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Ethanol in Brazil

In Winning the Oil Endgame: Innovation for Profits, Jobs and Security, an analysis of solutions to petroleum dependence in the United States from an independent, transdisciplinary perspective, Lovins, et al. (2005) note that the nation of Brazil has fostered numerous incentives and benefits to ethanol fuel initiatives. The fuel scenario of Brazil should not be taken as some mere anomaly, simply because of the default dependence on oil among many nations around the world.

As the fifth largest country in the world in both geography and population, Brazil is one of the ten largest economies in the world, having evolved from being a ‘mere’ Portuguese colony to a technologically sophisticated and industrialized nation, as a direct result of privatization and free trade reforms in the late 20th century. (CIA, 2008; Virtual Brazil, 2007)

As such, the adoption of ethanol as a primary fuel source within the nation holds special significance to other nations such as the United States seeking to implement fuel policies and technologies intended to curtail dependence on environmentally damaging petroleum and foreign imports of increasingly expensive crude oil. Following the 1973 oil crisis, the Brazilian government began to promote ethanol fuel industries. They guaranteed purchases by the state-owned oil company Petrobras, fixed the price of hydrous ethanol to 59% of the government price for gasoline and they gave low-interest loans for agro-industrial ethanol firms.

The untaxed retail price of hydrous ethanol continues to be lower than that of gasoline and an approximate research budget of US$50 million has been allocated in Sao Paulo for developing improvements in sugarcane ethanol distillation. (Renewable Energy World, 2007) Dickerson (2005) notes that these developments were necessary to a country that was once entirely dependent on outside economies to fuel its automobiles, and that in the coming years, the country will be self-sufficient.

What helped expedite this transition was the Pro-Alcool or Programa Nacional do Alcool, a nation-wide government financed program to phase out all fossil fuel-based energy sources in automobiles and replace them with ethanol. The program made use of public subsidies and tax breaks to encourage increased sugar cane production and the construction of distilleries to convert them into ethanol. Automobile manufacturers were also encouraged to develop cars which ran on 100 percent alcohol.

Additionally, it financed a massive distribution network to get ethanol to fuel stations and kept them at enticingly low prices. By the mid-1980s, the program helped reduce the number of cars running on gasoline by 10 million and subsequently reducing Brazil’s dependence on imported oil. (Dickerson, 2005) Policy developments notwithstanding, certain technological and infrastructural considerations were key to the adoption of ethanol in Brazil: First, for adoption of ethanol as a fuel source to be possible, automobile technology – particularly engine design – had to be developed to operate on it.

Second, it was necessary to implement a means of producing the ethanol supply that would power such vehicles. When the government made it mandatory to blend gasoline with 20-25% ethanol content, this necessitated some minor adjustments to the existing gasoline motors. Most of these adjustments were meant to support the characteristics of ethanol such as compression ratio, corrosive properties, the use of colder and more heat resistant spark plugs and the inclusion of an auxiliary gasoline-based cold-start system to aid engine starting in lower temperatures.

In 1976, the government demonstrated such modified vehicles to Brazilians in the form of a modified Volkswagen Beetle, Dodge and Gurgel. By the 1980s, every foreign and domestic automobile manufacturer in Brazil was producing ethanol only cars, and nine out of every ten new cars sold in Brazil ran exclusively on ethanol. (Luhnow & Samor, 2006) It was not until 2003 that the local car manufacturers began to develop full flexible-fuel vehicles which can operate on any proportion of gasoline and ethanol.

Such cars included the Gol 1.6 Total Flex and the Chevrolet Corsa 1. 8 Flexpower. Such cars are primarily aided by a computer device which enables an automobile to adjust its engine configuration according to the mixture of ethanol and gasoline in the tank (Lemos, 2007; Associated Press, 2004; Luhnow & Samor, 2006) Production of ethanol in Brazil benefited not only from the economies of scale that resulted from the above mentioned policy initiatives but from the use of high-pressure boilers which allowed the simultaneous generation of electricity.

Additionally, because sugar cane is an abundant crop within in the agriculture of Brazil, it was possible to allocate 3 million hectares of land which would yield the feedstock necessary to produce 4. 2 billion gallons of ethanol annually. (Diaz, 2007) Luhnow & Samor (2006) note that improvements to the distillation of ethanol from sugar cane have also made ethanol more attractive to Brazilians over the years. Not only is the residual cane-waste used for heat and power the sugar and ethanol plants, but the industrial waste produced is used to fertilize sugar fields.

The result is that in the span of thirty years, Brazil has managed to triple the number of gallons of ethanol it can produce from each hectare of sugar cane. Isaias, et al. (2004) note that because fossil fuels are used in the production of ethanol, the consequent reduction of greenhouse gas emissions must be evaluated in relation to those produced by such processes (i. e. fertilizers, sulfuric acid, electricity) used to produce in the first place. As such, ethanol can only be considered a clean and renewable fuel alternative to the extent that the aforementioned production-related emissions do not eclipse the reduction in emissions.

However, they concluded that the production of anhydrous ethanol has an increased greenhouse gas savings of 43 percent when compared to hydrous ethanol. Furthermore, they posit that in a scenario in which Brazilian ethanol fuel consumption is around 12 million cubic meters per year with equal shares of anhydrous and hydrous ethanol, an estimated 7 million tons of carbon emissions would be saved per year. (Isaias, et. al, 2004) The re-engineering of agriculture and fuel industries to accommodate for the adoption of ethanol fuel has resulted in significant social impacts.

Although the ethanol industry has lead to the creation of hundreds of thousands of new jobs in rural areas, some of these jobs entail adverse working conditions such as long twelve hour shifts, exhausting temperatures for low pay, while residing in squalid rent houses at high prices. (La Rovere, 2006; World Bank, 2008; Phillips, 2007). Kenfield (2007) asserts that the Brazilian ethanol industry, by virtue of its very dependence on sugarcane merely intensifies many of the socio-economic dynamics of sugarcane production that have dated back to the colonial times.

Because of the increasing demands placed upon an industry dependent on slave labor, the individual sugar cutter is under greater pressure to cut more daily tons than ever. Grona Bilister (2006) noted that harvesting sugar cane is also seasonal work, and as leave many without work after harvesting. The work is also hazardous insofar as unburned cane hides snakes and other perils. Also, the explosion of demand has merely increased multinational agribusiness interest in the sugarcane industry which has resulted in a larger ownership concentration.

Multinational agribusiness corporations are buying out the smaller companies, seeing them as prime investments in a national industry with one of the lowest costs of production in the world. The conversion of vast swathes of land to areas allocated for sugarcane growth also creates a monoculture that not only damages the environment by initiating land use changes that threaten biodiversity, but create an economic dependence on the crop for work and income thereby impeding job diversity.


Lovins, A. , Datta, E. K. , Koomey, J. G. & Glasgow, N. J. (2005). Winning the Oil Endgame: Innovation for Profits, Jobs and Security. Colorado: Rocky Mountain Institute. Dickerson, M. (2005, June 17) Brazil’s ethanol effort helping lead to oil self-sufficiency. The Seattle Times. Brazil Invests $50M in Ethanol from Sugarcane Projects. (2007, August 7) Renewable Energy World. Retrieved online from: http://www. renewableenergyworld. com/rea/news/story? id=49561

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