Jason Barton

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Archive for the ‘Brazilian Sugarcane Ethanol’ tag

Brazil may lose ethanol export dominance to US

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This is something that few of us could have expected just a few years ago. Brazil has always been considered far less expensive than U.S. corn ethanol, though a recent study I helped to perform (soon to be published) found that this depends on exchange rates and the prices of corn and sugarcane (or ATR, as the pricing system here works). A strong Brazilian Real and a weak American dollar, combined with high sugar prices (India’s falling exports have aided this) and low corn prices have come together to change the situation.

The major players in Brazilian ethanol were anticipating substantial growth in their market with increasing interest in importation by the U.S., the Netherlands, and possibly others. Now they seem to be waiting, wisely, to see what happens before increasing investments into the cane-energy sector.

With the U.S. Renewable Fuel Standards and our mandates to use increasing amounts of renewable fuels, mainly ethanol, up to 36B gallons in 2022, it’s hard to see how the U.S. will be able to meet these standards domestically. There is a cap at 15B gallons of corn ethanol starting in 2015, with the increases after that, and much fo the increases before, coming from cellulosic ethanol and other technologies which are not yet developed to be economically or energetically efficient.

Hopes are high that these technologies will be available shortly, but how quickly they can be scaled up to meet demand remains in question.

All of this leads me to believe that, for better or for worse, the Brazilian ethanol industry will continue to grow, in part to meet demand from the U.S.


In Brazil, Czarnikow said in its monthly Biofuels Review that a combination of tighter availability and increasing self-sufficiency around the world has resulted in Brazilian ethanol exports falling by 50% from the previous year, and noted that US demand has fallen short of output leading to an exportable surplus.

Weaknesses in the corn market have also contributed to depressed ethanol values, increasing the US’s competitiveness on the global ethanol market, according to the Czarnikow Group’s research team.

Read the original article here.

Written by Jason

April 24th, 2010 at 11:48 am

Circling the wagons, the firing squads and the arguments: ethanol wars explode in print, TV

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Among many interesting topics to be discussed here is that UNICA is targeting more progressive outlets with their ads. While it’s fairly clear why progressives may not fall in line with big business in the corn belt, it’s not clear to me that they’ll be very excited about sugarcane ethanol from Brazil, given the rather negative press it’s sometimes received. This isn’t to say that that negative press is true, I’m just curious what more folks think.

Who's on which side, now?

The US corn ethanol industry has been up against it lately. For one, the meat and dairy industries have abandoned their alliance with corn for a partnership with environmentalists,. A second front opened when Brazilian and US ethanol interests split over the ethanol tariff.

The ethanol cold war developed into a hot one this week when television and print advertising campaigns debuted both from Brazil’s UNICA and the US-based Growth Energy.

The American Enterprise Institute’s Ken Green told the New York Times that there’s no mystery in the timing. “Senator Kerry is now saying that they’re going to have an energy bill in the next three weeks. [The ethanol lobbies] want to turn up the heat on what’s in this new energy bill and how it treats ethanol.”

[…]

The UNICA ads will appear, at least through this month, in Roll Call, National Journal, Congressional Quarterly and the website Politico, and will also feature a sponsorship campaign on public radio and the debut of a new sweeteralternative.com website. Total UNICA ad buys are “less than one-tenth” of the Growth Energy budget, according to UNICA’s estimate as quoted in the Times report.

Read the entire article here.

Growth Energy: Brazil Ethanol Import Tariff Cut No Reason to Reduce U.S. Tariff

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If Growth Energy CEO Tom Buis is advocating corn ethanol as a means to energy independence, I simply cannot agree. Corn production under the status quo is far to dependent on fossil fuels for fertilizer production and at many other points along the production chain to wean us off our dependence on imported energy resources.

This is not to say that we should open our economy to Brazilian ethanol. My jury is still out on that question, and I always lean towards local energy independence, but corn ethanol, currently projected to reach 15 billion gallons in 2015, and to remain there at least for the seven years following, is economically and energetically inefficient, and is a poor use of land.

Mr. Buis is correct to point out that the ethanol industry in Brazil has enjoyed significant government support since its inception in the 1970’s, though that support is all but gone today. The Brazilian government supported an industry with the vision of moving that industry to the free market.

The U.S. corn industry, on the other hand, has not only enjoyed more government subsidies and over a longer period of time, but does not show any signs of moving towards the free market.

Finally, having worked with engineers and many others who are developing cellulosic and other bioenergy technologies, I believe that these show great promise as renewable fuels that do move us towards energy independence while also being environmentally friendly and promoting rural economic development. I have yet to hear, however, a valid argument regarding why there is a need for the continued expansion of corn ethanol production as a bridge to this next generation of bioenergy technologies.

Date Posted: April 6, 2010

Washington, DC—Growth Energy, the coalition of U.S. ethanol supporters, issued April 6 a statement in response to the Brazilian Government’s announcement that it will remove its tariff on imported ethanol.

“We would not support reducing the U.S. import tariff, despite whatever Brazil is temporarily doing, because Brazilian ethanol already enjoys generous subsidies from the Brazilian government and to provide them access to additional subsidies from the U.S. government makes no sense,” said Growth Energy CEO Tom Buis.

Read the entire article here.

EPA reaffirms sugarcane biofuel is advanced Renewable fuel with 61% less emissions than gasoline

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This is huge. It blows open the door for vast increases in U.S. importation of Brazilian ethanol. I’m not sure if this is positive or negative, but it makes the work I’m doing, investigating the possible impacts of this increased importation, that much more pressing.

There is currently a tariff on imported ethanol here in the U.S. of $0.54 per gallon. We are still the largest importers of Brazilian ethanol, but it is a small fraction of both their production and our biofuels use. This ruling makes it increasingly likely that the U.S. will have to do something to lower or at least suspend this tariff in order to meet the Renewable Fuel Standards (RFS).

The Energy Independence and Security Act, which created the RFS (much discussed on this site) was signed into law by George Bush in 2007. Not only does it mandate increasing amounts of renewable fuels, mostly ethanol, in our fuel supply stretching out to 36 billion gallons in 2022, it also mandates use of “advanced biofuels,” which must reduce greenhouse gas emissions (GHGs) by at least 50% compared to gasoline.

For now, the only fuel that may be able to satisfy that mandate is Brazilian sugarcane ethanol.

There has been much debate regarding which fuels accomplish this GHG reduction, with many reliable models both including and excluding U.S. corn ethanol, while almost all of them maintain that Brazilian cane ethanol does indeed reduce GHGs by at least 60%, with some claiming it reduces emissions by as much as 80%.

This ruling by the EPA doesn’t necessarily end the debate, but it makes it law that, according to U.S. policy, Brazilian cane ethanol is the only renewable fuel available today on sufficient scale to accomplish this objective.

I’ll be in Brazil later this month to gather more data, mostly asking the folks there what they think.

02/03/2010

The U.S. Environmental Protection Agency (EPA) has confirmed that ethanol made from sugarcane is a low carbon renewable fuel, which can contribute significantly to the reduction of greenhouse gas (GHG) emissions. As part of today’s announcement finalizing regulations for the implementation of the Renewable Fuel Standard (RFS2), the EPA designated sugarcane ethanol as an advanced biofuel that lowers GHG emissions by more than 50%.

Read the entire article here.