the 1990s and early 21^st century, based on the existence of many sugar cane producing countries, the crop with the highest productivity for this biofuel.

Cuba, once the world’s largest sugar exporter, rejected the proposal with the argument of prioritizing food, despite the decline of its sugar industry and its lack of energy, due to its dependence on imported oil, which became scarce after the fall of the Soviet Union, its major supplier, in 1991.

Brazil became the largest sugar exporter in the mid-1990s, two decades after launching its National Alcohol Program to replace part of its gasoline with ethanol.

It sought to mitigate the economic crisis caused by the rising oil prices, which tripled in 1973 and doubled again in 1979. At that time, the country imported about 80% of the crude oil it consumed; today it exports oil and ethanol.

Many countries use ethanol, blended into gasoline, as a way to reduce pollution. In Brazil, the blend already reaches 30%, and pure ethanol is also used as automotive fuel.

But most passenger cars in the country today are “flex,” consuming gasoline or ethanol and blends in any proportion.

In 2023, the Global Biofuels Alliance was born in New Delhi during the annual summit of the Group of 20 (G20) most relevant industrial and emerging economies, in a new attempt to promote its production.

The City Park, under construction in January, in the Amazonian city of Belem, which will host the debates and negotiations among government delegations and the United Nations at COP30, from November 10 to 21. Credit: Rafa Neddermeyer / COP30

Ambitious goal

Now, at COP30, the aim is to expand the attempt to replace fossil fuels with an ambitious goal: to quadruple the current production of alternative fuels within 10 years.

This follows the path charted at COP28, held in Dubai in 2023, where it was agreed to initiate “a transition away from fossil fuels” as an indispensable measure to contain global warming to 1.5 degrees Celsius. In Belem, the goal is to implement that consensual decision.

Currently, this production, basically of biofuels, reaches 175 billion liters, about two-thirds ethanol and one-third biodiesel. The United States surpasses Brazil as the largest producer.

Brazil produced 36.8 billion liters of ethanol and 9.07 billion liters of biodiesel in 2024. In recent years, production of corn-based ethanol has grown, utilizing the surplus of this grain in the country’s central-west region. Its share is already close to 20% of the total.

A study by the Institute for Energy and Environment (Iema), released on October 9, states that Brazil will be able to double this production by 2050 without deforesting new areas. The utilization of degraded pastureland would be sufficient to achieve the goal.

The country has about 100 million hectares of such pastureland, almost entirely abandoned. This is equivalent to twice the territory of Spain and is set to increase, as Brazil has 238 million cattle, far exceeding its 213 million human inhabitants.

From this total, the cultivation aimed at doubling biofuels could occupy 25 to 30 million hectares. Plenty of land would remain for the expansion of food agriculture, emphasized Felipe Barcellos e Silva, a researcher at Iema and author of the study.

According to his calculations, a portion of the pastureland would be allocated to reforestation for biome restoration and environmental protection areas, another part to the recovery of the pasturelands themselves for more productive cattle ranching.

Between 55 and 60 million hectares would remain for energy and food agriculture, with about half for each.

The area for biofuels would vary depending on the choice for more biodiesel, which requires the cultivation of oilseeds, or more ethanol, in which case expanding the area of sugar cane or corn.

The alternatives comprise six scenarios that combine priorities for different raw materials and the option to produce other fuels, such as SAF and green diesel, which is different from biodiesel.

Soy is another monoculture that occupies vast expanses of land in central-western and southern Brazil. Its oil fuels the biodiesel industry by offering surpluses at a low price, since soybean bran is the most in-demand byproduct for livestock feed. Credit: Mario Osava / IPS

Persistent alternatives

“Biodiesel has a problem because it is a degradable organic compound,” unstable, while green diesel is a product of the same vegetable oil but subjected to hydrotreatment and has “physicochemical properties similar to mineral diesel,” explained Roberto Kishinami, a physicist and strategic specialist at the non-governmental Institute for Climate and Society.

Green diesel, he assured, fully replaces fossil diesel without damaging vehicles and has the advantage of emitting fewer urban pollutants than biodiesel, such as fine particulate matter, carbon monoxide, and nitrogen oxide.

“The dozens of biodiesel plants (installed in Brazil) will disappear at some point. They were a temporary solution, favored by the soybean oil surplus, when soybean bran had growing demand,” as livestock feed, Kishinami told IPS by phone from São Paulo.

In his assessment, the energy transition and the decarbonization of transport and industry need sustainable fuels, since electrification is not economically viable for all activities. A combination of the two solutions will have to prevail.

The creation of an international market for these fuels, especially biofuels, depends on standardizing norms and patterns worldwide, a difficult task especially given the rigid European demands.

Furthermore, it faces geopolitical issues, such as “the US-China trade war that will dominate the coming decades,” concluded Kishinami.

Biofuel production in Brazil is growing not only through the expansion of crops but also through technological advances and the utilization of waste.

Second-generation ethanol is already being produced from cane straw, and biomethane, which is equivalent to natural gas, is produced through the biodigestion of vinasse generated in ethanol production, noted Silva.

There is also the beginning of cultivation of the macauba palm (Acrocomia aculeata), which has different names in Latin America and has high oil productivity.

Electrification will take time. It is relatively fast for light vehicles but slow for heavy vehicles, whose useful life reaches about 20 years. This is where decarbonization is achieved through biofuels, argued Silva.

“The transition in transport will continue until at least 2050,” after which biofuels will be able to meet other demands, including power generation, he concluded in a telephone interview with IPS from São Paulo.

The commitment to quadruple sustainable fuels is positive, but it cannot in “any way” dominate the energy debate at COP30, warned Angelo.

“The success of COP30 depends on promoting the implementation of a just, orderly, and equitable transition to eliminate fossil fuels, which are the main cause of global warming,” he concluded.

This G20 ministerial meeting, held in Rio de Janeiro on February 28 this year, discussed the global energy transition, with biofuels as a central issue. Credit: Paulo Pinto / Agência Brasil

By Mario Osava
RIO DE JANEIRO, Nov 5 2024 (IPS)

Holding this year’s presidency of the Group of 20 (G20) large industrial and emerging economies is allowing Brazil to push forward the dream of creating a global biofuels market without the current trade barriers.

Brazil is trying, at least since the beginning of this century, to free up global trade in ethanol, but so far without success. The scenario is more favourable now, with the worsening of the climate crisis and other countries joining the production and consumption of bioenergy.

Presiding the G20 this year, Brazil is in charge of the issues and projects to be discussed, creating working groups and promoting agreements, which will crystallise at the group’s annual summit to be held on 18-19 November in Rio de Janeiro.“There is a conflict of interests, of split personality. If Brazil wants to lead in biofuels, it must rule out new oil exploration”: Pedro de Camargo Neto.

Luiz Inácio Lula da Silva’s government has promoted social issues and included biofuels as a central aspect of the energy transition. Several of its proposals were approved in sectoral working groups or meetings of ministers, experts and civil society throughout 2024.

“The current context, driven by Brazil’s more active leadership in the G20 and regulatory progress on alternative fuels, offers a more optimistic outlook for the country’s success in expanding its biofuels market,” summarised Rafaela Guedes, senior fellow at the Brazilian Centre for International Relations (Cebri).

“The focus is no longer limited to ethanol,” she said in an interview with IPS in Rio de Janeiro. New products, such as sustainable aviation fuel (SAF) and bio-bunker for maritime transport, open up multiple markets and reduce the risk of dominant suppliers.

These are joined by biodiesel and green diesel, both derived from animal and vegetable inputs but different in their production process and properties, the latter being chemically identical to fossil diesel.

Then there is ethanol, already produced on a large scale, and biomethane, equivalent to natural gas and the product of refining biogas extracted from animal manure, and agricultural, urban and industrial waste.

All these products gained new regulations and incentives in Brazil through the so-called Future Fuels Law, passed by the legislative National Congress in September and effective from 8 October 2024.

The new legislation should attract investment and reduce trade barriers by defining rules and standards in a country that leads biofuel production and presents itself as “a supplier and also a strategic partner for innovation and energy security”, said Guedes, an economist specialising in energy transition.

The biogas and biomethane plant of Cocal, a company that produces ethanol and sugar from sugarcane and biogas, biomethane and other derivatives from waste, in Narandiba, in the southern Brazilian state of São Paulo. Credit: Mario Osava / IPS

Fear of dependence

Ethanol thrived as a free trade fuel partly out of fear of being held hostage by a few producers. Brazil and the US account for around 80% of its global production, with 35.4 billion litres and 58 billion litres respectively in 2023.

Brazil tried to encourage production in countries with high production or potential for increased sugar cane planting, such as India, Cuba and Mexico, in order to lower barriers to international ethanol trade.

In addition to the fear of dependency, environmental and food security concerns remain another stumbling block. It is argued, especially in Europe, that bioenergy takes land away from food production.

That was the claim of Cuba, which until the 1980s was the world’s largest exporter of sugar, but whose sugar cane production subsequently fell to the point where it is now practically limited to supplying the domestic market of 10 million inhabitants, who are suffering from a severe energy crisis.

But now India, previously reluctant, has joined ethanol production, as have other countries, since its consumption, blended with gasoline, has spread to more than 70 countries. Investment in biofuels has increased in order to reduce greenhouse gas emissions.

“This diversification of producers reduces the possibility of monopolies” and thus the fears of dependency, according to Guedes, who says growth in the production capacity of emerging countries and the consequent expansion of global supply are favourable factors for a freer global market for biofuels.

“India has invested heavily in biofuels in its energy security and emissions reduction strategy. Its policies of using agricultural waste to produce ethanol and biodiesel contribute to increasing its productive capacity, as a potential exporter in the medium term,” she cited as an example.

Other Asian and Latin American countries are using their abundant biomass and organic waste resources to produce bioenergy, biomethane and green diesel, in what represents another model.

Rafaela Guedes, an economist specialized in energy transition, believes conditions are favourable for the creation of an international biofuels market, as Brazil desires. Credit: Cebri

Inputs are waste, not food

Restrictions based on food security were also relaxed because biofuels are largely made from waste, whether agricultural, urban or industrial.

Second-generation (2G) ethanol, made from waste such as bagasse, is another solution. The United States and Brazil have plants producing it, which are set for rapid expansion.

In Brazil, Raizen, a large sugar and bioenergy producer with the participation of the British oil consortium Shell, has been operating its first 2G ethanol plants since 2015 and estimates that this technology can produce 50% more ethanol than a similar area planted with sugarcane.

Guedes also adds that the International Energy Agency has defined sustainable agricultural practices, such as crop-livestock-forest integration, which is expanding in Brazil, traceability in production chains and criteria for defining sustainable energy, which strengthen confidence in biofuels that benefit the climate.

These are policies that promote so-called low-carbon agriculture, preserve soil quality and ensure that Brazil’s agricultural frontiers can expand sustainably and without affecting food security, she said.

Ambiguity

But Brazil’s decision to promote biofuels, even internationally, causes bewilderment according to Pedro de Camargo Neto, a cattle rancher who leads a movement of agribusiness, that of large farmers, that seeks to reconcile his sector with environmentalism, after decades of stubborn antagonism.

President Luiz Inácio Lula da Silva (center) visited Raizen’s bioenergy park in Guariba, a sugarcane-producing municipality located 340 kilometers from São Paulo in southern Brazil, in May. Credit: Ricardo Stuckert / PR

“There is a conflict of interests, of split personality. If Brazil wants to lead in biofuels, it must rule out new oil exploration,” he told IPS by telephone from Bandeirantes, a municipality in the central-western state of Mato Grosso do Sul, where he has a farm.

He criticizes the intention of Petrobras, the national oil company, to drill near the mouth of the Amazon River in search of oil deposits.

Large oil deposits are believed to exist in the Equatorial Margin in northern Brazil, an extension of the sea basin that already produces oil in Guyana and Suriname.

New and abundant stocks would make oil and gas cheaper, to the detriment of biofuels, argued Camargo, who has previously chaired the Brazilian Rural Society, a key farmers’ group, and held top positions in the agriculture ministry.

“Brazil does not know what it wants,” he said.

This is because it promotes a free and global market for biofuels, for economic and environmental reasons, and at the same time wants to become an oil producer, to the detriment of the climate and its own strategy.

The country currently ranks eighth in the world in oil production, with 4.3 million barrels (each holding 159 litres) per day on average in 2023.

The country should advocate international measures to make fossil fuels more expensive. This would enable a biofuels boom everywhere, with increased investment in a market in which Brazil is already a leader. Europe has already taken steps in this direction, Camargo said.

Oil exploration near the mouth of the Amazon is blocked by demands from the Brazilian Institute of Environment and Renewable Natural Resources, which considered Petrobras’ evaluations and guarantees insufficient.

An authorisation or denial of exploratory drilling will be ‘technical’, based on local environmental impacts, according to Environment Minister Marina Silva.

This is a mistake, according to Camargo, who calls for a broader assessment, not because of the local consequences, but due to the global climatic effects, i.e. greenhouse gas emissions, and because of the economic strategy of prioritising biofuels, which also favours the country’s foreign policy.

One phase of Colombia's sugarcane agroindustrial production consists of burning bagasse to generate biofuels. In the picture, workers arrange sugarcane waste in a field in the municipality of El Cerrito, in the southwestern department of Valle del Cauca. CREDIT: Emilio Godoy/IPS

By Emilio Godoy
BOGOTA, Mar 17 2022 (IPS)

As a visitor drives across the plains of the department of Valle del Cauca in southwestern Colombia, green carpets dominate the view: sugarcane fields that have been here since the area got its name.

The long tentacles of dirt roads draw the visitor into the thicket of golden-crested flowering green plants, which will be cut to ground level in a few months, the start of an industrial process and the restart of an annual agricultural cycle.

But this crop has left a lasting and damaging imprint on the soils, some of the most fertile in this South American nation of 51.7 million people.

Irene Vélez, an academic at the public University del Valle, said legislative changes and the opening of the market to imported sugar have led to the shift from sweetener to fuel.

“One of the consequences of this process is the expansion of the agricultural frontier to other regions of the country, because the land is cheaper and there is a different system of relations between landowners and the agro-industrial sector,” she told IPS from the Portuguese city of Coimbra, where she is doing post-doctoral studies.

Along with sugar and molasses for industrial consumption, sugarcane also provides ethanol or ethyl alcohol, which by law has been blended since 2005 in a volume of 10 percent per liter of gasoline in Colombia.

Proponents argue that this biofuel helps curb dependence on oil, and improves the octane rating of gasoline by oxygenating, which reduces urban pollution.

But in contrast, a vehicle consumes more blended fuel for the same trip due to its lower calorific value than gasoline and, the higher the mix, the higher the emission of the carcinogens formaldehyde and acetaldehyde and ozone, especially in winter, which cause respiratory problems, according to a 2007 study by researchers at Stanford University in the United States.

Colombia is the world’s 15th largest sugarcane producer, supplying 22.87 million tons of milled sugarcane per year, according to data from 2021, when it fell by a slight three percent compared to the previous year, according to data from the Sugarcane Association (Asocaña), which groups sugarcane producers.

In parallel, the country refined 396 million liters of ethanol in 2021, 0.5 percent less than the previous year. But domestic production does not meet demand, so last year it imported an additional 64 million liters, mostly from the United States, a drop of almost 400 percent compared to a year earlier, according to Asocaña.

Colombia is the third largest ethanol producer in the region, after Brazil and Argentina. This South American nation extracts ethanol from sugarcane and biodiesel from palm oil. The industry enjoys tax exemptions and subsidies, thanks to the Sugar Price Stabilization Fund, which has been in operation since 2000.

The expansion of sugarcane cultivation in Colombia has its epicenter in the Cauca River valley, in the southwest of the country, and has left a trail of water exploitation, reduction of biodiversity and pollution from the use of pesticides and synthetic fertilizers, which is not compensated by the use of part of the crop to produce biofuels. CREDIT: Emilio Godoy/IPS

Problematic expansion

The appearance of ethanol on the energy scene extended the sugarcane frontier in Colombia and fortified the vertical integration of the industry.

In the Cauca River valley, where most of the country’s crop is concentrated, sugarcane covers more than 225,000 hectares, which “is close to the total area available for planting sugarcane” in the region, according to Asocaña.

There are 14 sugar mills operating in the area, which directly cultivate 25 percent of the fields, while buying the rest of the cane from some 2,750 producers. The average size of the 3,300 farms that supply the mills is 63 hectares. In addition, they operate 12 energy cogeneration facilities, powered by sugarcane bagasse.

But that expansion has left social, environmental, economic and cultural impacts on local communities, says the report “The Green Monster. Perspectives and Recommendations from the Black Communities of Northern Cauca, Colombia regarding the Sugar Sector in Colombia”, published in June 2021 by the non-governmental organizations Palenke Alto Cauca-PCN and the UK-based Forest Peoples Programme.

The main impacts include the effects on soil, rivers and groundwater due to the use of pesticides such as glyphosate, soil compaction caused by the intensive use of agricultural machinery, soil erosion, polluting emissions due to the practice of burning sugarcane fields before replanting, deforestation arising from the increase in the area planted, and the monopolization of water sources.

The expansion of large-scale sugarcane plantations in Valle del Cauca has resulted in loss of land, damage to water resources, health problems, displacement and violence.

Carlos Molina, director of the El Hatico nature reserve in the municipality of El Cerrito, in the southwestern Colombian department of Valle del Cauca, stands in the middle of a cut sugarcane field on his farm. He advocates the transition from conventional sugarcane to an organic crop that contributes to the use of biofuels for energy decarbonization. CREDIT: Emilio Godoy/IPS

Seeking more sustainable sugarcane production

Carlos Molina, legal representative and one of the owners of the El Hatico company, said it is possible to reverse the damage caused by sugarcane, as he gestured to the surrounding fields.

“If we don’t restore now, we are going to run out of fuel. If they don’t change things, producers are going to go bankrupt. The solution is to show the alternatives and offer incentives for transformation,” he told IPS during a tour of his farm’s sugarcane crop in the municipality of El Cerrito, in Valle del Cauca.

El Hatico is a 285-hectare farm, of which 110 hectares are used for organic sugarcane production and 76 hectares for 245 grazing dairy cows. Thanks to the farm’s sustainability, it has achieved nature reserve status.

Faced with the loss of income due to soil deterioration, in the early 1990s the owners began a shock therapy program to abandon irrigation, pesticides and synthetic fertilizers and introduce natural fertilizers and other agroecological practices.

“We made an abrupt transition and that cost us 30 percent of our production, then we recovered. Sustainable management and value-added improve yields,” said Molina, who belongs to the eighth generation of sugarcane growers in his family.

For example, a conventional hectare requires about 180 kilograms of nitrogen and 12 billion cubic meters of water per year, while an organic farm needs much less.

The legal framework for biofuels began in Colombia in 2001 with regulations on their use and the creation of incentives for their production, use, marketing and consumption. In 2004, another regulation expanded the conditions to stimulate the production and marketing of biofuels of plant and animal origin to obtain biodiesel.

Thus, the introduction of the blend began in 2005 with the E10 combination, while the production of biodiesel began in 2008, with the addition of five percent of this fuel.

That same year, the National Council for Economic and Social Policy, which brings together seven ministries and the governmental scientific sector, issued guidelines to promote the sustainable production of biofuels in the country, proposing strategies to this end.

As a result, sugarcane refineries for biofuels started up in 2006, six of which operate in Valle del Cauca and one in the central department of Meta.

In 2013, the blend of ethanol per liter of gasoline increased to 10 percent and that of biodiesel to 12 percent.

A sugarcane plantation in the municipality of El Cerrito, in the department of Valle del Cauca, in southwestern Colombia. Cutting, slashing and burning are the three steps of cultivation: cutting the sugarcane, harvesting the crop and setting fire to the residues, a practice that is harmful to the health of the soil and the air. CREDIT: Emilio Godoy/IPS

Pros and cons

The shift of sugarcane towards ethanol production is paradoxical, as the crop causes environmental impacts but the fuel reduces emissions of carbon dioxide (CO2), the gas generated by human activities that is responsible for global warming.

Sugarcane ethanol reduces 74 percent of polluting emissions, compared to corn and canola ethanol – 45 percent and 25 percent, respectively – according to the 2012 study “Life Cycle Assessment of the Biofuels Production Chain in Colombia“, sponsored by the Inter-American Development Bank and the national Ministry of Mines and Energy.

By law, ethanol emissions have had limits in the country since 2017. Data from the non-governmental Sugarcane Research Center for six mills indicate that the average in 2016 was 551 kilograms of CO2 per cubic meter of fuel and 558 in 2017.

These results were below the regulatory ceiling of 924 kilograms for 2017 and 889 for the following year. In 2021, the ceiling stood at 780 kilograms.

The sugarcane manufacturing process generates the greatest amount of pollution, with 249 kilos of CO2, followed by planting and harvesting (181 kilos), effluent treatment (89) and transportation to blending centers (39).

Biofuels, part of the NDC

In its 2020 Nationally Determined Contribution (NDC) update, Colombia pledged to reduce its emissions by 51 percent by 2030, down from 258 million tons of CO2 in 2015, the base year, to 169 million tons, mainly by combating deforestation.

Within this voluntary goal, Colombia pledged that at least 20 percent of its energy mix would be made up of biofuels by that year, subject to financial support from industrialized countries.

The independent Climate Action Tracker calls the NDC “highly insufficient”, as other approaches are needed, especially in energy and transportation. Although transportation accounts for 12 percent of the country’s total emissions, mitigation actions, such as the deployment of electric cars, are insufficient.

The Colombian government projects stable ethanol demand between 2022 and 2025, of about 60,000 barrels per day of the biofuel.

“The agroecological transition could be completed in three years, without any problem,” said Molina.

But Vélez disagreed. “It is associated with an agro-technological package that involves improved seeds that need pesticides, fertilizers and privatized seeds from transnational corporations. There is no point in switching from sugarcane to organic pineapple, for example. If land grabbing continues, we are not generating the necessary transition,” he said.

The biodigester and part of the biogas plant of the Cocal company, surrounded by a sugarcane plantation on all sides, in the municipality of Narandiba, in the west of the southern Brazilian state of São Paulo, where sugarcane has replaced cattle ranching as the main economic activity. CREDIT: Mario Osava/IPS

By Mario Osava
NARANDIBA, Brazil , Dec 20 2021 (IPS)

First came sugar. For four centuries, it was the main sugarcane product in Brazil. But since the 1970s sugarcane has grown and diversified as a source of energy: ethanol, electricity and biogas.

“Sugarcane is the green oil,” said André Alves da Silva, commercial and new products director of Cocal, as the company Comércio Indústria Canaã Açúcar e Álcool Ltda. is better known, which started large-scale production of biomethane, i.e. refined biogas, a renewable and clean equivalent of natural gas.

“We have a biofactory here,” he told IPS in an interview in the Cocal plant in Narandiba, a municipality located in the west of the southern state of São Paulo.

Referring to the plant whose scientific name is Saccharum officinarum as “sugarcane” has become obsolete in this region.

In addition to sugar and ethanol, electricity is generated from sugarcane bagasse, and biogas and other by-products are also created, such as biofertilizers, carbon dioxide gas and dried yeast, leftovers from alcohol fermentation, which, when processed, serve as protein-rich animal feed.

Biomethane in place of gas

The big novelty is biomethane, produced since June, as the starting point of a project that will bring gas to three closely grouped cities: Narandiba, Pirapozinho and Presidente Prudente, with a combined population of 264,000 people.

GasBrasiliano, a company of the state-owned oil conglomerate Petrobras, will be in charge of distribution and is building a 65-kilometer gas pipeline, which is scheduled to be inaugurated in June 2022.

“It is our first biomethane project, the first among many,” Alex Gasparetto, director-president of the distributor that holds the concession for piped gas in the west and north of São Paulo state, an area encompassing 375 municipalities and 9.2 million inhabitants, told IPS.

São Paulo, the richest and most populated state in Brazil, home to 46 million of the 214 million inhabitants of this enormous country, accounts for more than half of the national sugarcane production, in more than 150 agroindustrial sugar or ethanol plants next to sugarcane plantations, most of them in the GasBrasiliano concession area.

Sugarcane is the “green oil”, says André Alves da Silva, commercial and new products director of Cocal, an agroindustrial company located in Narandiba, in southern Brazil, which uses almost everything from sugarcane to produce electricity, biogas, biomethane, biofertilizers, yeast as animal feed and other gases, in addition to sugar and ethanol. CREDIT: Mario Osava/IPS

“The potential is huge, sugarcane biomethane can replace all the diesel and liquefied petroleum gas (for cooking) consumed in the state, a privileged situation,” said Alessandro Gardemann, president of the Brazilian Biogas Association (ABiogás).

“Cocal is a demonstration project, which goes from sugarcane cultivation to the final consumer with the supply of biomethane for the entire year,” he told IPS by telephone from Londrina, a city in the southern state of Paraná where his technology services company, Geo Biogas & Tech, which promoted biogas in the sugar-energy sector, is headquartered.

Solution for seasonal limitations

Geo’s technological contribution was decisive for the Cocal biomethane project to take off. It has long been known how to make biogas from vinasse, but this liquid residue from the ethanol (or alcohol) distillery can only be used during harvest season, generally from April to November.

The vinasse is bulky and smelly, impossible to store for many days in the ponds built to collect it before it is put into the horizontal biodigesters where the organic material is broken down in an anaerobic process that produces biogas.

To ensure a year-round supply, Geo adapted a German technology to incorporate into biodigestion another waste product, cachaça or filter cake, a dark sludge resulting from the processing of sugarcane juice to make sugar. Cachaça, for Brazilians, is the name for sugarcane brandy.

A treatment process that removes impurities and part of the moisture converts this waste, which used to be discarded, into raw material for biogas. It has “10 times more organic matter than vinasse,” which is why it is more productive, Eduardo Baptista, supervisor of industrial production at the Cocal biogas plant, told IPS.

A sea of sugarcane plantations flood Narandiba and its neighboring municipalities in the southern state of São Paulo, where the agroindustrial company Cocal grows it as the raw material for its biofactory for energy, fuels and agricultural inputs. CREDIT: Mario Osava/IPS

This innovation made it possible to overcome seasonality, as it is stored in four open-air tanks next to the two vertical biodigesters, specifically for the cachaça. “During the harvest, we use the vinasse and between harvests, the cachaça,” avoiding interruptions in the production of biomethane, explained Alves, the company’s commercial director.

A second factor in favor of the project, he said, was that there is local demand for gas that could not be met by the GasBrasiliano pipeline, whose nearest point is more than 100 km from Presidente Prudente, the main city in the region, with a population of 230,000.

Extending the existing network to this limited market would not be economically viable, but a 65-kilometer gas pipeline from Cocal is, said Gasparetto, GasBrasiliano’s director-president.

The third factor is environmental. With biomethane, Cocal seeks to reduce the greenhouse gases emitted in its ethanol production. Replacing diesel with green gas decarbonizes the activity by 95 percent. Additional reductions can be obtained with the new fuel in trucks and agricultural equipment, an alternative that is currently being tested.

In addition, the waste from which the biogas is extracted is converted into clean biofertilizers, which emit 75 percent less carbon than chemical fertilizers, said Cocal’s commercial director.

Lastly, the decision was also based on the dual use of biogas: electricity or biomethane.

“Having two options reduces the risks,” the proportions can be modified according to demand and prices, Alves said. Currently, 53 percent of the biogas is refined into biomethane and 47 percent is used for electricity generation.

The vinasse pond at the Cocal plant, in the Brazilian municipality of Narandiba, feeds the biodigesters that produce biogas, later purified and refined for use in electricity generation or conversion into biomethane, a renewable and clean fuel equivalent to natural gas. CREDIT: Mario Osava/IPS

Cocal has also been generating energy by burning bagasse since 2002. Today it can supply electricity to a city of 730,000 inhabitants, the company reports.

Social contributions

For all this energy production, Cocal has two industrial units, each with its own sugarcane fields around it. The first was installed in 1980 in Paraguaçu Paulista, 135 kilometers from Narandiba.

It employs a total of 5,500 workers in 22 municipalities and has 125,000 hectares planted to sugarcane, mostly on land leased under 20-year contracts, according to Alves. The harvest reached 8.7 million tons of cane last year.

Narandiba currently has about 6500 inhabitants, after 2000 arrived, attracted by the local operation of Cocal, inaugurated in 2008, said the town’s mayor, Itamar dos Santos Silva, who estimated at 600 the direct and indirect employees of the sugar and alcohol plant a year ago – almost 10 percent of the population.

The municipality, which had stagnated when cattle ranching dominated its economy in the last decades of the last century, has prospered again. “Sugarcane totally changed the social and economic situation in the region,” the mayor said in a meeting with IPS in his office.

Deposits of cachaça or filter cake, a residue from sugar production, proved advantageous in the generation of biogas at Cocal’s two plants in western São Paulo state, in southern Brazil. The reason is that the residue contains a lot of organic material and is available when there is a lack of vinasse between sugarcane harvests. CREDIT: Mario Osava/IPS

In addition to offering more jobs, Cocal pays even the lowest-earning employees double what a ranch worker used to earn, he said. With the rise in purchasing power, “every day a new house is built in Narandiba” and commerce and the demand for schools, health services and recreation has grown, Dos Santos Silva said.

Tax revenue also increased, but it lagged behind the immediate demands created by the influx of new residents, lamented the mayor, whose plans include attracting industry and stepping up the training of young people for the new supply of technical jobs in the sugarcane agro-industry.

Environmental sustainability was the main motive for Liane, a company that makes food products such as biscuits and pasta, to sign the first contract for the purchase of biomethane distributed by GasBrasiliano in Presidente Prudente.

Biomethane does not pollute like fossil fuels and probably has lower costs than “the natural gas that comes to us by truck from far away,” Mauricio Calvo, Liane’s industrial director, told IPS by telephone from the company’s headquarters.

Initially, biomethane will go to companies, fuel stations, shopping malls, hotels and large restaurants, i.e. large consumers.

The supply of piped gas to households remains a long-term goal, Gasparetto told IPS by telephone from GasBrasiliano’s headquarters in Araraquara, a town 280 kilometers from São Paulo.

The biofuel from this mini biogas power plant in the municipality of Entre Rios do Oeste, in the southern Brazilian state of Paraná, is supplied by local pig farmers, who earn extra income while the municipality saves on energy costs for its facilities and public lighting. CREDIT: Mario Osava/IPS

By Mario Osava
RIO DE JANEIRO, Nov 11 2021 (IPS)

The number of victims of serious burns, some fatal, has increased in Brazil. Without money to buy cooking gas, the price of which rose 30 percent this year, many poor families resort to ethanol and people are injured in household accidents.

A larger number of poor Brazilians have returned to using firewood, less explosive but also a cause of accidents and of health-damaging household pollution. It is cheaper in the countryside, while in the cities people burn boards and old furniture, not always as widely available as alcohol or ethanol, which can be purchased at any gas station.

In fact, biofuels, such as wood, ethanol, biodiesel and biogas, have been competing with fossil fuels since the industrial use of coal began in England in the 18th century. Economic and environmental factors influence private and public decision-making with regard to their production and use.

A commitment made by 103 countries at the 26th Conference of the Parties (COP26) on Climate Change, which is taking place in the Scottish city of Glasgow during the first 12 days of November, to reduce methane emissions from 2020 levels 30 percent by 2030, may now give biofuels a new boost.

Replacing oil, gas and coal with other sources will help contribute to that goal.

“In Brazil, the demand for ethanol was imposed for economic reasons: high oil prices; and energy reasons: the risk of shortages,” said Regis Leal, an aeronautical engineer and specialist in Technological Development at the state-owned National Laboratory of Biorenewables.

Ethanol in the seventies

Ethanol is a fuel produced from sugarcane, corn or any vegetable with a high sucrose content, which is mainly used in motor vehicles. Brazil is the world’s second largest producer of ethanol, after the United States.

The National Alcohol Programme (Proalcohol) was created in Brazil in 1975, two years after the first big oil crisis that more than tripled the price of a barrel of oil. Brazil, which at the time imported more than 80 percent of the crude oil it consumed, lost the momentum of an economy that had grown by more than 10 percent per year between 1968 and 1973.

With alcohol or ethanol replacing gasoline or mixed with it, the aim was to reduce dependence on imported oil, while intensifying the search for hydrocarbon deposits for self-sufficiency, which Brazil only achieved three decades later.

This sugar mill and ethanol distillery are in the southern Brazilian state of São Paulo, much of whose territory has been turned into one large sugarcane field. CREDIT: Mario Osava/IPS

In the United States, the use of ethanol began to be fomented in the 1980s, but for environmental reasons, Leal told IPS in an interview by telephone from Campinas, a city in the interior of the state of São Paulo, near the country’s largest sugar and ethanol-producing area.

In cities located at high altitudes, such as Denver, the capital of the western U.S. state of Colorado, at 1,600 metres above sea level, lower oxygen levels lead to incomplete combustion of petroleum derivatives and, consequently, greater carbon monoxide contamination and health damage, he explained.

Mixing in MTBE (methyl tert-butyl ether), a combination of chemicals, added oxygen, but because it was a highly toxic product it was soon replaced by ethanol, made from corn in the case of the U.S.

In both Brazil and the United States, biofuel production also bolstered or stabilised the price of sugar and corn by absorbing surplus production.

This is an aspect that is misunderstood by those who condemn biofuel production for apparently reducing food production. This is a false dilemma, because it must be analysed on a case-by-case basis, said Suani Coelho, coordinator of the Bioenergy Research Group (GBio) of the Energy and Environment Institute at the University of São Paulo.

“In Tanzania, a FAO (U.N. Food and Agriculture Organisation) study evaluated the production of ethanol from manioc. The hypothesis seemed doubtful, also because the energy balance of cassava is not so good. But in Tanzania there is a surplus of the crop that cannot be exported. So it is worth taking advantage of it to make ethanol,” said Coelho, a chemical engineer with a doctorate in energy.

In Brazil, where ethanol is made almost exclusively from the more locally productive sugarcane, corn was incorporated in the industry in 2017, with a distillery in Lucas do Rio Verde, in the state of Mato Grosso, the country’s largest producer of soybeans, corn and cotton.

Lucas do Rio Verde is in the state of Mato Grosso, the region of Brazil with the highest soybean and corn production, which is crowded with agribusiness warehouses and silos. The first corn ethanol distillery was set up there to take advantage of the surplus corn production. CREDIT: Mario Osava/IPS

“Corn is produced there as a second crop, after soybeans, in the same area, in a volume that is not viable for export. So it makes sense to use it for ethanol,” she told IPS by telephone from São Paulo.

Ethanol led to a great improvement in the urban environment.

In Brazil it has already replaced 46 percent of gasoline, according to the sugarcane industry association (Unica), with an annual production of 35 billion litres. It is used as fuel alone in motor vehicles or as a 27 percent blend in gasoline.

The United States produces 50 to 70 percent more than Brazil, depending on the year. Together, they account for about 84 percent of world production, a level of concentration that hinders free international trade in ethanol.

Biofuels or electrification

Coelho and Leal do not agree with the claim that the electrification of transportation tends to hinder the expansion of biofuels to other countries and major producers.

Developing countries do not have the capacity to make large investments to build new infrastructure, such as electric recharging points for vehicles. Moreover, “Brazil is going through a crisis, it is increasing fossil fuel thermoelectric generation, making the energy mix dirtier, and it has no other way to increase the supply of electricity,” argued Coelho.

Leal said the demand for ethanol can grow a great deal. “Any increase in its blend in the United States, which accounts for half of the world’s gasoline consumption, will have a huge impact,” he said.

The ethanol expert also questions the environmental and climatic advantages of electric vehicles, taking into consideration the entire production cycle, transportation, batteries, employment and other aspects.

View of a vast oil palm plantation in Tailandia, a municipality in the state of Pará, in Brazil’s eastern Amazon rainforest. The intent to turn palm oil into biodiesel did not work out, because the oil serves a more attractive market in the food and chemical industries. CREDIT: Mario Osava/IPS

Biodiesel was not as successful as ethanol, but it also improved the urban environment and has a future, with some additional effort.

It is produced from vegetable or animal oils, even used, and other fatty materials.

Its main problem is that it is more expensive and therefore cannot compete with diesel fuel in order to replace it, Leal pointed out. Currently the diesel blend has been reduced from 12 to 10 percent, so as not to further drive up the cost of diesel fuel, the price of which is rising worldwide.

Another biofuel, which has been around for a long time but is now expanding, is biogas.

It is not only clean, but actually helps to reduce pollution, since it is the gas generated from garbage, wastewater, agricultural waste and animal excrement, which is no longer released into the air, thus reducing greenhouse gases that cause global warming.

Its use is incipient in Brazil, but it has the potential to replace 70 percent of the diesel fuel consumed in the country, at a lower cost, according to the Brazilian Biogas Association. And big cities and the country’s enormous agricultural sector offer plenty of raw materials.

By means of a simple refining process, biogas is converted into biomethane, equivalent to natural gas and, therefore, a fuel that can even be used to run heavy vehicles. If used for electricity generation, it could meet 36 percent of national demand, the association of companies in the sector estimates.

Small biodigesters produce biogas that could prevent the use of firewood and ethanol, and the resultant accidents and pollution, among poor families, especially in the countryside, noted Coelho.

“Appropriate public policies and low-interest loans for investments” could boost biogas and its environmental benefits, at a time when international financial institutions are cutting financing for coal-fired and other fossil fuel power plants, Leal said.

The two experts stressed that all these biofuels play an important role in making green hydrogen, produced from renewable energy sources, viable and recognised as central to the world’s energy future.

Biofuels have served humanity since its earliest past, not always in a sustainable way. The first was firewood, on which 2.8 billion people in the world still depend, according to an October 2020 World Bank report. But it is environmentally unsound, and leads to deforestation and household pollution.

The oils and resins that illuminated cities and homes in centuries past, before the advent of electricity, were also destructive. Oils extracted from whale blubber and from the eggs of Amazonian turtles are examples, almost driving certain species to extinction.

Water hyacinth is a weed and if not controlled on Lake Victoria, experts are concerned that the lake’s water levels might drop by 60 percent. Courtesy: CC by 2.0/Madeira Botanic Garden

By Benson Rioba
KISUMU, Kenya, Dec 19 2018 (IPS)

Currently 30 square kilometres of Lake Victoria, which stretches to approximately 375 kilometres and links Tanzania, Kenya and Uganda, is covered with the evasive water hyacinth that has paralysed transport in the area.

But scientists are harvesting and fermenting the weed, and one intrepid chemistry teacher has built a business out of it.

The presence of water hyacinth on the lake is concerning. Late last year, Margaret Kidany, one of the people involved in conserving Lake Victoria’s beaches, said the lake’s water levels might drop by 60 percent if the weed is not controlled. If it is not eliminated, it will kill the livelihoods of thousands of households that rely on the lake for an income.

However, the Centre for Innovation Science and Technology in Africa, founded by former chemistry teacher Richard Arwa, is making the best out of the invasive water hyacinth.

Funded in its start-up stages by the World Wide Fund for Nature (WWF), the innovation company, which employs six people and serves 560 households, manufactures ethanol from the weed. This is proving a cheaper source of clean fuel for many of the locals while at the same time preserving the lake.

The process they use is a simple one.

The centre hires locals to harvest the hyacinth from Lake Victoria before transporting it to their workshop for processing. Once at the workshop, the hyacinth is pretreated to remove microorganisms that might compete with the enzymes during processing.

The hyacinth is then dried and chopped into smaller pieces to reduce the surface area for efficient processing. The dried hyacinth is then mixed with water, acids and enzymes in tight closed tanks for fermentation.

After fermentation the mixture is subjected to high temperatures (80 degrees Celsius), producing ethanol and carbon dioxide and methane as final products.

“This was part of a science congress project for secondary schools and it won accolades throughout the country and we, together with my students, decided to actualise the project,” says Arwa.

Arwa is still a chemistry teacher even though he started the institution in 2016.

He adds that they initially tried to produce beverage alcohol from the hyacinth but the project was not viable. According to Arwa, alcohol requires numerous purification processes to make it consumable. In addition the taxes on the product are high.

So it is less costly to make ethanol. Arwa says the company produces 100 litres daily.

The amount is considerable for their factory, and it is sold to 560 households in Yala in Kisumu city. Arwa tells IPS that they always run out of stock.

Lyne Ondula, a mother from Yala, in Kisumu county, is a happy customer.

“Hyacinth fuel burns slower than the usual kerosene I use and doesn’t produce smoke and soot while cooking like firewood or kerosene. To me it’s much cheaper and cleaner to use, no more coughing in my kitchen when preparing food,” she tells IPS.

Ondula says a litre of ethanol retails at 70 Kenyan shillings and lasts four days. That is in marked contrast to the higher cost of kerosene, which currently retails at a national average of 100 Kenyan shillings, and lasts only two days. She says she also used to buy charcoal which was quite expensive, retailing at 100 Kenyan shilling per a 15-kilogram tin, which only lasted hours. So now she only uses ethanol, which she pre-orders.

It is a cleaner option for this East African nation that is still heavily reliant on charcoal, kerosene and firewood as a source of energy. According to a market and policy analysis by the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, while “LPG has penetrated Nairobi and higher-income households; bio-ethanol can be an attractive clean fuel for lower income households.”

Ondula’s sentiments were echoed by Sylvester Oduor, another resident from Yala in Kisumu County. He adds that ethanol fuel also produces more heat compared to charcoal when cooking.

Philip Odhiambo, energy and climate change coordinator at the WWF, says such innovations are key in harnessing the untapped opportunities of water bodies.

“There is a need to turn environmental challenges to create wealth and opportunities especially in creating jobs for our many unemployed youth,” says Odhiambo. He adds that the ethanol processing project is a viable way of managing green waste that has been a challenge in the country for a long time.

Odhiambo adds that the world is shifting towards clean, cheap energy and says there is a need to embrace creativity and tap into the energy potential of water bodies, besides the traditional sources of energy.

In addition, unlike other clean fuels, bio-ethanol can be produced domestically over time and could spur industrial growth in the sector “while delivering positive social and economic benefits,” says the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety report.

However, Arwa says accessing the initial capital of 50,000 dollars was a challenge as many financial institutions turned him away for lack of collateral. In the end he had to rely on donors like WWF to finance the project. The chemistry teacher adds that financial institutions did not have faith in the venture and were not ready to invest in the idea.

The immediate goal for the company is to expand production to 600 litres per day.

But Arwa has a five-year expansion plan that includes moving the small factory, which is about 40 kilometres away from Lake Victoria, closer to the lake to reduce costs. He hopes that once relocated, and with the support of partners, they will eventually be able to produce 10,000- 25,000 litres per day.

Arwa adds that he is looking for strategic investment partners to help in scaling up the ethanol project, reiterating that there is a huge untapped market for the product. “I usually feel bad when customers come to purchase ethanol but we turn them away. At the moment we cannot satisfy the demand,” he says.

By Jomo Kwame Sundaram
ROME, Dec 17 2015 (IPS)

With the increased frequency and severity of extreme weather events adversely affecting agricultural outputs and farmers’ incomes, commercial crop insurance has been touted as the solution for vulnerable farmers all over the world. Financial and farm interests have been promoting US crop insurance as the solution. It is instructive to consider lessons from the 2012 drought.

Jomo Kwame Sundaram. Credit: FAO

Unexpectedly low crop yields caused by the drought in much of the US significantly drove up global cereal prices by mid-year. By July 2012, more than 55 per cent of the US was in a state of moderate to extreme drought – the worst since 1956. US maize yield fell far short of the 166 bushels per acre that the US Department of Agriculture had projected in the spring. The USDA rated only 31 per cent of the crops “good” or “excellent”, while 38 per cent were rated “poor” or “very poor.”

When bad weather destroys part or all of their crop, those with a harvest-price clause in their insurance policies are compensated for most of their expected crop at the market price. When farmers can earn more from insurance at higher prices, they have an incentive to behave in ways that may raise prices even more, e.g. by delivering less.
Insurance payments for lost yields are based on current market prices, not some pre-agreed prices. Given the structure of these payoffs, it is not surprising that 85 per cent of all planted US farmland was insured in 2012, up from 75 per cent a decade ago, and only 25 per cent in 1988. Hence, many US maize farmers had their highest incomes ever despite the harvest failure!

By reducing the harvest, the drought drove up prices, boosting farmers’ incomes from insurance payments. If farmers with good insurance coverage make claims instead of harvesting, even less maize gets to market, raising prices – and insurance payments – further. When farmers planted in the spring, the maize price was less than 5 dollars a bushel.

Indeed, with highly subsidized crop insurance, if prices rise high enough, American farmers can earn far more from a failed harvest, than from a successful harvest. As insurance paid 80 per cent of current harvest prices, many farmers made more from insurance when prices rose above 6.25 dollars, than with a full harvest.

The supply shortfall pushed up maize prices to more than 8 dollar per bushel. As more land had been planted than ever before, many had expected a bumper crop, aggravating the low yield’s impact on prices. As the US is, by far, the world’s largest maize producer, and maize is the most popular animal feed, the poor harvest raised other food prices as well.

Nevertheless, this is very big—and very good—business for the insurance companies. Every year between 2000 and 2010, US crop insurers collected more in premiums than they paid out. But insurance companies also have little incentive to deter excessive payouts as the US government covers roughly three-fifths of premiums and reimburses private crop-insurance companies for administrative and operating costs exceeding a fifth of total premiums. Thus, the larger the nominal losses to insurers, the greater the share of payouts the government covers.

In 1989-2009, crop insurance cost US taxpayers 68.7 billion dollars, rising from 2 billion dollars in 2002 to 9 billion dollars in 2011, with more frequent and devastating extreme weather events. In 2011, when drought hit Texas and the US Southwest, total indemnified agricultural losses amounted to 10.8 billion dollars. But, as the government subsidized both premiums and re-insurance, private insurers still made a profit of 1.7 billion dollars. With the greater severity of the 2012 drought, the payout was much larger.

The federal government subsidy to crop insurance has since increased with the latest US farm bill. Yet, US policymakers have no reason to change things. Farm incomes account for a relatively small share of the US economy. In the run-up to national elections, powerful farm lobbies regularly call for even more federal protection. With candidates from both major parties vying for farm votes, neither side will discuss the perverse effects of US crop insurance or even its effect on the fiscal deficit – much less its impact on food prices and the world’s poor.

Instead, crop insurance is still touted as the best means to reduce farmer vulnerability, or even to combat poverty in developing countries. In Europe, the crop insurance lobby is calling for a “level playing field” by emulating US arrangements — by raising the level of support from the current 20 per cent to the US’s 70 per cent!

As such generous underwriting is allowed under WTO rules, and most developing countries cannot afford to subsidize crop insurance to the same extent, their farmers will consequently be at a further disadvantage. In any case, most poor farmers in developing countries are unlikely to be able to afford even the subsidized premiums offered by commercial insurance.

The “success” and popularity of US crop insurance is clearly due to high levels of government subsidy, beyond the means of most developing country governments.

While the risk-sharing that crop insurance offers is undoubtedly attractive, commercial insurance companies would not participate if they were really sharing risk. Surely, there are better options for protecting farmers — in the US and elsewhere.

(End)

Excerpt:

Sugarcane harvesters have become a fixture in the Brazilian landscape. Credit: Mario Osava /IPS

By Mario Osava
RIO DE JANEIRO, Feb 15 2013 (IPS)

Following a promising start, Brazil’s dream of positioning ethanol in the global market on an equal standing with petroleum-based fuels is hindered by new and old challenges.

Brazil’s goal of expanding ethanol sales across the world will only be attained when there are “more countries in a position to buy and supply,” noted Eduardo Leão de Sousa, director of the Brazilian Sugarcane Industry Union (UNICA), an organisation that represents the country’s top sugar and ethanol producers.

Brazil and the United States produce close to 85 percent of the world’s ethanol, according to information from the International Energy Agency. Since it is produced almost exclusively for domestic consumption, international sales are still marginal.

De Sousa told IPS that the critical level of demand necessary to stimulate ethanol production is not something that emerges spontaneously and must be driven by public policies, such as regulations that require a certain volume of renewable fuel to be blended into petroleum-based transport fuels.

Growing demand is led by the United States, spurred by the Renewable Fuel Standard (RFS) programme that set increasing annual quotas for ethanol production through 2022, and the European Union (EU), which aims to bring the percentage of renewable fuels in transport vehicle engines up to 10 percent by 2020.

The RFS programme, created under the Energy Policy Act of 2005 and further expanded in 2007, with the aim of cutting greenhouse gas emissions and reducing U.S. dependence on foreign oil, established a limit of 56.78 billion litres for annual consumption of conventional ethanol fuels, which are those produced from food crops such as corn.

As U.S. consumption is nearing that limit, the bulk of the increase towards the 2022 target of 132.5 billion will have to come from cellulosic ethanol – a biofuel from wood, grasses or the inedible parts of plants, which is new and still too costly to produce- and from “advanced” biofuels.

“Advanced” or “second generation” biofuels are those produced by sustainable feedstock, which are defined by availability of the feedstock, greenhouse gas (GHG) emission levels and biodiversity and land use impact.

The United States Environmental Protection Agency designated sugarcane ethanol as an advanced biofuel because it lowers GHG emissions by more than 50 percent as compared to gasoline, taking into account the full lifecycle of production and consumption, including the use of land to grow the crop.

This development will boost demand for ethanol produced by Brazil and other sugarcane growing countries, bringing it up to 15.14 million litres by 2022.

As for the EU, based on a directive to promote the use of energy from renewable sources (Directive 2009/28/EC) that requires that 10 percent of the energy used in transport be sourced from renewable fuels by 2020, ethanol consumption for that year is projected at 15 to 16 billion litres, half of which could be supplied from outside the bloc, according to de Sousa.

EU and U.S. imports combined, then, will equal Brazil’s current domestic market, developed over the course of almost four decades, de Sousa estimated.

But that demand is not a sure thing. The EU’s executive body, the European Commission, is considering revising its transport fuel target to impose a limit on crop-based biofuels in an effort to prevent negative impacts on food supply, while in the United States the powerful oil and corn lobbies are pressuring against the RFS, the UNICA director said.

Out to conquer emerging markets

Another huge potential market is China, but only if it adopts an ambitious programme once “a supply of diverse and permanent sources is guaranteed,” de Sousa forecasted.

Many countries introduced the use of ethanol as a fuel additive in the 1990s. But there are numerous cases in which national programmes for the adoption of this biofuel were postponed or implemented on a trial basis. For example, after establishing a voluntary three percent biofuel blend in 2003, Japan is still reluctant to make it mandatory.

On the supply side, efforts are also “timid,” although sugarcane ethanol is being produced in other South American countries and in Central America and Africa, as well as in Southeast Asia, where UNICA sees “great potential.”

Mexico has extensive agricultural land but fragmented into tiny private plots that hinder large-scale production. Something similar occurs in India, which already has a large cane production to supply sugar for its 1.2 billion people, de Sousa said.

In Africa, the lack of infrastructure and labour trained for ethanol production are an obstacle to this activity. In Angola and Mozambique, where Brazilian companies are implementing sugar projects, landholding is also an issue, but for a different reason. As all land is state-owned, producers cannot purchase land and must depend on government concessions.

This eliminates land purchase costs but drives away investors who see property as a guarantee.

“The key is having clear rules and streamlining implementation,” said Felipe Cruz, investment director at Angola’s Capanda Agroindustrial Pole, an initiative of the Brazilian company Odebrecht, which is building the Angolan Bioenergy Company (Biocom) set to begin production this year.

“The focus is on sugar,” António Carlos de Carvalho, Biocom manager and financial director, said. Angola, which was self-sufficient in that food crop prior to independence in 1975, lost its entire sugarcane industry during its 27-year-long civil war. Now it is trying to rebuild it with projects across the country.

In addition to 260,000 tons of sugar, Biocom plans to produce 30 million litres of ethanol, which will be used to replace petroleum-based additives.

Blazing a winding trail

As a pioneer in the use of ethanol fuel and a major sugarcane producer, Brazil has developed technology and companies in the field that have made it possible for the country to pursue ethanol projects in every continent.

This strategy was launched as a response to rising international oil prices in the mid 1970s, when Brazil imported 80 percent of the fuel it consumed.

A decade later, almost all new vehicles manufactured in Brazil were running exclusively on ethanol, while the rest of the country’s vehicle fleet had switched to gasoline blended with an increasing percentage of biofuel. Today, vehicles run on a blend that ranges from 18 to 25 percent.

This initial success was followed by a crisis produced by a drop in oil prices. But in the 1990s, amid growing environmental concerns, Brazilian ethanol emerged as a effective way of reducing pollution.

Also at this time, the U.S. began producing and using flexible-fuel vehicles (or flex vehicles), which run on any blend of up to 85 percent ethanol. In Brazil, an improved version of flex vehicles with no limit to the percentage of ethanol triggered a new biofuel boom in 2003.

But without the expected climate agreements and with environmental concerns clouded by the more pressing economic crisis, global interest in ethanol has waned. Brazilian efforts to create an international market for this product, led by one of ethanol’s champions, former president Luiz Inácio Lula da Silva (2003-2011), are not yielding the expected results.

While the strong support from the U.S. -the world’s largest producer of ethanol since 2006-means that Brazil is no longer alone in its efforts, it has exacerbated critics who argue that diverting huge volumes of corn to ethanol production will raise food prices.

Another cause for concern is the potential development of electric and hydrogen vehicles.

De Sousa is confident that “cellulosic ethanol will alter this equation,” expanding biofuel production and increasing its sustainability, while all the other alternatives will only be competitive in the long term.

However, no alternative should be ruled out. “Every region will find the solution that is most suitable” for its conditions, he concluded.