Biofuel

Brazil Displays Biofuel Advancements

By Heather Ishimar

The president's first stop in Brazil is an ethanol plant. Brazil is the world's largest ethanol producer -- and more than half of its new cars can run on an ethanol. So how did Brazil get so far ahead of the U.S. on this cleaner, biofuel? And why is Brazilian ethanol all but kept out of the U.S. market?

For 30 years, Brazil has worked toward ending its dependence on foreign oil by focusing on converting to ethanol. It can produce ethanol cheaply and in great volume because it has the ideal climate and conditions for growing the raw material, sugar cane. Brazil has about 10 distilleries where it processes that crop into both sugar and ethanol, depending on global market conditions.

President Bush will visit one of them tomorrow. UC Berkeley Professor Alex Farrell studies energy and transportation issues. He says Brazil is so far ahead of the U.S. on ethanol because we don't grow as much sugar cane. And, because of Brazil's longstanding public policy commitment.

Alex Farrell, UC Berkeley: "Like the U.S. in the mid-1970's, Brazil got very interested in ethanol as a fuel and it began to pursue public policies to promote ethanol, and they stuck with it."
President Bush has set goals for increased use of alternative fuels in the U.S.- and yet there is a 54-cent per gallon excise tax on foreign ethanol. Washington-based budget watchdog group 'Taxpayers for Common Sense' says that tax means its not worth it for Brazil to export its ethanol to the U.S..

Alex Farrell, UC Berkeley: "We've got Brazil, a place that makes it efficiently and with plenty of room to expand their production - and we'd like to see that allowed to be imported into the United States."

'Taxpayers for Common Sense' ethanol expert Damien Moore says the tax is designed to protect the U.S. sugar and ethanol industries.

The president's trip to Brazil might engender goodwill in the region, but only Congress has the power to end the excise tax, and it is unlikely to do that.

Alex Farrell, UC Berkeley: "We have some pretty powerful farm state senators and members of the house that are not interested in letting foreign ethanol into our country."

Moore says the excise tax is set to expire in the next couple years, so we can expect the debate
on it to start heating up soon - Reuters.