Term Paper on "Brazil Biofuel"

Quoted Instructions for "Brazil Biofuel" Assignment:

Research Assignment:

Information on Brazil and their use of bio-fuels. (research is completed, just needs to be organized and written into a research paper)

1. the history; when, how, why Brazil made the decision

to try bio-fuels

2. History and policy of biodiesel in Brazil

3. the affects on culture and economy of Brazil

4. How/if they changed over from dependence on oil to

bio-fuels (has it been successful and if so how

successful)

5. effects to the environment (research not done)

6. Pro*****s of bio-fuels

7. Con*****s of bio-fuel (sugar and land consumption)

8. how this affects imports and exports of Brazil,

including oil imports

9. cost of oil vs cost of ethanol

10. sugar ethanol vs corn ethanol

11. who is investing in Brazil*****s biodiesel and sugar

fields

12. the automobile technology and how Brazil changed cars

from oil fuels to ethanol (bio-fuels)

13. what other countries (Sweden) have followed in

Brazils foot steps and how

14. what is the US response to Brazil*****s bio-fuels and how

does the US compare to bio-fuel consumption,

processing and sugar vs corn

Teacher comments:

Last Month National Geographic has an excellent segment about biofuels especially related to superiority of sugar (Brazil) over Corn (the USA). That would make a slick reference. Keep the context of International business in mind and discuss the business constraints that Brazil had leading up to their early entry into Bio fuels. Consider the business of "fuel" - a quick definition of "Cartel" would be nice. Also maybe discuss the automobile technology and how Brazil changed the car to match the fuel (rather than making the fuel to match the car). Finally, you could mention one more country (hint: Sweden) that took a similar route but in a different way. Great topic - go for it and have fun. My suggestions are just to keep the paper well rounded. I look forward to hearing the written proposal/paper outline

6 references

8 to 10 pages

A graphic or 2 would be nice

Paper must include:

Executive summary

All references cited in APA format

Reference page in APA format

Below is my research that needs to be organized into a research paper:

1. The history; when, how, why Brazil made the decision to

try bio-fuels

Brazil*****s bio-ethanol program goes back to the oil crisis in the 1970s, and has been the world*****s most advanced bio-fuels market for decades. There are currently nearly 300 sugar-ethanol mills in operation, with 60 or more under construction (Mae-Won Ho, 2006 December 26).

The use of ethanol to fuel automobiles was initiated in response to the oil shock of 1973, and as an alternative to oil to promote self-sufficiency. In 1975, for example, the government created the Brazilian National Alcohol Program to regulate the ethanol market and encourage the production and use of fuel ethanol. The program guaranteed that all gasoline sold in the country would be blended with 22% anhydrous ethanol and that the pump price would remain competitive with gasoline. Past sugarcane crop problems have slightly altered the percentage of ethanol in Brazilian gasoline, however, mandated levels have usually remained at around 20%. Then, on June 1, 2003, the Brazilian government raised the ethanol mix in gasoline from 20% to 25%. http://www.eia.doe.gov/emeu/cabs/brazenv.html

Currently, as mentioned above, about half of Brazil*****s sugarcane crop has gone into bio-ethanol production with the rest being refined into sugar. Motorists today can choose to fill up with 100 percent ethanol at half the price of gasoline at over 30 000 filling stations nationwide, or petrol blended with 20-25 percent ethanol. Ethanol accounts for 40 percent of all non-diesel consumption. And, in 2005, for example, Brazil produced 15.9 billion litres of bio-ethanol, more than one-third of the world*****s supply and second only to the United States. Brazil*****s bio-ethanol is the only large-scale bio-fuel program now able to expand without government subsidies. US***** bio-ethanol from corn, in contrast, is heavily subsidized (Mae-Won Ho, 2006 February 28).

To add to this, Brazil is set to double its bio-ethanol production in the next decade, the futures market rose by 62 percent in 2006, thanks to growing demand in the EU, US, China, Japan, India and elsewhere. It is also poised to vastly expand biodiesel production for export, using soya, palm oil and caster oil. Brazil is emerging as the biggest of The New Biofuel Republics (as cited in Mae-Won Ho, 2006 December 26) in the world, and getting bigger all the time (Mae-Won Ho, 2006 December 26)

Rising global demand for bio-fuels has provided an opportunity, not only to expand its sugarcane ethanol, but also to save its ailing soybean industry, by turning soybean oil into another bio-fuel, biodiesel. New plants are being constructed in Brazil every day, such as the new ethanol-biodiesel plant in Barra do Bugres, Mato Grosso, in the heart of Brazil*****s centre-west soybean belt, has been producing ethanol from surrounding sugarcane fields for more than 20 years, but Dedini, a leading provider of sugar-ethanol biodiesel and cogeneration plants in Brazil, constructed the integrated biodiesel plant on the site, after investing 27 million Reals (US$12.5 million). In addition, the Lula government recently passed legislation that will mandate a 2 percent blend of biodiesel from oilseed crops like soybean, sunflower or castor beans in all commercial sales of petroleum diesel by 2008 rising to 5 percent by 2013. A few hundred filling stations already offer blends. Brazil has about 10 biodiesel plants in operation and another 40 under construction (Mae-Won Ho, 2006 December 26)

Finally, in 2006, Brazil integrated bio-ethanol and biodiesel production. For example, in a press release in December 2006, it is reported that President Lula recently inaugurated Barralcool, the first integrated bio-fuels plant that will produce sugarcane-based ethanol and biodiesel from oilseeds (Mae-Won Ho, 2006 December 26).

2. History and policy of bio-diesel in Brazil

Soy, the main raw material for biodiesel in Brazil, due to its massive current production, "has already become one of the principal factors behind deforestation of the Amazon and the Cerrado, a biome of savannahs and scrub forests that covers the extensive central area of Brazil," said the expert (Osava, 2006).

In 2005, as part of its ongoing energy matrix diversification, Brazil has taken a further step in promoting its renewable sources policy. Almost thirty years after creating Proálcool (the National Alcohol Programme), the most important fossil fuel substitution initiative in the global automobile market, Brazil has now authorized the commercial use of a new fuel - biodiesel. This is a biodegradable product originating from sources such as vegetable oils, animal fats, industrial residues, and sewage. Under the PNPB (the National Biodiesel Production and Utilisation Programme), the Brazilian Government has created a production chain, defined credit lines, structured its technological base, and enacted a law regulating this sector. Over the next three years, Brazil will sanction the addition of 2% biodiesel to diesel oil, a mixture that will be compulsory from 2008 and which will increase to 5% in 2013" (Biodiesel in Brazil - Overview 2005).

See full overview at URL: http://www.oti.globalwatchonline.com/online_pdfs/36488X.pdf#search=%22government%20support%20for%20Biodiesel%20in%20Brazil%22

3. The affects on culture and economy of Brazil

Research suggests mixed reviews of the cultural and social implications of producing ethanol in Brazil, including:

*****¢ The replacement of food crops by sugarcane has increased food prices

*****¢ The sugarcane industry has created a large population of migrant workers causing crime

*****¢ Decreased biodiversity

*****¢ Decreased dependency on foreign oil

How this affects Brazil*****s economy, culture, and how it affects other countries.

There have been substantial affects on Brazils economy, culture and other countries. For example, with ethanol and biodiesel as a springboard, Brazil's President Luiz Inácio Lula da Silva aims to turn his country into an energy superpower -- in contrast to the 1970s when the Brazilian economy was *****hed by its dependence on oil imports and its dramatic price hikes. But environmentalists warn that although bio-fuels reduce emissions of greenhouse gases (which lead to global climate change), they could also trigger a massive expansion of the bio-fuel crops, pushing the agricultural frontier deeper into the forests, destroying habitat and biodiversity. Alone for three decades in widespread use of ethanol, or ethyl alcohol, to replace a portion of gasoline in vehicles, Brazil developed technologies and a sugarcane economy that ensure its absolute competitiveness in exports, still limited by protectionist barriers and an unstable international market (Osava, 2006).

According to the International Food & Agricultural Trade Policy Council (October 2006), in Brazil, *****the growth in world demand for ethanol will affect the environmental sustainability of sugar production*****¦. Because Brazil is one of the largest consumers and the largest exporter of ethanol, the expansion of sugarcane acreage will be mostly ethanol related. However, liberalization in the world sugar market will benefit Brazil in terms of its ability to export both sugar and ethanol, thereby also contributing to the increase in land devoted to sugarcane production. The resulting increase in sugarcane monoculture will have a net negative effect on soil quality and water use, perhaps more negative for water than soil, because sugarcane is a "thirsty" crop. Brazil*****s score on air quality is difficult to determine, since it will be negative due to associated burning of cane and processing activity, but will be positively affected, since ethanol replaces fuels that contribute more to air quality degradation and carbon emissions***** (International Food & Agricultural Trade Policy Council, 2006).

"On the plus side, the effects on biodiversity are anticipated to be minimal and increases in sugarcane planting will lead to some additional seasonal rural employment. However, Brazil*****s good environmental legislation, but pronounced lack of enforcement capability, combined with the likelihood that increased sugarcane acreage will be widely dispersed in non-traditional areas, leads to a negative score across most environmental categories. Removal of EU export subsidies will make Brazil*****s sugar sector more competitive, and therefore it will be able to export more sugar and derivative products. This will, in turn, adversely affect all environmental factors. The one exception is within the social sphere, where greater market access will create more rural employment. If and when cellulosic conversion technology becomes commercialized, Brazil will be able to also convert bagasse, the residue of sugarcane production, to ethanol and may be able to devote less land to sugarcane production" (International Food & Agricultural Trade Policy Council, 2006).

Brazilian ethanol producers are actively looking to expand exports to the United States, despite a 2.5 percent ad valorem plus a 54-cent-per-gallon tariff that the United States imposes on direct imports of the fuel. In order to skirt the tariff, Brazilian producers have purchased ethanol-processing facilities in El Salvador and Jamaica that have duty-free access to the United States through the Caribbean Basin Initiative. Investors in Guatemala, Panama and the Dominican Republic are also reported to be working with Brazilian partners to plan new ethanol distilleries (Constance, 2006).

According to Szwarc: *****The consolidation of bio-ethanol as an important source of energy is linked to the creation of about one million direct jobs and an extensive agribusiness supply chain that has been contributing to rural and industrial development. Also bio-ethanol has helped to improve air quality in urban areas due to its much lower pollution characteristics and it has been regarded as an important alternative to greenhouse effect mitigation. Actually under Brazilian typical production and demand conditions bio-ethanol avoids the emission of 2.6 tons of CO2 equivalent /m3 for the anhydrous grade while for the hydrous grade the value is 1.7 tons of CO2 equivalent /m3. Furthermore the energy balance of the bio-ethanol cycle is highly favorable resulting in a net output of 8.3 units of energy for each unit of energy input. Based on the successful experience of bio-ethanol Brazil is just starting a biodiesel program that aims basically to reduce imports of diesel oil, stimulate social development of poor rural areas, mainly in the Northeastern part of the country, and reduce emissions from diesel-powered vehicles. Starting in 2005 production and use of biodiesel will be encouraged by a comprehensive policy that is being finalized by the Federal government. Initial demand of Biodiesel is expected to reach 800 million liters/year and this volume is likely to be used primarily for diesel blends containing 2%biodiesel. It is worth of note that conversely to what happens elsewhere where vegetable oil is processed with methanol to produce methyl ester in Brazil the preferred route for biodiesel production will use bio-ethanol to produce ethyl ester. The environmental advantage is obvious considering that methanol is mainly produced from fossil feedstocks***** (Szwarc, n.d).

The trend in Brazil has far-reaching implications for environmental policy, trade and economic development in poor countries that may have a bright future producing crops that can be easily turned into fuels. Biofuels also could be alternatives for U.S. farmers facing cuts in large federal farm subsidies on traditional crops, according to some agricultural economists. Congress, the Bush administration and U.S. industry are aware of ethanol's potential. During Senate floor debate Thursday on major energy legislation, Sen. ***** Cantwell (D-Wash.) said Brazil's example showed that bio-fuels were one way to break the "addiction" to imported oil. Efforts to gain wide acceptance in the United States have faced political, economic, and technical obstacles not present in Brazil (Morgan, 2005).

From another source:

According to this source: "First, not all Brazilian ethanol sold in the United States is imported *****in spite***** of the tariff. The Caribbean Basin Initiative allows Caribbean and Central American countries to sell Brazilian ethanol to U.S. importers duty-free. The amount is capped at 7% of U.S. domestic consumption, with provisions allowing additional tariff-free imports for mostly Brazilian ethanol with specified percentages of Caribbean *****domestic content.***** Second, U.S. refiners might be importing very little Brazilian ethanol if Congress, in the 2005 Energy Policy Act, had not (a) mandated the sale of 7.5 billion gallons of ethanol by 2012, and (b) denied refiners liability protection from lawsuits over MTBE contamination of ground water*****“a policy that triggered a stampede to ethanol as a fuel additive. Third, the relative success of Brazil*****s ethanol industry depends on rather special conditions including an ideal climate for growing sugarcane, abundant cheap labor, and vast tracts of unused land with scant biodiversity (see p. 15 of Dennis Avery*****s paper and pp. 7-8 of Marcus Xavier*****s paper). Fourth, even in Brazil, it is unclear whether ethanol could compete successfully with gasoline without policy privileges. According to Brazilian economist Edward F. de Almeida, Brazil*****s national government taxes ethanol at $0.01 per liter and gasoline at $0.26 per liter. Value added taxes imposed at the state level further skew the market in favor of ethanol. In Sao Paulo, for example, the VAT for ethanol is 12% compared to 25% for gasoline. Overall, Brazilian ethanol enjoys a tax advantage over gasoline of $997 million per year" ( Biofuels can match oil production, Harvard researcher says).

4. How/if they changed over from dependence on oil to

bio-fuels (has it been successful and if so how

successful)

Brazil*****s bio-ethanol is often held up as a model of sustainable bio-fuel production, and this appears to have been confirmed by a report released in October 2006 by the International Energy Agency*****s Bio-energy Task 40, which an*****s the international bio-energy and bio-fuels trade [4, 5]. The report concluded that, in general the production of sugarcane-based ethanol as currently practiced in Brazil, is *****environmentally sustainable***** (Mae-Won Ho, 2006 December 26).

Thus, it is extremely successful, at least from the economic perspective. Currently, in fact, about half of Brazil*****s sugarcane crop has gone into bio-ethanol production with the rest being refined into sugar. Motorists today can choose to fill up with 100 percent ethanol at half the price of gasoline at over 30 000 filling stations nationwide, or petrol blended with 20-25 percent ethanol. Ethanol accounts for 40 percent of all non-diesel consumption. And, in 2005, for example, Brazil produced 15.9 billion litres of bio-ethanol, more than one-third of the world*****s supply and second only to the United States. Brazil*****s bio-ethanol is the only large-scale bio-fuel program now able to expand without government subsidies. US***** bio-ethanol from corn, in contrast, is heavily subsidized (Mae-Won Ho, 2006 February 28). To add to this, Brazil is set to double its bio-ethanol production in the next decade, the futures market rose by 62 percent in 2005, thanks to growing demand in the EU, US, China, Japan, India and elsewhere. It is also poised to vastly expand biodiesel production for export, using soya, palm oil and caster oil. Brazil is emerging as the biggest of The New Biofuel Republics (as cited in Mae-Won Ho, 2006 December 26) in the world, and getting bigger all the time.

5. Effects to the environment

6. Pro*****s of bio-fuels

There are many eco-benefits to replacing oil with bio-fuels like ethanol and biodiesel, including:

*****¢ Since such fuels are derived from agricultural crops, they are inherently renewable--and our own farmers typically produce them domestically, reducing our dependence on unstable foreign sources of oil.

*****¢ Second, ethanol and biodiesel emit less particulate pollution than traditional petroleum-based gasoline and diesel fuels. They also do not contribute to global warming, since they only emit back to the environment the carbon dioxide (CO2) that their source plants absorbed out of the atmosphere in the first place.

*****¢ Third, unlike other forms of renewable energy (like hydrogen, solar or wind), bio-fuels are easy for people and businesses to transition to without special apparatus or a change in vehicle or home heating infrastructure--you can just fill your existing car, truck or home oil tank with it (The Pros and Cons of Bio-fuels).

7. What are the cons of bio-fuels?

Despite the upsides, however, there is a downside to look at as well, which include:

*****¢ Those looking to replace gasoline with ethanol in their car, however, must have a *****flex-fuel***** model that can run on either fuel. Otherwise, most regular diesel engines can handle bio-diesel as readily as regular diesel.

*****¢ Second, a wholesale societal shift from gasoline to bio-fuels, given the number of gas-only cars already on the road and the lack of ethanol or bio-diesel pumps at existing filling stations, would take some time.

*****¢ Third, another major hurdle for widespread adoption of bio-fuels is the challenge of growing enough crops to meet demand, something skeptics say might well require converting just about all of the world*****s remaining forests and open spaces over to agricultural land.

*****¢ Fourth is the issue of whether producing them actually requires more energy than they can generate. After factoring in the energy needed to grow crops and then convert them into bio-fuels, Cornell University researcher ***** Pimental concludes that the numbers just don*****t add up. For example, his 2005 study found that producing ethanol from corn required 29 percent more energy than the end product itself is capable of generating. He found similarly troubling numbers in making biodiesel from soybeans. *****There is just no energy benefit to using plant biomass for liquid fuel,***** says Pimentel (The Pros and Cons of Bio-fuels).

From another source:

Until recently, according to Constance (2006), the immediate reason was the low price of petroleum. When oil sold for less than US$30 per barrel, cane growers in most countries could earn better returns from producing sugar than ethanol. (Even in Brazil, growers have traditionally switched between sugar and ethanol production depending on fluctuations in the price of each commodity). But the bigger reason is that an ethanol program like Brazil*****s requires a decades-long commitment by successive governments, elaborate system mandates, subsidies and incentives, and large expenditures in research and development. Constance (2006) also states: "Finally, in countries with limited extensions of arable land, a large-scale expansion of sugarcane cultivation will almost certainly come at the expense of existing food crops or, worse yet, native forests. New sugar cane plantations are thus likely to face opposition from agricultural interests or environmentalists" (Constance, 2006).

From another source:

According to Osava (2006), however, the sugarcane economy is not a good environmental model. In the southeastern state of Sao Paulo, which produces 70 percent of Brazil's alcohol, the companies generally do not obey the Forestry Code, which requires nature preservation of 20 percent of rural properties. Furthermore, the cane fields are burned to facilitate the harvest, which creates serious local air pollution, said Rodrigues in a Tierramérica interview. "It is worrisome that a new economic cycle based on bio-fuels would trigger the expansion of monoculture crops and, consequently, deforestation," says Délcio Rodrigues, an energy expert with Vitae Civilis, a Brazilian non-governmental organisation that is active in fighting climate change (Osava, 2006).

8. How this affects imports and exports of Brazil, including

oil imports?

From country studies, for example: *****The growth in world demand for ethanol will affect the environmental sustainability of sugar production in Brazil. Because Brazil is one of the largest consumers and the largest exporter of ethanol, the expansion of sugarcane acreage will be mostly ethanol related. However, liberalization in the world sugar market will benefit Brazil in terms of its ability to export both sugar and ethanol, thereby also contributing to the increase in land devoted to sugarcane production. The resulting increase in sugarcane monoculture will have a net negative effect on soil quality and water use, perhaps more negative for water than soil, because sugarcane is a "thirsty" crop. Brazil*****s score on air quality is difficult to determine, since it will be negative due to associated burning of cane and processing activity, but will be positively affected, since ethanol replaces fuels that contribute more to air quality degradation and carbon emissions***** (International Food & Agricultural Trade Policy Council).

"On the plus side, the effects on biodiversity are anticipated to be minimal and increases in sugarcane planting will lead to some additional seasonal rural employment. However, Brazil*****s good environmental legislation, but pronounced lack of enforcement capability, combined with the likelihood that increased sugarcane acreage will be widely dispersed in non-traditional areas, leads to a negative score across most environmental categories. Removal of EU export subsidies will make Brazil*****s sugar sector more competitive, and therefore it will be able to export more sugar and derivative products. This will, in turn, adversely affect all environmental factors. The one exception is within the social sphere, where greater market access will create more rural employment. If and when cellulosic conversion technology becomes commercialized, Brazil will be able to also convert bagasse, the residue of sugarcane production, to ethanol and may be able to devote less land to sugarcane production" (International Food & Agricultural Trade Policy Council).

According to Constance (2006) and others, Brazilian ethanol producers are actively looking to expand exports to the United States, despite a 2.5 percent ad valorem plus a 54-cent-per-gallon tariff that the United States imposes on direct imports of the fuel. In order to skirt the tariff, Brazilian producers have purchased ethanol-processing facilities in El Salvador and Jamaica that have duty-free access to the United States through the Caribbean Basin Initiative. Investors in Guatemala, Panama and the Dominican Republic are also reported to be working with Brazilian partners to plan new ethanol distilleries (Constance, 2006).

In other words, reports Constnace (2006), *****before ethanol can be traded as a large-volume commodity on the international market, even Brazil*****s mature ethanol industry will need to consolidate and invest heavily in transportation infrastructure and logistics. Both public and private entities in the country appear to be rising to this challenge. Brazil*****s ethanol producers association has announced plans to expand production with the goal of doubling exports by 2010, to around 5 billion liters per year. According to Garten Rothkopf, 89 new ethanol distilleries are either planned or under construction in Brazil, and the country*****s ethanol production capacity is growing at around 8 percent per year***** (Constance, 2006).

9. Cost of oil versus cost of ethanol

Motorists today can choose to fill up with 100 percent ethanol at half the price of gasoline at over 30 000 filling stations nationwide, or petrol blended with 20-25 percent ethanol. Ethanol accounts for 40 percent of all non-diesel consumption (http://www.eia.doe.gov/emeu/cabs/brazenv.html).

10. Sugar ethanol versus corn ethanol

South America's largest economy, Brazil launched an ethanol motor fuel program in 1975 and, against heavy odds, has developed a cost-efficient alternative to gasoline. In fact, Brazil's sugar industry, once viewed as a remnant of the country's colonial past, may now have a prominent place in the world's energy future. About half of the country's 21,000 square miles of sugar cane under cultivation is used to make ethanol that, according to the World Bank, is being produced at a cost of $1 per gallon compared to $1.50 for gasoline. Getting to that point required decades of steady pressure from Brazil's government, in ways that would be hard to duplicate in the United States, according to Deibert, 2006 (Deibert, 2006).

In fact, ethanol is currently the most available bio-fuel, and the U.S. and Brazil combined produce 70% of the world*****s ethanol. One difference between the two countries is that ethanol is made primarily from cornstarch in the U.S. and from sugar from sugarcane in Brazil. Both countries are also ramping up to begin producing ethanol from plant biomass, which can come from a variety of sources ranging from corn stover and sugarcane bagasse to wood and grasses (Ritter, 2007).

Motorists today can choose to fill up with 100 percent ethanol at half the price of gasoline at over 30 000 filling stations nationwide, or petrol blended with 20-25 percent ethanol. Ethanol accounts for 40 percent of all non-diesel consumption. And, in 2005, for example, Brazil produced 15.9 billion litres of bio-ethanol, more than one-third of the world*****s supply and second only to the United States. Brazil*****s bio-ethanol is the only large-scale bio-fuel program now able to expand without government subsidies. US***** bio-ethanol from corn, in contrast, is heavily subsidized (The Pros and Cons of Bio-fuels).

According to the Washington, "Most U.S.-produced ethanol is now made from ground corn in a process that has been faulted as inefficient. Corn yields less sugar per acre than sugar cane, and the refining uses substantial amounts of energy. To keep ethanol competitive with gasoline, major refiners such as Archer Daniels Midland Co. have relied since the 1970s on a tax subsidy, now 51 cents a gallon. U.S. refiners sell a gasoline blend containing 10 percent ethanol in many parts of the Midwest, but they have been in no hurry to use more. Only a few hundred gasoline stations, mostly in the Midwest, offer a near-pure blend known as E85. Adapting cars to pure ethanol can be done relatively inexpensively by adding a fuel sensor and corrosion-resistant hoses, but there are only about 4 million flexible-fuel cars on U.S. roads out of more than 200 million" (Morgan, 2005).

11. Who is investing in Brazil*****s bio-diesel and sugar fields?

Biodiesel and ethanol have captured the imaginations of soybean and corn farmers in the U.S. and soybean and sugarcane growers in Brazil*****”as well as lots of entrepreneurs*****”as a pathway to handsome financial gains (Ritter, 2007).

*****It*****s no secret that as fossil fuels are used up*****, reports Ritter (2007), *****we will have to replace them with something, both to drive our cars and to heat and power our homes and businesses. A lot of people started out thinking big about using hydrogen-powered fuel cells and solar-powered batteries. Solar technologies likely will win out in the distant future once they become more efficient and affordable, but to be practical, bio-fuels will have to serve in the interim***** (Ritter, 2007).

Also see http://www.biodiesel.gov.br/docs/cartilha_ingles.pdf#search=%22Brazilian%20National%20Alcohol.

12. The automobile technology and how Brazil changed cars

from oil fuels to ethanol (bio-fuels)

In July 2003, for example, *****Volkswagen announced plans to have its entire Brazilian fleet's engine converted from conventional to bi-fuel version by 2006. A bi-fuel engine can run on either gasoline or ethanol (Flexible Fuel Vehicles). Ethanol usually offers consumers a cheaper option to gasoline. In the past, Brazilians became wary of relying on ethanol due supply problems and cheap oil prices. The use of biomass fuel ethanol is an effective strategy to mitigate greenhouse gases, as it replaces oil, a more carbon-intensive fuel. While the manufacture of crop fertilizers and extraction and purification of ethanol can be highly energy intensive, this is not the case in Brazil, because much of the work is done by hand" (http://www.eia.doe.gov/emeu/cabs/brazenv.html).

13. What other countries (Sweden) have followed in Brazils

footsteps?

For its part, Brazil is quietly forging renewable fuels development agreements with a number of countries, most recently Chile, Jamaica, and Indonesia (Ritter, 2007).

The United States and China are working on a pact to promote use of ethanol and other bio-fuels to reduce greenhouse gas emissions and could announce an agreement as early as next month, an American official said Friday. The agreement would call for cooperation in research, producing crops for fuel and other areas, said ***** Karsner, an assistant U.S. energy secretary. He was in Beijing for talks with Chinese officials on promoting use of renewable energy sources. China already is the third-largest producer of bio-fuels after the United States and Brazil, which account for 80 percent of global production, according to Karsner (McDonald, 2007).

The Swedish oil company Statoil is currently selling E85 ethanol at 170 of their gas stations throughout Sweden, a number, which should increase to 260 by the end of 2007. Last year they sold 5.2 million gallons of E85, an increase of 270 percent compared to 2005. During the same time 36,711 flex-fuel cars were sold in Sweden, a jump of 156 percent from the previous year and 13.5 percent of all new car registrations. In 2005 only 5.2 percent of new car sales were flex-fuel capable. This growth probably hasn't been hurt by Saab's promotion of their BioPower flex-fuel models, and since Sweden doesn't have much if any domestic oil, they are also heavily promoting cellulosic ethanol development, to make them more energy self-sufficient (Abuelsamid, 2007).

Fueled by concerns over high oil prices and global warming, resource-poor Japan is revving up its drive to promote biofuels. Japan recently launched the first test sales of gasoline mixed with bioethanol in Osaka about six months after Japanese oil distributors began to sell another type of biofuel *****” gasoline blended with ethyl tertiary butyl ether (ETBE) *****” in the Tokyo metropolitan area on a trial basis. ETBE is a gasoline additive made by combining bioethanol *****” grain alcohol derived from such plants as sugar cane and corn *****“- with isobutylene, a petroleum product (Masaki, 2007).

Also see http://ap.google.com/article/ALeqM5j3wJcaZmHP9Pmi8YtNF_S_Mm3SoQD8SUOPIO0 and other resources in attached files.

14. What is the US response to Brazil*****s bio-fuels?

The governments of both the U.S. and Brazil view bio-fuels as a means for achieving *****energy independence***** and as yet another way to apply political leverage. For scientists, bio-fuels represent a new opportunity for international scientific collaborations (Ritter, 2007).

For example, the U.S. and Brazil announced plans to establish an energy partnership to encourage ethanol use throughout North and South America. Brazilian President Luiz Inácio Lula da Silva and U.S. President George W. Bush met twice, once in February in Brazil and again in March in the U.S. The two countries plan to sign agreements on technology sharing within the next year. For the U.S., the cooperation with Brazil is in part a political maneuver to frustrate President Hugo Chávez of oil-rich Venezuela, and by extension President Mahmoud Ahmadinejad of Iran, both of whom the Bush administration perceives as security threats. Chávez in particular has been using oil revenues to build influence in Latin America and the Caribbean (Ritter, 2007).

References

Abuelsamid S. (2007). Swedish biofuel sales grow 270% in 2006. Retrieved December 3, 2007, from http://www.autobloggreen.com/2007/01/21/swedish-biofuel-sales-grow-270-in-2006/

Biofuels can match oil production, Harvard researcher says (2007). Retrieved December 3, 2007, from http://www.factsaboutethanol.org/?p=294

Biodiesel in Brazil *****“ Overview (2005) . Retrieved December 3, 2007, from http://www.oti.globalwatchonline.com/online_pdfs/36488X.pdf#search=%22government%20support%20for%20Biodiesel%20in%20Brazil%22

Constance, P. (2006). The age of ethanol - Brazil has shown the world that bio-fuels can be used to reduce dependence on petroleum. But will other Latin American nations follow its lead? Latin Business Chronicle. Retrieved December 3, 2007, from

http://www.latinbusinesschronicle.com/app/article.aspx?id=427

Deibert, M. (2006 March 27). Brazil has head start on ethanol production. Por Energia Alternativa. Retrieved December 3, 2007, from http://www.midiaindependente.org/pt/blue/2006/03/349201.shtml

Mae-Won Ho (2006 February 28). Biofuels for Oil Addicts. ISIS Press Release. Retrieved December 3, 2007, from http://www.i-sis.org.uk/BFOA.php

Mae-Won Ho (2006 December 18). Biofuels Republic Brazil (2006 December 18). ISIS Press Release. Retrieved December 3, 2007, from http://www.i-sis.org.uk/BiofuelRepublicBrazil.php

Masaki, H. (2007 November 10) Roadblocks to Japan's biofuel drive. Retrieved December 3, 2007, from http://www.japantoday.com/jp/comment/1189

McDonald, I. (2007 November 16). US, China working on a bio-fuel pact. The Associated Press. Retrieved December 3, 2007, from http://ap.google.com/article/ALeqM5j3wJcaZmHP9Pmi8YtNF_S_Mm3SoQD8SUOPIO0

Morgan, D. (2005). Brazil bio-fuel strategy pays off as gas prices soar: Oil substitutes include sugar cane, corn, soybeans, beets, cornstalks. Washington Post. Retrieved December 3, 2007, from http://www.msnbc.msn.com/id/8262015/.

Osava, M. (2006). ENERGY-LATIN AMERICA: Bio-fuel Boom Sparks Environmental Fears. Retrieved December 3, 2007, from http://ipsnews.net/news.asp?idnews=34845

International Food & Agricultural Trade Policy Council (2006 October). Trade liberalization in sugar and oilseeds: How will it affect the environment? Retrieved December 3, 2007, from

http://www.agritrade.org/Publications/Sugar_exec_summary_web.pdf

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