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BUSINESS FEATURE NATURE|Vol 444|7 December 2006

Drink the best and drive the rest

Brazil’s sugar-cane ethanol industry is the world’s best and able to get better, says Emma Marris.
n Brazil, alcohol made from sugar cane is

mixed with lime juice and a little of the cane
sugar itself to make caipirinhas — and it’s a
fine way to get the weekend off to a flying
start. But come Monday morning, sober Brazil-
ian commuters are still using cane liquor — in
their fuel tanks. Most Brazilian petrol is gasohol,
which by government mandate is currently 23%
ethanol. Next to the gasohol pumps at the petrol
stations are pumps that offer pure ethanol.
Ethanol from sugar cane has been power-
ing cars in Brazil on and off since the 1930s,
and with government backing since the OPEC
price rises in the 1970s. It makes fairly obvi-
ous sense. Brazil’s tropical sun makes it a great
place for growing sugar cane: it is the largest
cane producer in the world, producing more
than twice as much as the number two, India.
Just crush out the sucrose solution, ferment it
into alcohol with the help of yeast and distill it
to the desired concentration; burn the ‘bagasse’
— the fibrous pulp left over when the sugar is
squeezed from the cane — to power the process
along. Put the alcohol into your gas tank and
you are effectively driving it on sunlight.
In the past few years, Brazil’s bioethanol Cleaning up: Brazil’s use of sugar cane, here being washed for refining, significantly reduces CO2 emissions.
industry has sprouted new wings thanks to
higher petrol prices and ‘flex-fuel’ cars, which lion jobs, in a country with an unemployment machinery in the sugar-cane industry1. He and
can sense different mixtures of petrol and rate of 10%. Some bagasse-powered mills sell his colleagues estimate that the whole shebang
ethanol and adjust their workings accord- surplus power back to the grid. And although costs about 250,000 kilojoules per tonne of
ingly. Introduced to the mass market in 2003, the carbon put into the atmosphere by petrol- cane. That tonne of cane in turn yields about
these cars changed everything; flex-fuel vehi- powered cars comes out of fossil reserves, the 2 million kilojoules in ethanol and surplus
cles now account for well over half of Brazil’s carbon from ethanol is carbon that was in the electricity made by burning bagasse. That’s an
new cars. Their attraction is that they allow atmosphere just a couple of years ago, before eight-fold return.
the owner to trade off continually between the sugar cane got hold of it and worked its This is a lot better than ethanol-makers in
the advantages of neat ethanol — which gives photosynthetic miracle. There are thus, in the United States manage, and the reason is
20% to 30% fewer kilometres to the litre — and principle, no net emissions. clear to anyone who’s ever strolled through a
gasohol depending on the current prices and This all sounds a bit like a free lunch, or cane field chewing on a bit of the stuff; cane
the local tax rates. (Tax alone means that if you at least a free ride, and everyone knows they is a far more prolific plant than corn (maize),
were to take a road trip across Brazil, you’d don’t exist. Growing sugar cane, harvesting it, from which the United States makes almost all
switch back and forth a couple of times as you fermenting and distilling it and then distrib- its ethanol, and it puts a great deal of its — or
crossed from state to state.) uting it is a complex business. It uses inputs rather the Sun’s — energy into making sugar.
— fuel for harvesters, nitrogen fertilizers for What’s more, sugar cane needs less by way
Sweet solution? the cane — that themselves require energy of inputs, and in the parts of Brazil where most
Flex-fuel cars have created an expanded home from elsewhere. And it has potentially dam- of it is grown at the moment it needs no irri-
market for Brazil’s ethanol, and production is aging side-effects, such as soil erosion and the gation. It needs only to be ploughed up and
up. The country produced 282,000 barrels (45 emission of nitrous oxide, a greenhouse gas, replanted every five years; between times it
million litres) a day in 2005, up from 192,000 in from farmland. Taking all the complexities can be cropped repeatedly and will simply
2001. The ministry of agriculture is projecting into account, is ethanol still as good a deal as grow back, although the yields drop a bit with
442,000 barrels a day by 2010. Oil is still very it seems? And if it is, how much of this good each harvest. For all these reasons, sugar-cane
much ethanol’s big brother, and in the first part thing can Brazil — and the rest of the world ethanol is also currently the cheapest ethanol
of 2006 the country was producing an average — get its hands on? to produce in the world. A litre costs about 25
of more than 2 million barrels a day while con- In 2004, Isaias de Carvalho Macedo at the cents to make. The commodity price for anhy-
suming a bit more. But 40% of the fuel power- University of Campinas did a study for the state drous ethanol (the kind mixed into gasohol) is
ing Brazil’s cars is home-grown ethanol. The of São Paulo that considered energy inputs about 27 cents.
sugar cane industry supports more than a mil- such as fertilizer manufacture and agricultural Because of this a lot of money is pouring
©2006 Nature Publishing Group
NATURE|Vol 444|7 December 2006 BUSINESS FEATURE


into the centre-south region of Brazil, where such as liquid waste and smoke from

the sugar cane grows best. But that does not burning fields to take into account. Last
necessarily mean that investors believe Brazil- year, a paper by a group at Washington
ian cane ethanol is sure to become the planet’s State University in Richland made head-
biofuel of choice. A range of other emerging lines by claiming that in this broadest per-
liquid-fuel technologies, including biodiesel, spective, Brazil’s ethanol was bad for the
butanol, coal to liquid, and the buzz leader at environment2.
the moment, cellulosic ethanol (see page 673), This result, though, is disputed — and the
are attracting investment around the world, industry seems to be getting greener as it goes
too. And the investors are typically backing hunting for efficiency gains. As Christopher
a range of possibilities while they wait to see Flavin, an analyst at the World Watch Insti-
how the market pans out. tute, a green pressure group in Washington
Arnaldo Vieira de Carvalho, an energy spe- D
CLIMATE UCT: Ethanol (fro DC, points out, expansion will generally mean
: Tropical m sugar)
cialist at the Inter-American Development ANNUAL
, subtrop
ical that a higher percentage of the industry will be
Bank in Washington DC, sees current invest- GREENH ,300–6,5 using newer, cleaner technology (although by
OUSE GA 00 litres –1
87–96% S SAVIN ha
ment in bioethanol as, among other things, CONSID
(vs petro
GS: the same token it will also be offering fewer
a way of building up a better stake today ERATION unskilled distillery jobs). The leftovers from
crop resi S:
due power In newer facilities,
for whatever the most impressive biofuel adds pow
er to grid
s fuel pro
duction an distillation, once commonly thrown into riv-
technology turns out to be tomorrow. “If d ers, are now often spread on fields as potassium
you now put your money in distilleries, in fertilizer. Field burning, which by scorching the
five years you have made your money,” says de still the biggest cane makes it easier to harvest with machetes,
Carvalho, “and then you put your investment player in Brazilian oil, is plan- is decreasing both as a result of legislation and
in the technology that is coming.” ning to build an ethanol pipeline from the the increased use of mechanized harvesters.
centre to the south, out to the ports. It will be “Thirty-five per cent of cane harvesting is
Fuelling change the first of its kind. Pipelines for ethanol have already mechanized,” says Nastari, “and it will
As the rest of the world gets interested in etha- long been considered problematic, as it tends increase,” although because the machines work
nol, both as a fuel in its own right and as a fuel to absorb moisture and impurities as it flows. only on very flat land some burning is likely to
additive (to replace methyl tertiary-butyl ether, Construction will start in January, according continue. Research on planting methods that
or MTBE, an anti-knocking additive that is on to Plinio Mario Nastari, president of Datagro involve less or no tilling should lead to reduced
its way out for environmental reasons), Brazil in São Paulo. erosion, too.
is ramping up exports (see ‘Key companies). Not all foreign markets are easily tapped. Perhaps the biggest environmental worry
Brazilian manufacturers are actively promot- Increasing Brazilian ethanol imports to the is that expanding ethanol production will lay
ing ethanol distribution systems in other United States led the United States to slap waste to natural forests in its path, reducing
countries. Petrobras, until the 1990s the on a tariff of 14 cents per litre (54 cents per biodiversity and releasing stored up carbon.
state oil monopoly and gallon), to protect its highly subsidized corn The first thing to remember on this
ethanol makers. One effect of this has been
to put Jeb Bush, Florida’s governor, at odds
PA L M with his brother President George W. Bush; CA SS AVA
the governor would rather buy cheap ethanol
from Latin America than expensive stuff from
the Midwest.
Environmentalists are watching all this
expansion carefully. The Macedo analysis sug-
gests that a tonne of cane used as ethanol fuel
represents net avoided emissions equivalent
to 220.5 kilograms of carbon dioxide when
compared with petroleum with the same
energy content. The team extrapolates that
ethanol use in Brazil reduces greenhouse-
gas emissions by the equivalent of 25.8 mil-
lion tonnes of carbon dioxide equivalent a
year. For comparison, Brazil’s total carbon
dioxide emissions from fossil fuels is 92
l (from fr million tonnes a year, according to the
D U C T: Biodiese FUEL PRODUCT: Eth
FUEL PR tropical ha–1 US Department of Energy. The improve- anol (from starch)
E: Humid 00 litres CLIMATE: Tropical,
CLIMAT IELD: 5,000–6,0 : ment is thus substantial, if not out-of- subtropical
No data tations But there are environmental worries No data
NS: Plan
ERATIO forest ra
CONSID o p ic a l that go along with the ethanol industry : Most cultivated
om tr crop in sub-Saharan
carved fr tal concerns too: as well as fertilizer and fuel use, Africa
there are also pesticides and pollutants
©2006 Nature Publishing Group
BUSINESS FEATURE NATURE|Vol 444|7 December 2006

Key companies
Cosan, based in São Paulo, is the largest
sugar-cane producer in the world, and the
second-largest producer of ethanol. It has
been gobbling up smaller ethanol mills right,
left and centre, which has given it a very
respectable growth curve. In the 2005–06
crop season, it reported revenues of US$1.1
billion and produced about 8.7 million barrels
of ethanol. Cosan went public in November
of 2005 at about $19 a share, and prices were
close to $60 this summer.

Copersucar, a cooperative of sugar and

ethanol mills, was founded in 1959. In the
2005–06 crop season, its revenues were
$2.1 billion, and it produced 23 million barrels
of alcohol.
Interior designs: some of Brazil’s Cerrado region could be cleared for sugar-cane plantations.

front, say the Brazilians, is that Brazil is big. It is areas, even if that was what anyone wanted. them can be grown in the Amazon — cotton,

big enough to expand its sugar-cane fields mas- In this respect, cane is more environmentally soya, livestock”. Some of that soya could be for
sively without either displacing necessary food friendly than palm oil, the most energy-inten- biodiesel use.
crops or getting anywhere near the rainforest sive source of biodiesel. Palm-oil plantations Alex Farrell, head of the Energy and
that the rest of the world seems to have decided for biofuel are having serious effects on the Resources Group at the University of Califor-
is international property. São Paulo state itself primary forests of Indonesia, but are not as yet nia, Berkeley, adds that for all the enthusiasm
is as big as the United Kingdom. Although Bra- big business in Brazil. there is still a dearth of evidence on the long-
zil is already by far the largest producer of sugar Overall, the environmental problems with term sustainability or otherwise of cane farm-
cane in the world, sugar cane is only its fourth cane production, says Flavin, are “dwarfed by ing. But, he adds, that is pretty much par for
biggest commodity, in terms of revenue, with the land use issues posed by soyabeans and the agricultural course: “All around the world,
cattle, chicken and soya all bringing in more cattle”. But they may get worse — or exacer- every government has agriculture — they
money. The limiting factor in expansion is bate the problems elsewhere in agribusiness. never ask ‘is this agriculture sustainable?’ Not
capital rather than land. Jason Clay of environmental group the WWF for sugarcane, not for rutabagas.”
points out that “the push of sugar cane is going To replace a tenth of today’s global petrol
Growth area to displace other crops, and some of production, Brazil’s ethanol production would
According to Nastari, cane fields account for just have to grow by a factor of 40 or so. Few see
5.7 million hectares in a country of 850 that as likely in itself. Even Unica’s de Carvalho,
million hectares. There are already 100 CO RN EA RS who is undeniably bullish, sees only a doubling
million hectares of old agricultural land or by 2014, though he does not see that as the end
pasture land in the centre-south available of the story. Enthusiasts for new cane varieties
for the industry to expand into. Eduardo talk of doubling the yield per hectare, but not
Pereira de Carvalho, president of Unica, necessarily going much further.
the union of cane-growers in São Paulo, But a doubling or two is not to be sniffed
welcomes such expansion with open arms: at, and there is increasing interest in spreading
“As for conflict between food and energy, the techniques developed in this most cane-
the fantastic increase in productivity has friendly of countries to others in Latin America
made all these Malthusian arguments com- and elsewhere, with the details changed to fit
pletely nonsense, and we have hundreds of local conditions. Already, ethanol is becoming
millions of hectares of idle land.” a large enough business for the price of sugar
Expansion into at least some of those mil- on world markets to respond to changes in the
lions of hectares would probably be more oil markets — so the price of your caipirinha
or less carbon-neutral, says Robert Boddey, is now, in a very small way, susceptible to the
a soil chemist at Embrapa, the Brazilian manoeuvres of OPEC. ■
agricultural research unit. “For degraded Emma Marris is a reporter for Nature based
pastures, which are slowly losing carbon, it Ethanol (from sta in Washington DC.
is not such a bad change. And almost 70% erate
CLIMATE: Temp es ha–1
: 3,100–3,900 litr 1. Macedo, I. et al. Assessment of Greenhouse Gas Emissions in
of the Cerrado [Latin America’s savanna, ANNUAL YIELD NG S:
AS SAVI the Production and Use of Fuel Ethanol in Brazil (prepared for
of which Brazil has some 200 million hec- GREENHOUSE-G the Government of the State of São Paulo) (March 2004).
10–20% (vs petro

tares] has already been cleared.” Because it NS: 2. Dias de Oliveira, M. E., Vaughan, B. E. & Rykiel, E. J.
d agricultural inp Bioscience 55, 593–602 (2005).
needs a dry season, sugar cane would not be High fertilizer an
a good crop to move into cleared rainforest See Editorial, page 654.

©2006 Nature Publishing Group