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March 31, 2011

The sweet sell on Brazilian ethanol

IATP is leading a delegation of U.S. environmentalists, academics and corn/biofuel producers down to Brazil (you can read our reports here) to learn more about the intersection of agriculture, biofuels and land use.

On our last day in Brazil, we got the hard pitch on sugar ethanol from UNICA: an association of 110 companies producing 60 percent of the country's ethanol and sugar production. UNICA has done a masterful job marketing sugarcane ethanol as the cleanest, lowest carbon fuel in the world—garnering a 2009 Bulldog Public Relations Award for their efforts. But our discussion was more than just a flashy powerpoint, there was a lot to be impressed by as well.

Brazil is the largest sugarcane producer in the world—and the world's second largest ethanol producer (next to the U.S.). According to UNICA, sugarcane production uses less fertilizer than corn (the primary U.S. feedstock), needs only to be replanted every six years or so, and uses a variety of integrated pest management tools to help lower pesticide use. All sugarcane mills are energy self-sufficient because they burn both the leftover stalk from the sugarcane as well as bagasse (waste leftover after the sugarcane has been processed). About two-thirds of sugarcane processing plants can switch between ethanol or sugar, depending on what that market demands.

We asked UNICA about the harsh treatment of workers at sugarcane plantations we had heard about from the Landless Rural Workers Movement earlier in our trip. UNICA pointed to a recent joint government/industry/NGO commitment on labor conditions it had made in 2009. The industry is also moving to lower the need for labor by increasing mechanization. In Sao Paulo—the largest sugarcane producing state in Brazil—all the plantations will be mechanized by 2017. What will happen to workers who formerly worked on these plantations is unclear. And there are still a lot of sugarcane plantations that operate both outside of UNICA, and outside of Sao Paulo.

On the environmental front, UNICA is pushing to reform (some would say weaken) Brazil's Forest Code, which prohibits agricultural expansion into protected areas and requires landowners to set aside 35 percent of their land for forests. The Forest Code is currently being debated in Brazil's legislature. UNICA claims that 90 percent of producers don't comply and meeting the code's requirements is burdensome and nearly impossible. While UNICA does not see sugar production directly extending into forests, they do hope to expand into pasture land, which could be affected by the Forest Code.

Currently, 80 percent of Brazilian ethanol is used domestically, aided by a mandatory blending requirement and the growth of the country's flex-fuel vehicles. But a major UNICA priority is to expand trade and "consolidate ethanol as a global commodity," including knocking down ethanol tariffs in the U.S. and EU. This emphasis on an international market differs from the U.S. farmer cooperative members that were on our trip. In a strange turn that we didn't get fully explained, Brazil actually imported U.S. ethanol earlier this month.

After nine days in Brazil, meeting with farmers, academics and NGOs, our group was well-armed with questions. But in the end, UNICA gave us a lot more to think about on biofuels and land use as we said our goodbyes and began our 10-hour flight back to the U.S.

Ben Lilliston

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