GATINE AU, Que. – Last week, Canada’s ethanol producers were celebrating the impending enactment Dec. 15 of federal regulations that will require an average five percent ethanol content in gasoline sold.
By Brazilian standards, that is small change.
Joel Velasco, chief North American representative for UNICA, the largest Brazilian sugarcane association, told the annual meeting of the Canadian Renewable Fuels Association Nov. 30 that ethanol use is widespread and growing in Brazil.
It is the second largest ethanol producer in the world next to the United States.
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Driving the increasing demand is the popularity of flex-fuel cars that can run on 100 percent ethanol, gasoline or other fuels, including electricity.
They were introduced in 2003 in response to consumer demands for choice and now account for 45 percent of the Brazilian fleet.
“By the end of the decade, I doubt you will see a non-flex-fuel car driving on the roads of Brazil,” Velasco said. “Right now, you cannot find pure gasoline at any filling station in Brazil.”
He said sugarcane also is the main basis for Brazil’s liquor industry.
“We have a saying that we drink the best and drive the rest.”
Although Brazilian companies began to blend sugar-based ethanol with gasoline in the 1930s, he said the industry started to take off in the 1970s and early 1980s.
In the beginning years, the federal government paid significant subsidies to support the industry.
Then in the late 1980s, a military dictatorship ended and a new constitution required the state to get out of controlling business, including the sugarcane industry. The result was a rapid growth of sugar production and an increase in ethanol production.
Velasco said ethanol prices now have fallen to one-third of their levels in the early 1980s.
“We needed subsidies in the 1980s but it has now become very competitive with other fuels.”
Velasco said it was a result of the constitutional change and growing realization that ethanol could compete with oil.
“By the late 1980s, subsidies were becoming redundant,” he said.
Brazil’s economy has benefited from having diversified energy sources, including conventional oil, ethanol and hydroelectric power.
