According to the latest statistics, there are 780 million light passenger vehicles circulating on the planet, and oil, the energy that drives this global transportation system, is under suspicion. The accusations are both strategic and environmental in nature. Oil is becoming increasingly more costly, scarcer, and is one of the major causes of global warming.
The developed world does not want to slow down and has found a green alternative to crude oil in ethanol. Brazil leads the way with success and economic viability in the use of biofuels for the transportation sector. Although Brazil’s climate conditions and resources cannot be recreated exactly in other countries, the case of ethanol provides a point of reference worldwide for economies that have added biofuels to their energy agendas.
In the ’30s, Brazil, with more sugar than the country could really use, made the decision to allocate part of its sugar production to making ethanol. However, this biofuel took its first big step forward following the “oil price shock” in the ’70s. The crisis doubled expenditure on oil imports and the government was compelled to consider alternative energy sources in order to lower its dependence and spending on fossil fuels. With this in mind, the government unveiled the National Alcohol Program (Pro-Álcool) in 1975 to step up the production of ethanol as a gasoline replacement.
Following a period of stagnation from the mid ’80s to the Asian Crisis, the ethanol industry recovered in 2001, showing growth rates similar to those of the ’70s. Fluctuations are fundamentally the result of the evolution of oil prices and political changes taking place in the international environment. Today, the ethanol industry is a key factor in this country’s development, energy policy and employment policy. Brazil is currently the world’s leading ethanol producer and exporter, and its industry generates between 3.5 and 4 million jobs and accounts for 3.5% to 4% of the nation’s GDP.
The policies and mechanisms drawn up by institutions at the first stage led to the success of biofuels in Brazil. Incentives aimed at sugar cane producers to turn out large quantities and allocate a portion of production to bioethanol generation; incentives for car builders to design automobiles running on biofuels; and, finally, incentives for consumers intended to promote the use of ethanol instead of gasoline. Altogether, this has spurred ethanol’s success today in Brazil through a market that has already been deregulated, and is the product of discovering the opportunities that unfolded within a context of the high cost of a barrel of oil and the widespread use of flexible fuel vehicles (FFV).
FFV vehicles, which in 2006 already accounted for 80% of Brazil’s new vehicles, are designed to use the consumer’s gasoline and ethanol blend of choice. This lowers risks associated with price fluctuations, and the end consumer needs only to choose the best combination of ethanol and gasoline for his or her wallet. Thus, if current rates hold, over 40% of Brazil’s motor vehicle fleet could be made up of flex-fuel vehicles by 2015.
The report titled “Sustainable Bioenergy: A Framework for Decision Makers”, published by the United Nations in 2007, asserts that biofuels are the only short-term alternative for substituting gasoline in the transportation sector. Given this data, the prospect for the future is that the international demand for Brazilian ethanol will rise as the result of heightened environmental awareness and tougher policies with respect to emissions. Countries like Japan, with a lack of potential for ethanol production, already view Brazil as their chief energy ally. Likewise, other countries, including India, China, the U.S. and part of Europe, may experience difficulties in producing enough ethanol to reach their environmental targets, and Brazil has the potential to become a significant strategic partner and renewable fuel power.
In 2005, world ethanol production totaled 9.66 million gallons, 45.2 percent of which was produced by Brazil and 44.5 percent by the United States. This is good news if we take into account the fact that a gasoline blend of 85 percent bioethanol (E85) can enable a 45 to 70 percent reduction in greenhouse gas emissions for each kilometer driven. The Intergovernmental Panel on Climate Change (IPCC) predicts that temperatures will rise by 1.4ºC to 5.8ºC by 2100, entailing catastrophic effects for the planet, if steps are not taken to lower greenhouse gas emissions.
The ethanol industry is backed by over 30 years of expertise and experience in Brazil and now spearheads the nation’s energy policy. For the time being, ethanol is the only clear alterative to oil, demonstrating that its benefits go beyond being a cleaner source of energy. Brazil has proven that investment in clean energies constitutes medium- and long-term economic profit. Brazil’s vision of an energy future based on biofuels has earned the country a privileged position in the energy share to become an essential component in future energy agreements undertaken as the product of what Brazil calls its “green solution” to global warming.
Not all countries have optimal conditions for generating surplus sugar cane, but they do enjoy other sources, whether it be the sun, waves, the sea or the wind, which can be employed to form their energy mix in accordance with new economic and environmental scenarios that arise. Most of the world’s nations have the right conditions to come up with their own “green solution”; what is needed is for institutions, like what took place in Brazil, to think medium- and long-term and invest in solving the problems of tomorrow which, furthermore, may act as catalysts of activity and economic development. Developing clean, renewable energies is a commitment of the first order to energy independence, employment and the environment.









