The dismantling of ethanol

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imagesToday we are witnessing the dismantling of ethanol, and it is good to remember that six years ago he was seen as the big star of the Brazilian energy policy. It was the time that President Lula announced that Brazil would be the largest producer of renewable fuels, a “Saudi Arabia Green”. But Lula's prophecy was not realized.

This is not the first major crisis that crosses the Brazilian biofuel. In the early 70, after the first oil shock, high fuel prices in the international market led Brazil to a crisis in its balance of payments.

As one of the answers, the Brazilian government launched, in 1975, o Proálcool, with the goal of reducing oil imports. The program was a complete success: the proportion of alcohol cars, totaling Otto cycle cars produced in Brazil, increased 0,46%, in 1979, to 26,8%, in 1980, reaching a ceiling 76,1% in 1986. From the oil countershock, in 1986, when the price of oil back to the levels of 1973, government abandons policies that led to the success of Proálcool, looking only for cyclical factors, and it throws away the world's largest program to produce fuel alcohol in the world.

In the early 2000, the growth of environmental awareness and the fact that gas prices have followed the trend of the international market from 1998 resurrected the alcohol as fuel, this time christening ethanol. The great novelty of this new phase was the arrival on the market of cars bicombustíveis (flex fuel), which today represent 59% of the total Brazilian fleet.

At that moment, boasted that the government itself would be the main Brazilian ethanol fuel and gasoline, the replacement. The euphoria and certainties regarding ethanol were such that the five new refineries announced by Petrobras only produce diesel and gasoline zero. The global economic crisis 2008 and subsalt changed history and ethanol was again overlooked by the government.

So that the economic crisis was only a “small wave”, government deploys a model of stimulus spending in Brazil whose flagship was the sale of motor. Besides encouraging car sales by expanding credit, the government takes control of virulent gasoline prices, which led the state to stop ganhar £ 5,6 billion 2008 a 2013.

In spite of this pricing policy irresponsible and reckless, the government struck the death ethanol when fully desonerou Petrobras to pay Cide, in June 2012. From there, ethanol has completely lost its competitiveness against gasoline. The result of this loss can be seen in reduced sales of hydrous ethanol and increasing gasoline consumption. Sales of hydrated ethanol in caíram 16 million m³, in 2009, consumption year record of biofuel, to 11 million m³, in 2013, 34% less. Whereas all the flex fuel fleet growth, of 2003 to September 2013, Fosse supplied only by hydrated ethanol, would have a potential consumer in 2013 of 40 million m³, approximately four times the current consumption.

I can understand a government policy that exempts and encourages the consumption of a dirty fuel and imported, rather than a renewable and clean, at a time when the world is increasingly aware of climate change calls?

We were wrong to kill the alcohol, we hit back with ethanol. Will we return to commit silly to let ethanol – important for the country's economy, that creates jobs and technology, contributes to the development of agribusiness, generates currency and could put Brazil at the forefront of renewable fuels – stay small, inactive in our energy matrix?

Will the current government will continue to insist on destroying the two greatest icons of the energy sector in Brazil: Petrobras and ethanol? A conferir.

*Adriano Pires is director of the Brazilian Center for Infrastructure (CBIE).

Source: The State of S.Paulo (04/05/2014)

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