The golden days of Brazilian ethanol production is waning, despite investment of billions of dollars on transforming sugar cane into ethanol, the Washington Post reports. What makes this even stranger is that many of the cars in Brazil are designed to use biofuel.
With a potentially big export market of China and the United States, the plan was to construct an 800-mile route of river barges and pipelines to funnel billions of gallons from central Brazil to Atlantic Ocean ports. However, despite those advances, the ethanol industry has been in a downward spiral, partly attributed to natural disasters in the form of heavy rains and drought.
Adding to that is a diminishing demand for ethanol in America, with the U.S. Midwest churning out inexpensive oil and gas from shale. Even Brazil has discovered hitherto unknown deposits of oil in its offshore waters. Then the Brazilian government greatly reduced gasoline taxes, lowering pump prices to below ethanol.
“The scenario that we had a half-decade ago is not what we have anymore,” said Mauricio Muruci, an ethanol analyst in Brazil. “We are not thinking about ethanol in our future. We are thinking about pre-salt oil and shale gas.”
Brazil has been attempting to ditch gasoline on a wholesale level since for four decades. This century, the country debuted fuel-flex cars that could take gasoline or ethanol.
Nowadays, 64% of the cars on the road can fill up with ethanol or gasoline. “This was the biggest project in the world to replace a fossil fuel with a renewable fuel,” said Adhemar Altieri of the Brazil Sugarcane Industry Association.
