Brazil Signs Pact to Send Japan 800 Million Gallons of Ethanol a Year

An old poster touting Brazilian ethanol Brazil's state-controlled oil company Petrobras and the Japan Bank for International Cooperation signed Monday, March 5, in Rio do Janeiro a memorandum of understanding on biofuels announced Petrobras.

The Brazilian oil company and JBIC plan to evaluate financing possibilities for biofuel projects to be developed jointly by Petrobras and Japanese companies, both inside and outside Brazil.

Projects include the production and sale of ethanol and biodiesel, electric power plants using sugar cane bagasse (the woody material left after squeezing all the sugar out of the cane). as raw material and carbon credit opportunities, reported Petrobras in an official statement.

Petrobras Chief Executive Sergio Gabrielli and JBIC Executive Director Hiroshi Saito signed the memorandum in Rio de Janeiro.

"The world is growingly aware of the problems linked to global expansion, but also to those related to the Kyoto Protocol and the need to develop alternative sources of energy", said Gabrielli.

JBIC CEO Hiroshi Saito said the agreement signed in Rio do Janeiro is targeted to "build a wide relation having in mind the export, marketing and sale of biofuels to the Japanese market" and Petrobras "is the best and largest associate for biofuel projects since they dominate the technology and have a huge transport structure".

According to the contract by 2011 Petrobras should be exporting to Japan 3 billion liters of ethanol annually to be used as transport fuel in Japan in a 3% proportion. In Brazil the current percentage is 23%.

Petrobras ethanol strategic long term project contemplates investments of US$ 2.4 billion until 2012, which will be mainly destined to the construction of an ethanol pipeline linking different southeast, center-west and Southern states with the main terminal in Paulí­nia, São Paulo.

The plan also includes having Petrobras acquire a participation in 40 new ethanol plants and deposits for the shipping of the biofuel to Japan.

Petrobras estimates that if ethanol exports by 2011 reach eight billion liters per year, double the current data, the company would consider constructing a second pipeline.

The partnership to help supply Brazilian ethanol to the Japanese market is estimated to cost US$ 8 billion, daily O Estado de S. Paulo reported.

Brazil exported a total of 900 million gallons of ethanol in 2006, of which Japan received less than 7% or 60 million gallons, according Brazil's Agriculture Ministry

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  • Ric

    Piggishness?
    The truth is that when Sears came to Brazil the counter designs and marketing was like the USA but the products were the same old local junk because in those days Brazil wouldnÀ‚´t allow any consumer goods to come into the country.

    Now things have changed and items from China are available. You must realize that the Chinese retail items available in the states are of a better quality than those offered here. Because of poder acquisitivo and because cheap sells in Brazil, not quality.

    You blame the local availability of shoddy goods on the USA? Stooooopid.

  • conceicao

    I completely agree with Anderson. The tariff is just pure piggishness on the part of people in an area of the U.S. who are used to getting their way on stuff like this. These are the
    same people who brought the U.S. the dinosaur auto manufacturers and retail chains like Sears and K-mart and then shoved inferior goods down the throats of people in the rest of
    the country, especially the South. What Toyota and Honda have done to GM, Ford, and Chrysler and what Wal-Mart has done to Sears and K-Mart, Brasilian ethanol needs to do to these
    user U.S. Midwest corn farmers and their cronies – and the sooner the better.

  • Ric

    Ethanol
    Is interesting short term but canÀ‚´t begin to help significantly with the coming energy problems in the USA.

    Maybe people not in Brazil are not aware that most household ethanol here is not denatured. If it is it will be clearly marked. They tried to so something about that by making household ethanol into gel, nobody bought it.

    So life is much easier here for winos. Buy a liter of pure ethanol, maybe a dollar, cut it 50% with water and youÀ‚´re okay for a day or two.

    At the gold fields they outlawed booze, but continued to sell ethanol, stopped that, but no one figured out why tons of Biotonico Fontoura were being shipped to the Serra. Mainly alchohol. So they made the manufacturer cut down the alchohol. But it took the authorities a long time to figure it out.

    Much of what is sold as cheap vodka, whiskey, wine, you name it, is actually industrial grade sugar cane ethanol that has been flavored, colored, and maybe mixed with something else.

    Not that you wanted to know, but now you do anyway.

  • Anderson

    ch.c ur just showing what the us does to whoever it wants like brazil if the us decides itdoesnt want to benefit brazil which would also be helping themseves this is what they do, they look for other ways to get it even if its more expencive.
    but you wont be able to ignore brazil. sooner or later the us will be coming after brazil for ethanol

  • conceicao

    Plans like this to make the U.S. corn-based ethanol industry economic are all too reminiscent of Castro’s scheme to counteract milk shortages in Cuba by breeding miniature cows small
    enough to live in apartments and be available to be milked when needed. Technology combined with socialist ardor and a can-do spirit is an unbeatable combination!

  • ch.c.

    Funny article !
    In total contradiction with another article of yesterday in this site where it says ” Brazil, with its vast land resources, is hoping to produce enough ethanol to satisfy 10 percent of the world’s demand for gasoline within the next 20 years.”

    10 % of world gasoline production wont be achievable with ethanol, even in 20 years, and even when all world producing countries are combined”

    Furthermore why should the USA become addicted to foreign sugarcane ethanol the same way they are actually addicted to foreing oil imports ??????
    Imports are imports anyway you look at it !
    Much better that they produce their own energy with corn and shortly with switchgrass, woods, etc, even if the cost is higher !
    And their costs is higher only now, but new technologies will reduce their costs over time. They dont have the climate to produce a lot of sugarcane fields but they have tens of billions US$ available for investments in R&D and technology, billions of dollars and technological prowess, skills and knoweldge Brazil DOESNT HAVE

  • conceicao

    The U.S. is really hurting itself by not locking up long-term supply contracts with Brasilian producers now. The article also shows that, despite market forces which will inevitably soak
    up Brasilian production at a free-market price over time, the U.S is really the only game in town for taking down a big increase in Brasilian gasohol exports now, today.

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