Archive for the ‘Brazil’ Category
The four years I was privileged to live in Brazil, from 2002 until 2006, were a pivotal time in the country’s success. The groundwork may have been laid by Pres. Fernando Henrique Cardoso in the 1990’s (I had the pleasure of meeting him when he came to speak at the school where I was teaching), but it was during Lula’s first term (2003-’07) that the country took off. While doing my PhD research on Brazilian sugarcane ethanol production (2006-2010) there was still abundant optimism both inside and outside Brazil for the country’s economic and political future.
While it has since plateaued, the article below provides a three-point recipe for its resurgence:
1. Reform the tax code and public spending. Make taxes less burdensome and more transparent, and direct public funds toward infrastructure instead of bloated entitlements.
2. Open the economy and integrate with the rest of the world.
3. Reform the political system to diminish corruption and pork barrel spending.
In my (admittedly limited) experience, these are bang on. A colleague and I earned roughly the same salary, but he paid 40% less in taxes than I did, and no one, including experienced Brazilian accountants, could explain why. The vestiges of import substitution policies from the 1980’s have continued to hold the country back. And the politics are so dirty that one prominent politician, Paulo Maluf, continues to serve in their congress even while he is wanted by Interpol. His name has been turned into a verb, malufar, which means to steal.
Brazil is a great country populated by wonderful people, and I am grateful to have lived and worked among them. Like many countries, including mine, it needs reform.
Has Brazil blown it?
A stagnant economy, a bloated state and mass protests mean Dilma Rousseff must change course
FOUR years ago this newspaper put on its cover a picture of the statue of Christ the Redeemer ascending like a rocket from Rio de Janeiro’s Corcovado mountain, under the rubric “Brazil takes off”. The economy, having stabilised under Fernando Henrique Cardoso in the mid-1990s, accelerated under Luiz Inácio Lula da Silva in the early 2000s. It barely stumbled after the Lehman collapse in 2008 and in 2010 grew by 7.5%, its strongest performance in a quarter-century. To add to the magic, Brazil was awarded both next year’s football World Cup and the summer 2016 Olympics. On the strength of all that, Lula persuaded voters in the same year to choose as president his technocratic protégée, Dilma Rousseff.
Read the entire article here.
Is this proposed legislation going to improve working conditions or environmental impact at sugarcane and ethanol production facilities, or is it just more paperwork? I’ve written extensively on this site and in my doctoral dissertation about these issues, as well as related policies, but it’s not clear the intent of the proposed legislation. Whatever it is, demand for imported ethanol has taken various swings over the last few years, not due to natural factors, but due to the EPA’s decisions.
When the US EPA allowed Brazilian sugarcane ethanol to meet the “advanced biofuels” requirement in 2010, it certified, according to their analysis, that cane ethanol reduces greenhouse gas (GHG) emissions by at least 50% (61%) over traditional, petroleum gasoline. This comes after much debate regarding the actual GHG emissions from sugarcane, corn, and cellulosic ethanol.
When the EPA made their decision on this debate, it significantly increased demand for Brazilian cane ethanol as US refiners worked to meet the advanced biofuel mandate. The EPA, however, lowered the volume on this mandate due to lagging development of domestic, cellulosic ethanol that would also satisfy the advanced mandate.
Now, according to the article below, that increased demand could be dampened, and the number of producers reduced to only the largest players, as meeting the new reporting requirements increases transactions costs. Policy fluctuations like these have made it very difficult for investors in Brazil since the prices they earn for their product are not subject to natural factors of supply and demand, but due to the whims of bureaucrats in Washington.
(Reuters) – Importing cheap Brazilian ethanol into the United States could become much less profitable next year if a proposal by the Environmental Protection Agency to expand tough documentation and transportation rules to non-U.S. producers takes effect.
The proposal, made on June 14, could seriously disrupt a signature Latin American energy trade, triggering auditing, documentation and transportation requirements, including physically separating U.S. ethanol imports from each other until those requirements are met.
Read the entire article here.
It’s true that ethanol mills have the potential to protect forests, particularly in the Amazon region where cane producers are required by law to leave 75-80% of each plot of land forested. The question is whether or not these laws will be observed and enforced.
The Brazilian Forest Code mandates that agricultural producers do not plant crops on 75% of their land, and also leave riparian corridors and other sensitive areas fallow. These laws have traditionally not been enforced, however, as they risk causing production costs to rise, making Brazilian agricultural products uncompetitive.
Yes, ethanol production in the Amazon can create jobs, protect forests, and reduce petroleum consumption, all while localizing energy production for people who would use the fuel there in the Amazon where the cane is grown and the ethanol is milled. It will take vigilance by Brazilian citizens and media to ensure these laws are followed if this expansion of cane and ethanol production is to occur.
Brazil Bill Seeks to Open Amazon to New Ethanol Mills
* Investors say ethanol production in Amazon economically viable
* Environmentalists fear pressure on land use
By Reese Ewing
SAO PAULO, June 4 (Reuters) – Brazil plans to vote on a bill in the coming weeks to reopen large areas of the Amazon to sugar cane mills, rekindling fears that ethanol production could accelerate deforestation and create a major marketing challenge for the country’s biofuels industry.
Environmentalists are concerned Congress’ vote could overturn a ban on cane expansion in the region that went into place in 2009 and increase pressure on land use in areas that amount to nearly a third of the broader Amazon region in Brazil.
Meanwhile, the expansion into the environmentally sensitive areas could hurt ethanol producers’ plans to open new export markets, economists say.
This has been a long time in coming, and is still a ways off, but is an important step towards renewable fuels from non-food feedstocks. Rather than use the sugar that has to date been the feedstock for ethanol production in Brazil, and is otherwise use as food, this process would separate the sugars in the bagasse, or the green leaves of the cane stalks, and ferment those for ethanol. Previously this bagasse was either burned in the field before manual harvest, or more recently harvested mechanically either to be left in the field to maintain soil structure or burned in the refinery to provide electricity.
The ethanol produced from cellulose in processes like this would be a tremendous leap forward in the production of renewable fuels.
Published 18 October 2012
Raízen Group, Iogen Energy to develop cellulosic ethanol facility in Brazil
Brazilian sugarcane ethanol producer Raízen and Canada-based cellulosic ethanol fuel manufacturer Iogen Energy will collaborate together to develop a commercial cellulosic ethanol project in Brazil.
The collaboration will be the first step towards commercialization of cellulosic ethanol biofuels in the country.
By Susanne Retka Schill | October 17, 2012
Engineering begins on Iogen-based cellulosic plant in Brazil
Ottawa-based Iogen Energy Corp. announced an initial investment by Raízen Group to develop a commercial cellulosic ethanol project in Brazil. Raízen, a joint venture between Royal Dutch Shell and Cosan SA is the world’s largest producer of sugarcane ethanol. Iogen Energy, a joint venture with Shell and Iogen Corp., operates a demonstration facility in Ottawa where it has produced over 2 million liters (560,000 gallons) of cellulosic ethanol as it refined its process since 2004.
With the US ending both the tariff on imported ethanol and the tax credit for domestic blenders, cooperation between the US and Brazil on biofuel technology is increasing, as well as efforts to trade renewable fuels on global markets. (See my post at the end of last year)
Yes, we need to be ever vigilant on the possible effects of increased biofuel production on food availability and prices as well as on land use, soil and water quality, and related issues. In my doctoral dissertation, however, I examined these issues in depth and contend that increased production can occur along with protection of ecological health.
The cooperation discussed in the article below can lead to greater efficiency of renewable fuel production, using less land and less water to produce more fuel.
Energy is fundamental to economic growth, and as countries in Latin America and Africa increase their ability to produce renewable energy domestically, they create more jobs and better the lives of their people in ways that will improve economic as well as environmental conditions for generations. These are undoubtedly positive.
It is a fascinating time to be alive.
Insight: U.S. and Brazil – At last, friends on ethanol
By Brian Winter
BRASILIA | Fri Sep 14, 2012 11:21pm IST
(Reuters) – After years at each other’s throats, Brazil and the United States are working together to promote the use of ethanol in a collaboration that could revolutionize global markets and the makeup of the biofuel itself.
The breakthrough came in January when Washington allowed a three-decade-old subsidy for U.S. ethanol producers to expire and ended a steep tariff on foreign biofuels. The tariff, in particular, had poisoned diplomatic relations between the world’s top two ethanol-producing countries for years.
With surprisingly little fanfare, the US has ended the $0.54 per gallon tariff on imported ethanol. This comes at the same time that Congress also allowed the $0.45 per gallon of ethanol tax credit for blenders to expire, potentially opening the door to much more US importation of Brazilian ethanol, as well as cooperation between the two countries on more advanced biofuels. Brazil was the leading producer of renewable fuel until 2005 when US production of ethanol from corn surpassed production of Brazil’s sugarcane ethanol.
The article below is clearly biased, quoting two top officials from UNICA, Brazil’s powerful sugarcane industry association, without presenting views from American officials who have been opposing these measures as they work to protect domestic energy production and agricultural markets.
That said, decreasing government intervention has always been favored by this humble author, and the elimination of these barriers to trade should make for the more efficient functioning of energy and agricultural markets.
Cooperation between the two largest producers of renewable fuels could also lead to faster development of fuels from non-food crop residues such as corn stover, sugarcane bagasse, and other cellulosic feedstocks.
Congressional Recess Means the End of Three Decades of US Tariffs on Imported Ethanol
Time for the world’s top two ethanol producers, the United States and Brazil, to lead a global effort for increased production and free, unobstructed trade for biofuels, says Brazilian Sugarcane Industry Association.
SAO PAULO, Dec. 23, 2011 /PRNewswire/ — For the first time in more than three decades of generous US government subsidies for the domestic ethanol industry, coupled with a steep tariff on imports, the United States market will be open to imported ethanol as of January 1st, 2012, without protectionist measures. The adjournment of the 112th Congress means both the US$0,54 per gallon tax on imported ethanol and a corresponding tax credit of US$0,45 per gallon for blenders, the VEETC (Volumetric Ethanol Excise Tax Credit), will expire as expected on December 31st.
July 10, 2011 4:37 pm
Shell to focus on exporting ethanol to US
Royal Dutch Shell is gearing up to become the biggest exporter of ethanol to the US, investing heavily in its joint venture in Brazil as global oil companies battle for control of the Latin American country’s sugarcane fields.
Under pressure to reduce the US deficit, lawmakers in Washington are preparing to scrap ethanol subsidies and tariffs – a move that would open up the country to cheaper imports while putting the spotlight on Brazil as the world’s only other leading producer of the biofuel.
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“The tariffs will be lifted; it’s just a question of when. That’s why we need to increase production of ethanol quickly,” Vasco Dias, Raízen’s chief executive said in an interview with the Financial Times.
“Our main priority now is to supply the internal market but our ambition is to become a big exporter of ethanol to the US when the time comes, and also to Europe.”
Read the entire article here.
After a first visit to Brazil earlier in the 20th Century, a foreign diplomat boldly stated that “Brazil is the country of the future!” Self-deprecating Brazilians quickly added, “And it always will be.”
Based on my four years of living in Brazil and many return visits in the four years since, I don’t think Brazilians are saying this any longer, nor are the popular media or President Obama.
It has been fascinating to watch the changes in Brazil since my first arrival shortly before Lula’s election in 2002. I feel very fortunate to have earned the job that first brought me there, and to have stayed in close contact with the amazing colleagues and friends with whom I worked and laughed during the past decade.
Mr. Obama, Meet the New Brazil
By JULIA SWEIG and MATIAS SPEKTOR
Published: March 18, 2011
When Barack Obama lands in Brazil this weekend, he will find a country transformed. In little more than a decade, some 30 million people have been lifted out of poverty and the country has risen to seventh place in the world economy.
Change at home has revolutionized policies abroad. Brazil has woken up to the 10 states along its borders, becoming the eminent power and driver of regional integration in South America. It has set out to develop closer ties simultaneously with Israel, Syria and Iran.
With most of the Amazon within its borders, the world’s 10th largest oil stores, and nearly a fifth of the world’s fresh water, Brazil is an environmental power, an energy power, and guarantor of global food security.
Read the entire article here.
There is definitely substantial agricultural land for much more fuel, fiber, and food production in Brazil, as well as preservation of forests and even reforestation, but the headline seems quite an overstatement of the facts.
My PhD research has investigated the potential for Brazil to supply enough ethanol for the U.S. Renewable Fuel Standards, which may have renewables accounting for as much as 20% of our transportation fuels in 2022. There does appear to be sufficient arable land for both Brazilian demand as well as to supply the U.S. for these renewable mandates signed into law by George Bush in 2007.
To say there is enough land to replace all petroleum globally, however, especially considering the booming demand in China and India as their economies expand and have more people driving cars, is a stretch, to say the least.
Between the typos, the outdated photo, and the lack of background research for the article below, I’m wondering where to send my resume for a job at the Telegraph.
Brazilian ethanol is the best hope for replacing oil, says BP’s Bob Dudley
Ethanol derived from Brazilian sugar-cane offers the best hope of replacing oil as the world’s main source of fuel when it runs out, according to Bob Dudley, BP’s chief executive.
By Robin Yapp, in Sao Paulo 7:03PM GMT 13 Feb 2011
He said Brazilian ethanol is the “best type of renewable energy” and offers the possibility of an “ultrapotent fuel that could revolutionise the market”.
“The alcohol extracted from sugar cane is cheaper, less polluting and more efficient than that from corn, for example, produced in the US.
BP is channelling its research into renewable fuels accordingly, with 40pc of its $1bn (£625m) annual spend in this area targeted at Brazilian ethanol, Mr Dudley told the weekly Brazilian news magazine Veja.
“There will obviously a time when the oil runs out and with this prospect on the horizon, we will use more renewable energy sources,” he said.
Read the entire article here.
First Shell suspends all of its renewable energy efforts except for Brazilian ethanol, and then BP’s chief comes out and says that Brazilian ethanol is the best bet to replace petroleum.
Maybe I’ve missed it, but I haven’t heard anything like this of corn ethanol. Funny.
Cosan, Shell give details on ethanol joint venture
Feb 15, 2011 2:31 AM MT
AMSTERDAM (AP) — Brazilian oil company Cosan SA and Europe’s Royal Dutch Shell PLC say their new ethanol joint venture will have an estimated market value of $12 billion, ranking as Brazil’s 5th-largest company by sales, with 40,000 employees.
When the deal was announced in August, Shell had dropped all other investments in renewable energy to focus on ethanol.
Read the entire article here.