Ethanol in Brazil, the United States and Mauritius.

 

In response to the oil crisis and the erosion of trade preferences for sugar exports, Brazil’s military Government launched the world’s first large-scale ethanol programme in 1975, with producer subsidies and user incentives aimed at a rapid shift towards dedicated engines running on ethanol. In response to low gasoline prices in the mid-1980s, a national research programme was started which achieved a reduction in production costs from $35/ GJ (in 2004 United States dollars) to less than $10/GJ in 2009, mainly through higher yields. In Brazil, ethanol derived from sugar cane has a high energy return of 8.3 times the energy input (ranging from 3.7 to 10) and high yields of about 5,500 litres per hectare. In addition, the introduction of flexible fuel engines (developed with foreign automobile companies) allowed users to choose the desired mix of ethanol and gasoline, thus creating fuel competition and a hedge against lower future oil prices from 2003. The cumulative subsidy aimed at making up for the difference between the higher ethanol production cost and world oil prices between 1975 and 2004 amounted to an estimated $50 billion. Rising oil prices in recent years meant that ethanol production costs became cheaper than world oil prices after 2004. Flexible fuel engines have been highly successful, reaching 81 per cent of the light-vehicle registrations by 2008 (Brazil, Associação Nacional dos Fabricantes de Veículos Automotores, 2008). In this context, it should be noted that, in January 2009, gasoline prices were again lower than ethanol production costs owing to the global recession, but this had again been reversed by January 2011. In the United States, commercial production of fuel ethanol from corn had started in 1980, reaching 5 billion litres in 1995 and 35 billion litres in 2008. In 2007, the United States Congress passed a bill that mandated the production of 140 billion litres of corn ethanol by 2022, which would be equal to about 13 per cent of United States gasoline demand. If this goal were to be achieved domestically, it would require using the entire United States corn harvest. In recent years, many developing countries in tropical zones have tried to learn from Brazil’s experience with ethanol, and experimented with various local crops. An interesting case is that of Mauritius, which created a local sugar cane and biofuel research institute. While lower sugar cane yields and a smaller scale of operation led to ethanol prices that were about twice as high as those of Brazil, Mauritius has successfully deployed economical bagasse-based cogeneration. It should be noted, however, that, even if all tropical countries attained sugar cane yields as high as Brazil’s and all of the world’s sugar cane production (19 million hectares in 2005) were shifted to ethanol production, the resulting yield would meet only about 6 per cent of the world’s gasoline demand.