Brazilian and USA models of implementation for the bioethanol industry

Since the Arab oil embargo of the 1970s, Brazil has made an incomparable effort in the reduction of its energy dependency by intensifying and extending sugar cane-based bioethanol production. Although the alternative periods of scarcity and abundance of oil have marked fluctuations in the strength of the Brazilian Alcohol National Programme (Proalcool), the global trend has been an ascending progression in the total production of alcohol, as well as in the yield per hectare of sugar cane, and the implantation of this alcohol as transportation fuel. Today, Brazil is the second largest worldwide ethanol producer. In this way, Brazil has reduced its energy dependency, and has become the first ethanol exporter. According to Brazilian Government data, this milestone has been achieved on the basis of rural employment and welfare improvement. The key aspects of the Proalcool programme are a combination of technological advances, social planification and projection of the bioethanol industry. According to the Brazilian Government (Da Costa et al., 2010), owing to the high productivity of sugar cane, Brazil has expanded ethanol production and use without a significant increment in the fertile land surface used to cultivate sugar cane, or a food vs. fuel competition. However, there are several authors who are not so enthusiastic with the success of the Brazilian model, and point to the sugar cane industry as one of the reasons for the losses in biodiversity and the expansion of agricultural land over doubtfully catalogued marginal land, which is more relevant and dangerous than the Brazilian Government data indicates (Coelho et al., 2008; Gauder et al., 2011).

On the other hand, the American bioethanol industry choice of corn grain as its raw material has been followed by a dramatic rise in the prices of corn derivatives. Although the USA production of bioethanol supersedes the Brazilian one, the production:consumption ratio of the former (1:3) is much smaller than the latter (8:3). Despite its commercial orientation, the global efficiency of the USA model is low compared with the Brazil system and relies on the high importation taxes that protect the American industry from foreign ethanol inputs (Da Costa et al., 2010). Finally, the narrow margin of the USA production:consumption ratio suggests that the model has reached a production glass ceiling that blockades the medium — term implantation of biofuels in American society and hampers their exportation (UNCTAD, 2010; Da Costa et al., 2010).