Sugarcane ethanol: A gem of Brazil’s new energy sector

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Brazil has abundant land resources and is located in tropical regions; it produces a large amount of sugarcane. More than 30 years ago, the Brazilians used sugarcane as a raw material to develop sugarcane ethanol as an alternative to gasoline for vehicles, facing many difficulties and challenges along the way. In today’s world, where oil prices are high, non-renewable fossil fuels are becoming increasingly scarce, and the impact of emissions from fossil fuels on climate change is receiving more and more attention, sugarcane ethanol fuel from Brazil stands out as a remarkable solution. Its advantages include low emissions (its carbon dioxide emissions are 90% lower than those of fossil fuels), low cost (the production cost per liter of sugarcane ethanol is currently 0.2 dollars), and the availability of abundant, renewable raw materials. Looking back at Brazil’s history of sugarcane ethanol development, there may be some things worth reflecting on. When driving through the cities and highways of Brazil, gas stations can be seen everywhere, which is very convenient. Gas stations in Brazil generally offer four types of gasoline fuels. The first is regular gasoline, the second is regular ethanol, the third is regular gasoline with additives (that is, regular gasoline to which a certain proportion of additives are added to keep the vehicle’s fuel system clean and reduce exhaust emissions), and the fourth is premium gasoline. Both regular gasoline and gasoline with additives have an octane rating of 87, while premium gasoline has an octane rating of 91. Brazilian law mandates that a certain percentage of ethanol be added to all types of gasoline, with the current percentage being 25%. 95% of cars in Brazil are FlexFlue vehicles capable of using any of the four aforementioned fuels, or a mixture of gasoline and ethanol in any proportion. A Brief History of Sugarcane: Brazil’s ethanol fuel is derived from sugarcane, a plant of the genus Saccharum in the grass family, which grows in tropical and subtropical regions. The sugar content in the stem accounts for 55%–70% of its dry matter weight. During processing, the sweet juice extracted is concentrated to produce sucrose crystals, which are an essential food ingredient for humans and have a wide range of applications in medicine and industry. Bagasse can be used to make wine and alcohol, as well as for feed and fertilizer; it is also an excellent raw material for paper production and a fuel source. There are generally three theories regarding the origin of sugarcane: one is that it originated in India, another is that it originated in New Guinea in the South Pacific, and the third is that it originated in China. China is one of the world’s ancient sugarcane-growing countries, with a long history of sugarcane cultivation. As early as the 4th century BC, there are historical records of sugarcane cultivation in our country. The term “sugar sand” already appeared in Zhang Heng’s work “Seven Debates” from the Eastern Han Dynasty. Tao Hongjing of the Southern Dynasties wrote in his \"Mingyi Bielu\" that sugarcane produced in Jiangdong is of the highest quality, and there is also good-quality sugarcane in Luling. In Guangzhou, there is a perennial plant that is as large as bamboo, reaching over ten feet in length; its sap is used to make sugar, which is very beneficial to health. There are also reed sugarcane shoots that are thin and sparse, which can also be eaten. ”It records the sugarcane varieties and cultivation areas; sugarcane can be used to make sugar or eaten raw. Descriptions of sugarcane are common in ancient Chinese literature. Records of making rock sugar date back to the Dali era of the Tang Dynasty. Sugarcane is a nourishing and cooling food that has been highly praised throughout history; even those refined and scholarly literati held it in high esteem. Wang Wei, a poet from the Tang Dynasty, wrote in his poem on cherries: “There’s no need to worry about internal heat when eating and drinking; even high-ranking officials can enjoy the coolness of sugarcane juice.” ”The great physician Li Shizhen had a different perspective on sugarcane; he said, “While drinking sugarcane juice is certainly good, it cannot compare to the lasting taste of chewing it.” ”It captures the subtleties of eating sugarcane in great detail. Sugarcane cultivation in Brazil: About 500 years ago, sugar was more expensive in Europe than gold. Due to climatic conditions, sugarcane could not be grown there, and its production was not sufficient to meet market demand; as a result, sugarcane cultivation became a highly profitable industry. Thanks to their mastery of navigation skills, the Portuguese began to actively engage in great voyages in search of new continents. One of the intentions is to plant sugarcane on new land. The explorations carried out by the Portuguese nobleman and explorer Martin Afonso de Sousa (1530–1532) introduced sugarcane cultivation to Brazil. Initially, sugarcane was mainly grown in alkaline soil under tropical hot and humid climates, with African slaves serving as the main labor force. In Brazil, the main region for sugarcane cultivation was initially Pernambuco State, where Brazil’s first sugarcane planting center was established. Later, sugarcane cultivation was extended to states such as Bahia, Rio de Janeiro, and São Paulo. Portugal became wealthy through sugar trade, which led to Brazil’s first economic boom period, the “Sugarcane Boom”. This stimulated the French, Spaniards, and Britons to start growing sugar cane in Central America. Many sugar mills were built, including large houses where the mill owners, their families, and servants lived, as well as churches, slave quarters, and well-equipped sugar-refining workshops owned by the mill owners. Many owners of sugar mills are also owners of sugarcane plantations, which are equally profitable. Those landowners who did not have their own sugar mills had to use the nearest mills to process their sugarcane, and they could only receive half of what was produced as a result of that processing. At that time, to process sugarcane, it first had to be crushed, that is, the sugarcane was flattened using rollers powered by water or animal power. After obtaining the sugarcane juice, it is sent to a heating chamber where it is concentrated in copper containers until it becomes transparent. Afterwards, it is taken to a purification room for further processing, turning the sugarcane juice into raw sugar, which can then be sold on the Brazilian domestic market. When trading in foreign markets or shipping to European ports, raw sugar should be crushed, dried, and packaged. The ethanol industry began with difficulties. Brazil’s early sugarcane growers probably never imagined that, 500 years later, sugarcane would find another use with even broader prospects – namely, in the production of ethanol as a fuel alternative to gasoline. Brazil’s sugarcane ethanol industry began in the 1970s. The two oil crises in 1973 and 1975 put Brazil, which could not produce oil on its own, in a very difficult situation. Due to a lack of foreign exchange, it is impossible to import sufficient oil, leaving the Brazilian economy on the brink of collapse. In 1975, Brazil **formulated the National Alcohol Program** to encourage the use of sugarcane to produce alcohol as a substitute for oil. The World Bank has invested heavily in Brazil’s sugarcane industry, expanding the area dedicated to growing sugarcane for alcohol production. Brazil’s energy balance for producing ethanol from sugarcane is five times that of producing it from corn, giving it a clear advantage. Sugarcane requires less fertilizer for growth and causes less environmental pollution, whereas corn needs a large amount of fertilizer; much of this fertilizer ends up in rivers through rainwater, thereby polluting the environment. Sugarcane ethanol is produced by directly fermenting sucrose extracted from sugarcane, while corn requires starch to be converted into sugar first, before ethanol can be distilled from it. To promote the use of sugarcane ethanol, in 1977 Brazil **mandated the addition of 20% ethanol (E20) to gasoline**. This policy requires all gas stations to provide ethanol pumps, while also modifying conventional car engines so that they can use E20, which is a gasoline-ethanol mixture. Since 1979, Brazil has begun producing E100 vehicles that use 100% pure ethanol. In 1984, cars equipped with alcohol-compatible engines accounted for 94.4% of the total car production in Brazil. The production of sugarcane alcohol has had initial success, entering its first **phase. A tortuous development process. However, starting in 1986, the impact of the oil crisis on Brazil’s economy diminished. Furthermore, domestic economic plans aimed at curbing inflation led to a decline in the production of alcohol-fueled vehicles, and an alcohol supply crisis began in 1989. By 2001, the annual domestic production of alcohol-powered vehicles had declined by 1.02%. World sugar prices also soared at this time, while oil prices fell. Sugar mills in Brazil immediately shifted from producing ethanol to manufacturing sugar directly, resulting in a sharp decline in ethanol production, a shortage of ethanol at gas stations, and numerous breakdowns of ethanol-powered vehicles. Brazil’s ethanol strategy suddenly hit a low point, as it became clear that engine powered by a single fuel – whether ethanol or gasoline – is vulnerable and unable to adapt flexibly to changes in supply and demand in the sugar and oil markets. The demand for blended alcohol decreased, but the use of fuel blends consisting of pure alcohol (anhydrous) and gasoline increased; at this time, there was growth in small cars in Brazil. Brazil developed automotive engine technology and a fuel supply system following a model without any precedents in the world; at that time, there were 28,000 fuel stations across the country where alcohol could be added to gasoline. **After the regulation period came to an end, a free market mechanism began to take shape; without subsidies, the prices of sucrose and ethanol were determined by fluctuations in supply and demand. The price of sugarcane depends on its quality and the proportion it accounts for in the final product. To promote and balance supply and demand, the private sector strives to establish a market mechanism similar to that of futures trading, and seeks to develop new opportunities for sugar and ethanol by removing protective barriers and positioning ethanol as an environmentally friendly product. In March 2003, Brazil developed flexible-fuel vehicles that could be powered by ethanol, gasoline, or a mixture of ethanol and gasoline in any proportion, sparking another period of growth for the ethanol industry. That year, Brazil began mass-producing ethanol-gasoline \"flex-fuel\" or \"dual-fuel\" engine vehicles. This new type of vehicle is equipped with inexpensive electronic sensors that analyze the ethanol-gasoline ratio, thereby automatically adjusting the engine. This type of vehicle can run completely on ethanol, at 100%, or on a mixture of ethanol and gasoline in any proportion. By 2005, almost all automotive giants had established production lines for ethanol-gasoline \"flex-fuel\" vehicles in Brazil. By 2008, a total of 5 million ethanol-gasoline hybrid vehicles had been sold. Currently, 3/4 of Brazil’s annual car production (about 1.72 million units) consists of ethanol-gasoline \"flex-fuel\" vehicles. Today, Brazilian cars come with three different types of engines: the earliest E20 gasoline-ethanol hybrid cars (whose production is decreasing year by year) ； 100%% pure ethanol E100 vehicles produced during the transition period (production has ceased) ； Currently, the most popular ethanol-gasoline “flex-fuel” vehicles are seeing an increasing production volume each year. Since the calorific value of ethanol is lower than that of gasoline, the distance that can be covered per liter of ethanol is less than that with gasoline. Therefore, the price of ethanol must also be 25%–30% lower than that of gasoline in order to reach the break-even point. At the same price, the ethanol-to-gasoline volume ratio should be at least 1.43; in other words, the cost of 1 liter of gasoline should be sufficient to purchase at least 1.43 liters of ethanol, so that consumers do not suffer a loss. At the end of April 2008, the volume ratio of ethanol to gasoline at the same price in Brazil was around 1.7. According to Brazilian ethanol producers, ethanol remains competitive as long as international crude oil prices remain above $30 per barrel. At the same time, Brazil **adopted three incentive measures to support the ethanol industry: the state-owned oil company guaranteed to purchase ethanol ； Provide low-interest loans to ethanol manufacturing companies ； The price ratio of gasoline to ethanol at fixed gas stations. Brazil’s rapidly growing sugarcane ethanol, coupled with recently discovered large oil fields, has enabled the entire country to achieve energy self-sufficiency. They no longer need to import oil. Furthermore, growing concerns over fossil fuel reserves and rising prices, along with attention to environmental and climate change issues, have made ethanol an important alternative fuel option that is sustainable for Brazil and the world. The market mechanism in the ethanol industry: Since the early 1990s, Brazil has abandoned the policy of free pricing under federal control; the prices of sugarcane, sugar, and ethanol (including pure ethanol and ethanol mixed with water) are determined by the market. Gradually, a Brazilian sugarcane industry system was formed in which the private sector plays the leading role, with protective policies serving as a supplement. The law establishing a free-pricing policy was enacted in 1991, but it was not until 5 years later that an **order was issued to finally liberalize ethanol prices. During this period, Brazil’s sugarcane ethanol producers examined the free pricing systems and agricultural subsidy regimes in various countries. Then, a team composed of 5 representatives of sugarcane producers and 5 representatives of the sugarcane industry developed a model based on a system that subsidizes raw materials according to the \"total extractable sugar\" standard. The São Paulo Association of Sugarcane, Sucrose and Ethanol Producers is an association composed of representatives from the sugarcane and ethanol industries as well as the sugarcane farming sector; its main task is to coordinate the relationships between those involved in the sugarcane industry and sugarcane growers. To this end, the association has established a payment system based on the color of sucrose, using technical standards for pricing according to the quality of sucrose in order to determine the quality of sugarcane delivered by growers and the price to be paid by sugarcane processors. This system is based on voluntary participation. Under this system, the value of sugarcane is determined based on the \"extractable total sugar\" – that is, the sugar content in the sugarcane raw material after deducting the losses incurred during processing – as well as the prices at which the company sells sugar and ethanol in domestic and international markets. Building a positive image: To develop markets for sugarcane ethanol both domestically and internationally, and in particular to enhance the image of Brazilian ethanol, on February 25, 2008, the Brazilian Agency for Export and Investment Promotion and the Sugarcane Industry Association introduced a strategy to promote the image of Brazilian ethanol as a clean and sustainable energy source. To this end, the two institutions signed a joint investment agreement. The strategy they are pursuing includes: enhancing Brazil’s global reputation for ethanol and its supply capacity ； Strengthen business intelligence research ； In particular, advancing actions for ethanol trade and enhancing the image of ethanol. The target markets for this strategy are North America, Europe, and Asia. The first overseas office was established by the Sugarcane Industry Alliance in Washington, D.C., the second office is located in Brussels, and the third office is planned to be set up in East Asia; the specific location remains to be determined. The Sugarcane Industry Alliance actively participates in various biofuel conferences, viewing them as good opportunities to promote the relative advantages of sugarcane ethanol and to sign cooperation agreements. The strategy also shapes Brazil’s image of ethanol through actions by the public sector, before international media, various countries**, and international organizations. The strategy also aims to involve the sugarcane industry associations actively in **the formulation of public policies related to this industry, as well as in discussions concerning market access and the recognition of biofuels. In addition to benefiting the more than 100 companies affiliated with the sugarcane industry association as well as companies in other parts of the country in this sector, this strategy also brings advantages to the production chain for sugarcane ethanol, including research institutions in the field of bioenergy, providers of equipment and manufacturing services, sugarcane producers, traders, industrial enterprises, and service industries. Currently, Brazil has 7 million hectares of sugarcane plantations, accounting for nearly 2% of its arable land, making it the world’s largest producer of sugarcane. The main sugarcane-growing regions are in Brazil’s southeast, central-west, south, and northeast, where two harvests can be obtained per year. Therefore, Brazil can produce sugar and ethanol throughout the year for export to both domestic and international markets. São Paulo State is the most important producer of sugarcane in Brazil. When driving away from São Paulo city into this state, one can see vast stretches of sugarcane fields that sometimes take hours to traverse. During the 2007–2008 harvest season, Brazil produced 14.3 billion liters of ethanol, 25.9 million tons of sucrose, and 493 million tons of sugarcane; it also exported 3.6 billion liters of ethanol. Currently, the average share of bioenergy in the global energy consumption structure is 13.6%; in developed countries it is only 6% on average, while Brazil has exceeded 40% (including bioenergies such as ethanol and biodiesel, as well as other renewable energies like hydroelectric power), thus holding a leading position in the world. Brazil has developed new varieties of early-maturing sugarcane using genetic technology, which has extended the sugarcane harvesting period and thus improved the utilization rate of distillery equipment; the operating period has increased from six to seven months per year in the past to 10 months now. Currently, sugarcane ethanol accounts for almost 40% of the fuel used in light vehicles in Brazil. Sugarcane ethanol also has its weaknesses. While Brazil works hard to promote the advantages of sugarcane ethanol, many politicians, economists, scholars, and experts around the world have criticized the practice of using ethanol on a large scale to replace gasoline. In particular, they have voiced sharp criticism of the U.S. approach of using corn to produce ethanol as a substitute for gasoline, arguing that it is \"immoral\" to use food crops to produce fuel when there is still widespread hunger in the world, and that this is a major factor contributing to rising global food prices. Although Brazil’s ethanol is not produced from sugarcane, which can be used directly as food, the cultivation of sugarcane requires large amounts of land, inevitably leading to competition with food crops for land use, which has drawn attention. There are doubts about whether the large-scale development of bioethanol as a substitute for gasoline has more advantages or disadvantages. Brazil has its own arguments. In April of this year, during the opening ceremony of the United Nations Conference on Trade and Development in Accra, the capital of Ghana, President Lula spoke on the issue of biofuels, saying that he did not expect biofuels to provoke such strong opposition. Although Brazil has now discovered large oil reserves, it will not abandon its commitment to developing biofuels; Brazil will defend its biofuel policy. He also said, “It’s strange that many people criticize biofuels, but no one seems to criticize the rise in oil prices from $30 to $103.” In Brazil, we strive to increase both biodiesel production and food production, particularly grain production. ”Lula hopes that wealthy countries will not restrict alcohol prices, but rather oil prices. Brazil **believes that its use of sugarcane to produce alcohol has no impact on the current world food crisis, as sugarcane is not a food crop. Regarding the issue of competition between sugarcane-based ethanol energy and food crops for land, Max Savaya, head of the Sugarcane Industry Association in São Paulo, Brazil, believes that the arguments put forward by those who criticize biofuels, based on the experiences of other countries, are not applicable to Brazil. He pointed out that the development of biofuels in Brazil is vertical rather than parallel. Brazil is aiming to improve the efficiency of existing sugarcane plantations, rather than expanding their area. Furthermore, the sugarcane grown on 1%% of Brazil’s arable land could replace half of its gasoline consumption. It seems that the advantages of biofuels have not yet been universally recognized around the world; perhaps practice will show which ones are superior. But one thing is probably certain: Brazil’s model of using sugarcane ethanol fuel as a substitute for gasoline developed within Brazil’s specific context, and when considering such models, it is necessary to take one’s own specific circumstances fully into account. It is worth mentioning that Brazil is currently intensifying research on the use of sugarcane bagasse (the waste left over after sugar production or ethanol extraction) to generate energy. Furthermore, developing genetically modified sugarcane to increase its yield and sugar content is also a positive approach to saving land and improving the efficiency of sugarcane utilization.