What Prospects for the Brazilian Ethanol Sector?

Abstract

Brazil is the second largest producer of ethanol in the world. Brazilian ethanol is derived from sugarcane and is mostly used domestically as a transportation fuel. This article looks at the influence of Brazilian energy policies and biofuel policies on domestic ethanol supply and demand and considers the consequences of the economic and political crisis on the sector. It provides insights on the medium-term development prospects for the Brazilian ethanol industry. It considers the opportunities associated with the favourable Greenhouse Gas (GHG) emission reduction profile of Brazilian ethanol and with the development of co-generation and advanced cellulosic biofuels. It would appear that prospects for the Brazilian ethanol sector are potentially strong but dependent on governmental commitments.