Brazil’s Leadership in Ethanol Was Born in the 1930s

Brazil's ethanol distillery

Thirty years ago, when one liter of ethanol was worth three times more than
one liter of gasoline, most nations would not have considered investing in it as
a biofuel. But Brazil took this path, and now produces the cheapest ethanol in
the world.

Brazil’s favorable conditions and tradition for culturing sugarcane – the most efficient raw material for the production of ethanol – were essential for developing the sector.

But it was the government’s massive investment in infrastructure and research between 1975 and 1989 that allowed the country to become a leader in the ethanol market.

Brazil’s ethanol industry started in the 1930s. With more sugar than it could use, the government directed sugarcane into ethanol production and made the addition of ethanol to gasoline compulsory.

But it was in 1973 that the industry really progressed. An international oil crisis doubled Brazil’s expenditure on oil imports and the government was forced to consider alternative sources of energy to decrease its dependency and spending on fossil fuels.

With that in mind, the military government launched the National Alcohol Program (Pro-Álcool) in 1975 to increase ethanol production as a substitute for gasoline.

It invested in increasing agricultural production, modernizing and expanding distilleries, and establishing new production plants. It also introduced subsidies to lower prices and reduced taxes for ethanol producers.

Over the next 15 years, production of ethanol increased hugely from 0.6 billion liters in 1975 to 11 billion liters in 1990.

During the first phase of the program in 1975-78, one part of ethanol was added to four parts of gasoline and there was an additional processing stage to remove water from the fuel.

By 1979, production had been streamlined to focus on hydrous ethanol (containing 5% water) that could be used in cars fueled entirely by ethanol.

Researchers at the General Command for Aerospace Technology, the national research center for aviation and space flight located in São Paulo, developed alloys to protect the internal parts of gasoline-powered engines and fuel tanks from corrosion by ethanol. At the program’s peak in 1986-89, 90% of all new vehicles sold in the domestic market were ethanol-fueled.

Roberto Schaeffer, professor of energy management and policy at the Federal University of Rio de Janeiro, says creating the market was a “huge national effort” requiring a lot of financial investment. “The government was criticized at that time, but the fact is that it was a success,” he adds.

The Science Behind

Behind the success of the program were important scientific and technological advances in agriculture and industry.

“The production of 40 tons of sugarcane per hectare was more than doubled,” says Schaeffer. “It was a unique experience, in which the government and the private sector together invested in research and improvement of a particular product.”

Key developments in agricultural research came from the Campinas Agronomic Institute, which has been working on sugarcane improvements since 1933, and the School of Agriculture Luiz de Queiroz at the University of São Paulo.

Using traditional breeding techniques, researchers produced varieties adapted to different soil and climate conditions, with shorter production cycles, better yields, and tolerance to water scarcity and pests (such as the devastating fungus that caused sugarcane rust in the 1980s).

“Researchers working in the area anticipated the appearance of diseases,” says Oscar Braunbeck, professor of agricultural engineering at Campinas State University. “If there weren’t genetically improved varieties of sugarcane, it could have been a huge problem for the sector.”

In production, new grinding systems were developed and the fermentation process adapted to use different microorganisms and enzymes to produce more ethanol faster.

The Sugarcane Technology Center, a privately-funded research institute in São Paulo, was key to improving ethanol production technology, having invested about US$ 20 million a year in research at the peak of the program.

A problem at the time was waste. The vinasse, a corrosive liquid byproduct of ethanol distillation, was dumped in rivers, causing environmental damage. But the vinasse was found to be a good fertilizer, and in the 1980s Braunbeck and a team at the Sugarcane Technology Center developed a transportation system, involving a combination of trucks, pipes and ducts, to carry it from the distilleries to the fields.

Researchers at the center and other institutions also found ways to use leftover sugarcane fibre, known as the bagasse, to produce energy, building on existing methods of burning the bagasse to power steam turbines for electricity generation.

They developed cauldrons under greater pressure so more energy could be produced, allowing many ethanol plants to become autonomous in terms of energy. This contributed significantly to keeping ethanol production costs low.

New Technologies, New Demand

The infrastructure developed and advances made enabled the program to survive a turbulent period at the end of the 1980s, when the government cut public investment after a crash in the price of oil, and a sugar supply crisis led to sugarcane resources being diverted to sugar production over ethanol. Although this had a short-term impact, demand remained high and almost five million ethanol-fuel cars were in circulation by the 1990s.

Today, Brazil is the second biggest producer of ethanol in the world (20 billion liters) after the United States (24 billion liters). Close to 80% of this is for the domestic market – the fuel used in 45% of Brazilian vehicles is ethanol.

Part of the demand is down to the success of flex-fuel cars, which can run on gasoline, ethanol or a mixture of both. The cars were developed by engineers at Bosch, a German company, in São Paulo and released in 2003. The engine works differently depending on the quantity of oxygen produced by the type of fuel burned, which is measured by a sensor.

Flex-fuel cars renewed consumer interest in ethanol and intensified demand for ethanol biofuel. According to Brazil’s National Association of Vehicle Manufacturers, Anfavea, 85% of cars – some four million vehicles – sold in Brazil today are flex-fuel.

“There has been another jump in the demand for ethanol,” says Alfred Szwarc, a consultant for the Sugarcane Industry Union. “Flex-fuel cars increase consumption and we are observing a growth in this market.”

The success of flex-fuel and the need to reduce carbon emissions have inspired a search for new applications of ethanol. Researchers at the Delphi Technology Center in Sao Paulo have developed a fuel system for motorcycles that can also use ethanol-gasoline blends in any proportion.

The first ethanol-powered bus, developed at University of São Paulo, will undergo road tests in December to test its economic viability. And Brazilian aviation company Embraer has had an ethanol-fueled agriculture monoplane in use since 2004.

“During the last 30 years, what we did was to become professional in the use of conventional [ethanol] technology,” says Braunbeck. “From now on, we need to develop new technologies to keep our leadership in the sector.”

New Challenges

With international demand for renewable sources on the rise, Brazil has many challenges to face if it is to continue at the forefront of the ethanol market. One is to increase its already significant production without environmental or social damage.

Producing ethanol from sugarcane bagasse and straw would be a step in the right direction. These components are rich in cellulose and turning these into ethanol would allow the entire sugarcane biomass to be used with no wastage. One ton of bagasse can produce 186 liters of ethanol. But there are doubts over the economic viability of the process, which requires more water and produces more polluting byproducts like the vinasse.

A large production of ethanol, however, is no guarantee of market superiority for Brazil or the success of the ethanol industry internationally.

Brazil is offering its expertise to nations worldwide, especially developing countries that could produce biofuels but still depend on oil.

Brazil also hopes to expand its ethanol market. “It is a good deal for both sides,” says Schaeffer. “For a Caribbean or African country, it is better to import technology from Brazil and learn to produce their own goods than to keep importing oil from the Middle East.”

“We have the equipment and the administrative capacity to make big plants work and the technology in both the industrial and the agricultural phase,” says José Roberto Moreira, a University of São Paulo researcher and advisor at its National Center of Reference in Biomass. “It is easy to start an ethanol project in another country with this know-how,” he says.

Many countries have already shown an interest in the trade. This year Brazil has signed agreements with countries in Africa, the Caribbean and Latin America.

Most of these agreements involve transfer of Brazil’s ethanol production technology. In the west African country of Benin, for example, Brazil will use its expertise to help develop production capacity.

In Angola, Angolan and Brazilian oil companies are to build a facility to produce sugar, bioenergy and ethanol from sugarcane. The facility is expected to produce 150 million tons of sugar, 50 million liters of alcohol and 140 megawatts of electricity per year. The construction is scheduled to begin in the first semester of 2008 and the joint venture involves an investment of US$ 200 million.

There is clearly the hope of establishing an ethanol trade with these countries, says Szwarc. “But even if this doesn’t happen, we are at least creating the proper conditions to consolidate a stable market for ethanol and to expand it in the future.”

This article appeared originally in Science and Development Network –


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