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Bioethanol in Brazil: Can It Be a Promising Alternative Energy for the Country?

by Jisu Bang Americas Jul 19th 20216 mins
Bioethanol in Brazil: Can It Be a Promising Alternative Energy for the Country?

The search for alternative sources of energy that are renewable and could possibly reduce greenhouse gas emissions has been carried out for decades. Among various cases, the utilisation of bioethanol in Brazil, the largest producer of the biofuel, has gained the attention of those interested in climate change. The Brazilian production and consumption of ethanol, a renewable source of energy that generates less carbon footprint in relation to fossil fuels, suggest the potential role of the biofuel in stabilising the global temperature. Could ethanol be the promising alternative for conservation and a greener future?

Ethanol is produced by the extraction and crystallisation of sugars from agricultural products. Sugarcane has been the primary feedstock of Brazilian ethanol for over 35 years. Most of the biofuel in Brazil is then blended into gasoline, a dominant energy source for transportation, and the process eventually reduces the rate of petroleum consumption. As the production and combustion of ethanol reduce GHG emissions by 12% compared to fossil fuels, the Brazilian utilisation of the biofuel has become a noteworthy topic for the discussion on conservation and climate change. 

History of Bioethanol Production in Brazil

Historically, Brazil has been the largest producer and exporter of sugar. The export volume of sugar reached 32.15 million metric tons in 2020/2021, while the export volume of Thailand, the second-largest exporter, reached only 7.3 million.

Although Brazil fully began its venture on bioethanol production in the 1970s, an initial attempt began in 1933 when the government established the IAA (Instituto do Açúcar e do Álcool, meaning The Institute of Sugar and Alcohol) to revitalise the sugarcane industry that was facing overproduction. Among various measures taken to solve the problem, the IAA provided “incentives to promote the production of fuel ethanol,” which marked the preliminary stage of bioethanol production in Brazil.

The First Oil Crisis of 1973, caused by the OAPEC (Organization of Arab Petroleum Exporting Countries) as a response to the Western involvement in the Yom Kippur War, resulted an enormous shock in the global oil prices. Following the event, in 1975, Brazil introduced the Proálcool plan (The National Alcohol Program), which aimed to reduce Brazil’s dependence on foreign fossil fuel by diluting gasoline with its ethanol. The policy included active measures, such as increasing the minimum levels of the biofuel in ethanol-gasoline blend up to 25%, setting lower consumer prices for fuel ethanol, and reducing taxes on flex-fuel vehicles.

Brazil’s commitment to producing bioethanol, including its consistent pursuit of the Proálcool plan, proved its significance during the Second Oil Crisis in 1979. The hyperinflation of global oil prices came as a strong incentive to expand the production of ethanol. Hence, the government decided to invest USD$5 billion in expanding the land for sugarcane cultivation and the capacity of ethanol plants, developing the technology needed for ethanol production, and organising the tanking system. As a result, the production rate exceeded the intended goal by 8% in 1985, reflecting how Brazil overcame the crisis and instead used the catastrophic event as an opportunity to gain independence from imported oil.

Despite its success in stabilising the ethanol industry in the 1970s and the early 1980s, Brazil did face crucial setbacks during the 1990s, significantly due to the striking decreases in oil prices. The government could not afford to provide the same subsidies for fuel ethanol and flex-fuel cars since the biofuel was no longer competitive with petroleum, and consequently, less than 5% of new cars ran on ethanol by 1995. However, instead of ceasing the industries, Brazil chose to improve production efficiency by additionally cutting the costs of ethanol, taking an enormous risk. Fortunately for Brazil, oil prices began to increase as we entered the new millennium, proving once again the importance of Brazil’s ethanol industry.

Additional Benefits of Using Ethanol Fuel

The example of Brazil suggests additional benefits of utilising bioethanol other than reducing GHG emissions. First, bioethanol is produced through the cultivation of plants, and possible sources of production include sugarcane, corn grain and soybeans. The renewable aspect of ethanol provides a solution to energy depletion since the feedstocks are sustainable resources. 

Second, the agricultural origins of bioethanol would allow countries that rely on imported fossil fuels to be less dependent on them. For instance, South Korea does not have its own oil reserves while transportations takes up more than 20% of the country’s total energy consumption, making them heavily rely foreign petroleum. Consequently, the Korean Ministry of Trade, Industry and Energy has promoted the utilisation of ethanol and has been testing the practicality of the biofuel since 2006. The development of ethanol industries would allow countries like South Korea to stabilise their energy production and storage systems, just as Brazil did in the 1970s. 

Finally, ethanol production creates job opportunities. As the sugarcane processing in Brazil has shown, it involves various steps, including cultivation of feedstock, extraction and crystallisation of sugars in mills, and fermentation and distillation in ethanol plants. In terms of the United States, according to the RFA (Renewable Fuels Association), the production of 15.8 billion gallons of ethanol and 39.6 million metric tons of co-products and distillers oil in 2019 necessitated more than 68 000 direct jobs and 280 000 indirect and induced jobs.

You might also like: Could Biofuels Do More Harm Than Good?

International Approaches to Ethanol Production

There are countries that promote the production and utilisation of bioethanol besides Brazil. According to the EIA (Energy Information Administration), the United States produces 1.1 million barrels of fuel ethanol per day, using corn as the main feedstock due to its abundance and low price.

China is the third-largest producer of ethanol. Like the United States, China uses corn as the primary feedstock, which accounts for more than 70% of China’s fuel ethanol production. In 2017, China announced the mandatory use of E10 fuel (gasoline with 10% ethanol-mix) from 2020, but the plan was suspended in 2020 due to a major shortage of production capacity. Still, China’s ethanol consumption is expected to continuously grow to fulfil the government’s goal of reducing air pollution through lost-cost ways. 

Sweden, with its aim of generating zero net GHG emissions by 2050, has been committed to producing biofuels, including ethanol, since the 1990s. Ethanol represents 34% of Sweden’s biofuel, and almost all petrol includes an ethanol content of 5%. Lantmännen Energi AB, a Swedish agricultural cooperative, uses waste and bio-based materials to produce a biofuel called “Agro Cleanpower ED95”, which consists of 95% ethanol and reduces CO2 emissions by 90% in relation to ordinary gasoline. 

Concerns About Ethanol Production and Consumption

A major opposing point to bioethanol is energy efficiency relative to petroleum. A gallon of fuel ethanol produces less energy than a gallon of gasoline, causing a lower fuel economy. The U.S. Department of Energy explained that E85 (a blend of 85% ethanol and 15% gasoline) has about 27% less energy per gallon than pure gasoline. Moreover, to optimise the fuel economy of ethanol, vehicles would have to be modified to run on higher ethanol blends, requiring considerable amounts of time and costs.

Some have suggested the impact of ethanol on food security and agricultural commodity prices, as the production of the biofuel would increase the demand for feedstocks, ultimately raising their prices. A 2009 study on ethanol and food prices indicated that biofuel policies have “put upward pressure on prices for corn and other food commodities” in Brazil, the US, and member countries of the European Union.

Lastly, a case study on the impacts of ethanol production in São Paulo State, Brazil, suggests that a transport policy promoting ethanol over gasoline would result in more particulate air pollution and higher levels of tropospheric ozone in São Paulo State. Similarly, Mark Z. Jacobson proposes that “using E85 will cause at least as much health damage as gasoline” despite its significance in reducing CO2 emissions.

Although Brazil did not aim to reduce GHG emissions when it first promoted ethanol production in the 1930s and even in the 1970s, the country now became the leading nation in producing the biofuel. The utilisation of the resource allowed Brazil to achieve energy independence and economic stability, encouraging others to join in producing the renewable resource. The recent trends in climate change invite us to examine and evaluate the potential of bioethanol, including its possible risks that should constantly be monitored and minimised.

Featured image by: Pixabay

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