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BRAZIL: Sugarcane Alcohol Tarnished by U.S. Maize Ethanol

Mario Osava

RIO DE JANEIRO, May 9 2008 (IPS) - Recent efforts by President Luiz Inácio Lula da Silva to clearly mark the difference between Brazilian ethanol and the agrofuels produced by the United States are an admission that signing an agreement with Washington to promote a global bioethanol market was a serious political mistake, say analysts.

Brazilian fuel alcohol, distilled from sugarcane, has been used as a partial substitute for gasoline in the country for 30 years, and makes an acknowledged contribution to mitigating global warming because it emits less greenhouse gases than fossil fuels.

However, in recent months a flood of criticism has engulfed all biofuels, because of their role in helping to drive up food prices. Jean Ziegler, former United Nations special rapporteur on the right to food, called the conversion of food crops into biofuels "a crime against humanity."

A memorandum of understanding, signed in March 2007, for cooperation between Brazil and the United States in promoting ethanol production in tropical countries, as well as technology transfer and definition of technical standards, united the biofuels of both countries in terms of their international image.

Negative global perceptions of President George W. Bush and his government’s war in Iraq may have contributed to the unpopularity of U.S. ethanol, with Brazil’s alcohol being tarred with the same brush.

In January 2007, Bush announced a bold plan to cut gasoline consumption by 20 percent in the United States within 10 years, through the use of substitutes, mainly ethanol.

Dire food shortages that began last year have sparked violent protests in dozens of poor countries, and have led to widespread accusations that ethanol and biodiesel are worsening the food crisis.

Previously such allegations had only been made by environmentalists and political leaders like Cuban President Fidel Castro and Venezuelan President Hugo Chávez.

On a visit to Ghana last month, where Brazil is providing technological support for ethanol projects, Lula said that the only mistake in the promotion of biofuels was "the U.S. decision to produce alcohol from maize." Since then he has constantly underlined the differences between the Brazilian and U.S. ethanol programmes.

Brazilian ethanol, referred to as alcohol, is derived from sugarcane as part of a process that is much more efficient at reducing greenhouse gas emissions, and much cheaper, than producing it from maize. The U.S. market has not been flooded with alcohol from Brazil thanks to high tariff barriers and subsidies that cut the cost of local ethanol for consumers.

The agreement with the United States was a mistake, according to a growing chorus of Brazilian analysts and members of the business community, such as Rubens Ricúpero, former finance minister and ex secretary-general of the U.N. Conference on Trade and Development (UNCTAD).

But others disagree. "I don’t think the memorandum of understanding between Brazil and the United States can be blamed for the criticism of Brazilian alcohol," countered André Nassar, head of the Institute for International Trade Negotiations (ICONE).

It is inevitable that public opinion should find it difficult to distinguish between Brazilian and U.S. ethanol, even without the explicit alliance between the two countries, which is limited to technical issues, cooperation and investment in third countries, Nassar told IPS.

"The main problem is the model implemented by the United States," he said.

The impact of maize ethanol on food prices would be much lower without the high tariffs and the subsidies which protect U.S. production, and many people are already able to discern the difference between Brazilian and U.S. ethanol, so that it is just "a matter of time," Nassar said.

"It was a mistake, but not an irreversible one," according to Roberto Kishinami, an expert in renewable energies and an adviser to the Environment Ministry. Nevertheless, restoring the prestige of Brazilian alcohol "will be a Herculean task," he told IPS.

Brazil must "create a brand identity" for its alcohol, because the sugarcane sector is also poisoned by the negative image of its colonial and slave-owning past, and by present-day sugar mill owners who continue their illegal practices, violating the rights of their workers and damaging the environment, said Kishinami, formerly the head of Greenpeace Brazil.

The creation of that brand identity must involve distancing the fuel from the image of the sugar mill owners and adopting exemplary labour relations and social and environmental responsibility in its production, he said.

The entire production chain should benefit from the huge profits resulting from the fact that producing alcohol in Brazil costs less than half the price of gasoline, Kishinami said.

Sugarcane alcohol will continue to cost less than ethanol derived from cellulose, regarded as a second generation biofuel. The technology to improve cellulose ethanol feasibility is being developed mainly in the United States, but also in Brazil, he said.

There is no doubt that sugarcane ethanol is better than maize ethanol from the environmental point of view, because maize ethanol produces nearly the same amount of greenhouse gas emissions as gasoline, while if sugarcane is used, 87 percent of these greenhouse gases are avoided, he said.

U.S. ethanol is less efficient and caused food prices to skyrocket, but Brazilian alcohol "is not entirely innocent" and has also contributed to the problem, University of Brasilia professor of international relations Argemiro Procópio told IPS.

"Ziegler is right," because sugarcane has also displaced crops like rice, beans and soybeans, exerting pressure to expand the agricultural frontier and indirectly exacerbating deforestation of the Amazon jungle, said Procópio, the author of "Subdesenvolvimento sustentável" (Sustainable Underdevelopment), a recent book on this and other problems ailing Brazil.

According to Procópio, promoting ethanol on a global scale has tarnished Lula’s shining reputation, earned when he began his presidential term in 2003 with a "brilliant" campaign against hunger in Brazil and in the world.