Brazil stands out as a pioneer in the use of bioethanol as a road transport fuel: its experience of bioethanol-powered cars began before the Second World War. Indeed, an important ingredient in bioethanol production - sugar - has been the backbone of the Brazilian economy since the 1500s. Today, Brazil's huge supply of surplus sugar cane crops is the basis for its robust bioethanol industry.
Bioethanol production in Brazil received a major boost in the 1970s. As oil prices spiralled out of control, the government launched an ambitious programme named Pro-alcool to help reduce the country's dependence on oil. The focus of Pro-alcool was replacing petrol with bioethanol made from the country's natural abundance of sugar. The comprehensive programme included state support for distillery construction, tax incentives for bioethanol-powered cars, and a massive expansion of the ethanol fuel pump network. As a result, in the early 1980s when the rest of the world suffered under the highest real oil prices ever, almost all cars sold in Brazil ran on bioethanol.
However, as oil prices dropped in the 1980s and 1990s, the Brazilian government concentrated on other priorities, and support for bioethanol production decreased. Production volumes stagnated despite the fact that demand remained strong, and an acute supply crisis occurred in 1989.
Because bioethanol vehicles at that time were not flex-fuel cars and required pure bioethanol, Brazilian drivers could not find fuel. The shortage destroyed public confidence in the bioethanol programme, and sales of traditional petrol-powered cars soared as bioethanol-powered cars sales plummeted.
When high oil prices returned, however, the popularity of bioethanol in Brazil rebounded. This time, car manufacturers designed flex-fuel cars powered by any mixture of petrol and bioethanol, allowing the driver to choose whichever fuel was cheaper or more easily available. In the last few years, with Brazilian petrol prices double that of bioethanol, demand for flex-fuel cars has skyrocketed.
In 2006, the number of bioethanol-powered cars on Brazilian roads hit the 2 million mark, and flex-fuel cars accounted for more than three-quarters of the nation's new car sales. Many of the world's largest car producers now have a presence in the Brazilian flex-fuel car market, including General Motors, Ford, Peugeot, Volkswagen, Fiat and Renault.
The economic costs of bioethanol production have also decreased. In fact, Brazilian bioethanol production costs have dropped below petrol prices as growing and production technologies have improved. The 2006 wholesale price of Brazilian bioethanol (minus any government support or taxes) is comparable to or lower than that of standard petrol. Importantly, the environmental impact of bioethanol production is also taken into account: the vast majority of sugar plantations in Brazil are located near Sao Paulo, in the south of Brazil, thousands of miles away from the rainforest. Indeed, sugar cane grows best in dry, arid areas, so there is no risk of deforestation to make way for new sugar cane plantations as the bioethanol industry expands.
Brazil's bioethanol programme was sparked by economic emergency and nationalism, but as global warming and peak oil discussions have intensified during the last years, Brazil has become a leading figure in the global transition to renewable energy. Brazil is currently a world leader in production, consumption, and export of bioethanol, and its potential to expand bioethanol production is only growing.
Saab Biopower 2008