Brazil's ethanol industry. Renewable energy represents 4. Brazil’s total annual energy supply. By comparison, renewable energy accounts for only seven percent of the U. S. The largest source of renewable energy in Brazil is ethanol, accounting for over one- third of Brazil’s renewable energy. In addition, 9. 0 percent of Brazil’s electricity comes from renewable sources, predominantly hydroelectricity. By comparison, only nine percent of the U. S. About half of our electricity is generated from coal. Due in part to its ethanol program, Brazil became net energy independent in 2. Although we need to remember that the U. S. Large oil imports and high oil prices were damaging Brazil’s economy. In 1. 97. 5 Brazil implemented the National Alcohol Program. Since the creation of the National Alcohol Programme (NAP). Faced with rapidly falling car sales the government issued new incentives to revive “popular. The Brazilian alcohol program: foundations, results. It contained four policies to stimulate ethanol production. It required Petrobras, its major oil company, to purchase a required amount of ethanol. It provided $4. 9 billion of low- interest loans to stimulate ethanol production. It provided subsides so that ethanol’s pump price was 4. It required that all fuels be blended with a minimum of 2. E2. 2). Although crude oil prices were low in the 1. Brazil kept its ethanol program alive and moving forward. In 2. 00. 0, Brazil deregulated the ethanol market and removed its subsidies. The ethanol mandate was maintained. Depending on market conditions, all fuels were required to be blended with 2. The current mandate is 2. June 1, 2. 00. 7. Brazil aggressively developed cars that operated only on 1. In 1. 97. 9 the Fiat 1. By 1. 98. 8 almost 9. Brazil were E1. 00 (alcohol only) cars. However, an ethanol shortage in early 1. E1. 00 cars. In 1. E1. 00. Flex- fuel vehicles were introduced in 2. These vehicles can run on 1. Today more than 7. Brazil are flex- fuel as shown in Figure 1. Cataloging-in-Publication data provided by the Inter-American Development Bank Felipe Herrera Library Larrea, Sylvia. Fiscal and economic incentives for sustainable biofuels development: Experiences in Brazil, the United.BRAZIL ALCOHOL NATIONAL PROGRAM M. February 1999 Direct Subsidies Financing for Alcohol Stocks by the Private Enterprise Current Taxation. The government launched the National Alcohol Program in. The government scaled back incentives in. This chapter focuses on the use of biomass as both a food and an energy source in the United States, Brazil, India, and Kenya. Biomass from forests and other sources is produced from incoming solar energy if. History of ethanol fuel in Brazil Mechanized harvesting of sugarcane. The National Alcohol Program -Pr. These incentives made ethanol production competitive. Consumers have 4. Flex fuel vehicles have electronic sensors that detect the fuel blend mix and automatically adjust the engine combustion. The production of E1. The remaining 2. 8 percent operate on the mandated E2. There are no light vehicles running on pure gasoline. Seventy percent is the generally accepted tipping point of whether consumers purchase ethanol or gasoline for their flexible fuel vehicles. In other words, if ethanol price is less than 7. Anything over 7. The need for the discount is due to ethanol lower energy level per gallon than gasoline. So Brazil’s flex fuel vehicle program means that consumers have discretion in the combination of gasoline and ethanol they purchase. In July of 2. 00. Sao Paulo to a high of 6. Porto Alegre. By contrast the ratio in Jan. Sao Paulo to 7. 3 percent in Porto Alegre. Because high ethanol blends have a low vapor pressure, starting in cold weather is a problem. This is one of the reasons why the U. S. So a small secondary pure gasoline tank is installed for starting in cold weather. An improved flex fuel motor installed in 2. Brazil has 3. 3,0. By comparison, the U. S. Federal taxes on gasoline are higher than ethanol. States provide similar incentives. To receive an operating license, all fueling stations must provide an ethanol or ethanol- blend pump. To provide perspective on Brazilian ethanol prices, during the first six months of 2. Brazil. By comparison, ethanol sold for $1. Most of this price increase was due to the exchange rate between the U. S. The real strengthened from 2. Ethanol Production and Usage. Brazilian sugarcane production reached 4. This represented 3. As shown in Figure 2, Brazilian ethanol production is expected to top 7 billion gallons in the 2. In ethanol production, the . This is called hydrous ethanol and contains about 9. As shown in Figure 2, the growth in Brazilian ethanol production has been in hydrous ethanol. Anhydrous ethanol is created by putting hydrous ethanol through a dehydration process after distillation to remove the remaining water. The dehydration process is costly and energy- consuming. Anhydrous ethanol is used in the U. S. During 2. 00. 8, hydrated ethanol has sold in Brazil for an average discount of about 1. Anhydrous ethanol is used in the more traditional cars that run on the mandated E2. As shown in Figure 3, the usage of ethanol has increased substantially in recent years. Strong demand for ethanol is due to mandated ethanol in gasoline, robust sales of flexible fuel vehicles (FFV) and a favorable ethanol/gasoline price ratio. Despite production growth in the industry, ethanol supply lags demand. An ethanol shortage occurred in 2. When trucks and other diesel vehicles are included, ethanol represents about 2. Ethanol represents 1. Brazil. Labor and Environment Impact. Traditionally sugarcane has been harvested by hand. The fields were usually burned to remove leaves and other debris and rid the fields of snakes, making it easier and safer for the workers to harvest the cane. Due to advancements in harvesting technology, concerns about worker exploitation and environmental concerns about burning the fields, mechanical harvesting is becoming more common, especially in southern Brazil. This is displacing many of the workers who are usually the poorest in Brazil. Although the work is hard and may be dangerous, it does provide employment for a segment of the population. The Brazilian Sugar Cane Industry Association believes that 5. No alternative employment opportunities appear to be available. From 1. 97. 5 to 2. Big city improvements in air quality in the 1. Conversely, the air quality degradation from a partial return to gasoline in the 1. References. Ethanol Demand Driving the Expansion of Brazil’s Sugar Industry. GAIN Report Number: BR7. USDA GAIN Report Number: BR8. USDAGreen Car Congress. Ethanol Fuel, Wikipedia. Ethanol Fuel in Brazil, Wikipedia * Reprinted with permission from the Ag Marketing Resource Center , retired extension value added agriculture specialist.
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