Brazil Sees Ethanol as Its New Economic Frontier

Ethanol is Brazil’s new economic frontier, according to Antônio Barros de Castro, director of planning at the National Economic and Social Development Bank (BNDES).

He made this observation in comments on the country’s trade diversification, in terms of both products and regions. He even suggested that Brazil should be the world leader in this advance.

"The Brazilian economy is quite internationalized nowadays, which constitutes a positive phenomenon. It exports all over the world. Our eggs are in all baskets," he affirmed.

Barros de Castro expressed optimism over ethanol, because it is an area in which "innovations can arise." He went on to say:

"It is no longer just Japan, with an order for 10 million liters under negotiation. It is also California, and there are various other signs that the situation is hugely favorable to ethanol."

The director recalled that the alcohol supply chain "extends from sugar cane to a point where biorefineries, plastics, etc, are to be found. It is full of fronds, with various branches, and Brazil has shown that it is getting ready to occupy the area in force."

In his view, Brazil must still overcome two limitations. The first is that the ethanol market is still not adequately structured.

"Ethanol still does not exist as a commodity. That is, there is no standardization. Brazil must help build this market, so that consumers can be confident that, when they purchase ethanol, they are buying something with which they are perfectly familiar and which possesses certain well-defined properties."

The other limitation, according to Barros de Castro, is that, to build this market, Brazil should not go it alone. He emphasized the need to pluralize the ethanol economy.

"We will only be able to export on a large scale, if we help other countries, such as South Africa, India, and Mexico, to produce ethanol. It would be ideal for Brazil to lead this process, but, due to the problem of energy security, it would be totally counterproductive to have an overbearing influence in it."

The director informed that "a genuine wave of refinery construction," with 80 enterprises, is underway. And that a study sponsored by the Ministry of Science and Technology adduces two scenarios for the addition of ethanol to gasoline, in ratios of 5% and 10%.

"This would imply a leap in the Brazilian presence and a growing affirmation of the ethanol energy route, which justifies our enthusiasm," he added.

Agência Brasil

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