Sugarcane for energy – recent results and progress in Brazil

Abstract

Ethanol is being used as a fuel in the transportation sector in Brazil and in a few other countries. It started to be used in significant amounts in Brazil in a blend with gasoline in 1975 and as a neat fuel in automobiles in 1980. The first use continues and all gasoline sold in the country contains 24% ethanol. The second use showed a rapid evolution, covering more than 90% of the new cars produced in 1989; after a shortage of supply in that year the number of new neat ethanol automobiles decreased very fast, reaching less than 1000 cars by 1997–98. By 1999 a modest reverse of this trend had occurred. Considering both types of use, ethanol demand has stabilized since 1995, but at present some decline in demand is foreseen for new neat ethanol cars for several years in the first decade of the 2000s. The government has an interest in maintaining the use of this alternative fuel because of several merits, e.g., the large number of jobs created in the field and the significant amount of hard currency saved on oil imports. On the other hand, most of the subsidies provided to ethanol producers have been removed because they have been in existence for a long time. Some subsidies are still in force, such as the over-price paid to producers in some states where it is understood that they are not capable of competing with the major producers of the South/Southeast region. There is enough evidence that through the “learning by doing” process ethanol fuel producers are learning how to bring down costs and they already have the ability of competing with gasoline, which is heavily taxed to cover the sales of some petroleum products at prices below production costs. Technology has improved and further progress may be made, allowing a reduction in the ethanol fuel production cost. Nevertheless, oil prices for several years up to 1999 also declined, making the competition between gasoline and ethanol difficult. By 1999, with the rebound in oil prices, the federal government reinvigorated its interest in the ethanol market through some political initiatives. Such evidence of interest and the present increase in oil price may offer the opportunity required to restart large scale production of neat ethanol automobiles. The electricity market is opening up space for the use of large amounts of biomass residues, obtained during ethanol processing, as a fuel in steam boilers. The interest is growing and more modern technologies can be used, allowing the production of up to 6000 MW of electricity using the sugarcane residues, bagasse and barbojo. Another technology which is under consideration is the development of suitable re-formers to allow the use of ethanol in fuel cell-powered vehicles. Considering the significant success of ethanol as an automobile fuel and for electricity generation this paper tries to make an assessment of the future trend. It is very useful to recognize that during the last 40 years, average sugar prices (the only alternative market for ethanol from sugarcane) have been continuously declining, while average gasoline prices have moved in the opposite direction. This trend helps commercial competition between the two fuels. In addition, the potential economic value of a renewable fuel through carbon emission certificates can impact positively on ethanol. Significant carbon abatement results from the use of ethanol derived from sugarcane due to the very favorable energy balance of the entire process.