United States and Brazil Strengthen Biofuels Partnership
By Carl Wolf, BCS, Incorporated
On March 9, 2007, Brazilian Foreign Minister Celso Amorim and U.S. Secretary of State Condeleeza Rice signed a memorandum of understanding advancing the cooperation of biofuels between the two countries. [i]The agreement features the importance on biofuels as a transformative force in the region to diversify energy supplies, reinforcing economic prosperity, improving sustainable development of biofuels, and protecting the environment. Multilaterally, the United States and Brazil intend to work with the International Biofuels Forum to examine development of common biofuels standards and codes to facilitate a universal understanding of the energy source. The U.S. and Brazil are attempting to head start a biofuels initiative that will first bring the America’s onto the same page on the subject, and eventually the globe. This bilateral cooperation will reduce dependency on fossil fuels, lower greenhouse gases, and encourages prosperity within the region.
In addition, The National Institute for Standards and Technology held a workshop September 14th through 15th of 2006 between the United States and Brazil titled Measurements and Standards for Biofuels: Enabling a Transition from Petroleum as a Vehicular Energy Source. [ii]The goal of the workshop was to to establish a collaborative program regarding the standards and metrology of biofuels. The workshop consisted of three sessions: using the experience and expertise from the fossil fuels and hydrogen academia and applying it to biofuel research and development, using molecular and structural biology for biofuel research; and creating an "ethanol cluster" among major ethanol producers. This would integrate all aspects of ethanol production and allow the sharing of information and development much easier and efficient. The overlying factor is that in order to best utilize information on the subject cooperation, especially regarding the metrology and standards of biofuels is essential.
Brazil has been at the forefront of renewable energy production for many years since the oil crisis of the 1970’s, which saw soaring oil prices. Brazil set goals to reduce their dependence on oil from the Middle East. In 1975 Brazil began its alternative energy campaign which focused on converting sugarcane into ethanol. While most U.S. ethanol is corn based, Brazil favors sugarcane because of its arable land and positive climate. [iii]This transition initially saw Brazil struggle to develop efficient technology for its domestic energy needs, though recently have experienced enormous success not only on the domestic level but also internationally. They recently have developed the technology for flex fuel cars that can run on gasoline, ethanol, or any combination of the two. Flex fuel cars were first produced in Brazil in 2003 and already represent 70% of new passenger car sales. While Brazilian drivers currently consume 83% of the countries total ethanol production, the exportation of ethanol has been steadily increasing in recent years. With the adaptation of blending mandates all over the world, the country will most likely see an increase in foreign investment. Brazil is the world’s largest exporter of ethanol and with the U.S. their biggest client, the cooperation between the two on the issues related to the subject only makes sense. These future agreements between the two, as well as the EU and other players in the ethanol market will help the industry develop into what is expected by many to be the energy of the future.
On March 2nd 2007, the International Biofuels Forum was launched. The forum, which falls under the United Nations, is a major step to encouraging cooperation, global development and the use of biofuels. Members include the United States, Brazil, the European Union, China, India, and South Africa. Brazil’s Foreign Ministry has been organizing the creation of this forum for over a year and seems very pleased at the way it has come together. [iv]"Today, if you talk about biofuels, it is classified as an agricultural product, not an energy product," said a Brazil Foreign Ministry spokesman, "But one of the main objectives of forming this group of nations is to change this concept." The forum was created under the notion that the rising oil prices are causing a need for international cooperation in regards to renewable energy. While this is likely to benefit the major exporters of ethanol, like Brazil, the forum intends to aid developing countries in utilizing biofuel technology as well. [v]"There will be two groups created by the forum," said the spokesman. "The first will be a group that exchanges information and experiences about biofuels, while the second will be a more technical work group that will discuss the standardization of different types of biofuel to establish a common norm."
In Decemeber 2006, Jeb Bush, former Governor of Florida; Roberto Rodrigues, President of the Superior Council of Agribusiness and Former Minister of Agriculture of Brazil; and Luis Alberto Moreno, President of the Inter-American Development Bank (IDB) joined together to establish the Interamerican Ethanol Commission. The commission’s goal is to [vi]promote the usage of ethanol in the gasoline pools of the Americas. [vii]The organization will act as an ethanol think tank and provide valuable information to the region regarding its research and development while also traveling abroad giving presentations regarding ethanol in an attempt to raise public awareness of the technology. [viii]
Japan is expected to soon pass legislation that will require its gasoline to contain at least 3% ethanol; consequently, a much larger supply will be needed. As a result, they are engaging in negotiations with Brazil regarding the logistics of such a trade agreement. Reports say a deal supplying these Japanese markets could cost up to $8 billion. In addition, new EU policy requires member countries to acquire 20% of its energy from renewable energy sources could also mean an increase in Brazil ethanol exports.
[ix]Brazil is not only the lowest-cost producer of ethanol in the world, but also one of the few countries having significant quantities of land available for agricultural expansion. With these emerging markets and vast resources, Brazil will obviously have to have to raise its level of production to meet market demand. Government officials stated that they are planning to double their export of ethanol to about 4 billion liters within the next five years. Brazil’s Finance Minister, Guido Mantega, has long been pushing for the further exportation of ethanol. In regards to the subject, he claimed that [x]"it's possible to give more importance to ethanol. We can develop joint projects in such a way that we can introduce these alternative energy sources into regular consumption."
[i] U.S. Department of State Fact Sheet. March 9, 2007. http://www.state.gov/r/pa/prs/ps/2007/mar/81589.htm
[ii] http://www.nist.gov/oiaa/biofuels.htm
[iii] David J. Lynch. "Brazil Hopes to Build on its Ethanol Success". March 28, 2006. USA Today. http://www.usatoday.com/money/world/2006-03-28-brazil-ethanol-cover_x.htm
[iv] Grace Fan. "Brazil, US, Others Launch International Biofuels Forum Friday."
Dow Jones Newswires. March 1, 2007. http://www.cattlenetwork.com/content.asp?contentid=110157
[v] Grace Fan. "Brazil, US, Others Launch International Biofuels Forum Friday."
Dow Jones Newswires. March 1, 2007. http://www.cattlenetwork.com/content.asp?contentid=110157
[vi] "Florida, Brazil, And IDB To Launch Interamerican Ethanol Commission" December 18, 2006. http://helpfuelthefuture.org/mediaroom-pressrelease-dec18-english.htm
[vii] Vanessa Bauzá. "Florida may be center of Brazil-U.S. alliance on ethanol." South Florida Sun-Sentine. March 9, 2007. http://www.sun-sentinel.com/business/local/sfl-aethanol09mar09,0,2928692.story?track=rss
[viii] Bill Belew. "Japan-Brazil Ethanol Investment Could Reach $8 billion."March 5, 2007. http://www.risingsunofnihon.com/2007/03/japanbrazil_ethanol_investment.html
[ix] Grace Fan. "Brazil, US, Others Launch International Biofuels Forum Friday."
Dow Jones Newswires. March 1, 2007. http://www.cattlenetwork.com/content.asp?contentid=110157
[x] "Brazil to Double Ethanol Exports." February 5, 2007. http://asia.news.yahoo.com/070205/3/2wx3y.html