Brazil challenges EU ethanol logic

By Inae Riveras

SAO PAULO (Reuters) - Brazil's ethanol industry says it could take steps to restrict cane planting in environmentally sensitive areas like the Amazon as a way to avoid future European curbs to the cane-based fuel.

But Europe should be ready to recognize cane-based ethanol's advantages over other feedstocks like wheat and corn in terms of energy efficiency, an industry top official said on Tuesday.

"Certification is an extremely important issue in Europe. And we are ready to work with Europe to see the best way to certify biofuels," said the president of the Sugar Cane Industry Union (Unica), Marcos Jank.

"We are ready to accept restrictions, for example, on the expansion (cane planting) on sensitive areas," Jank said at the Reuters Global Agriculture and Biofuel Summit in Sao Paulo.

The booming local demand for ethanol due to the growing flex-fuel cars fleet and the prospective rise in biofuel exports have encouraged a heavy investment and expansion in cane planting in Brazil's center-south in the recent years.

The region's cane output has more than doubled since the beginning of the decade, to around 425 million tons in 2007/08. And the expansion will likely go further, with Unica projecting the current planted area to double by 2020.

With the increase in cane planting, environmental concerns have come into focus.

The European Commission said on Tuesday the bloc is to set tougher environmental criteria for biofuels after admitting that the drive for these fuels has done unforeseen damage, like endangering rain forests in Asia and causing a rise in food prices. ID:nL14199993

"If in one way the expansion of sugar cane is a problem, and we are ready to stop this expansion into sensitive biomes, we also want EU to consider the difference of using sugar cane-based ethanol, wheat and beet ethanol," he said.

According to Unica, cane-based fuel has a higher productivity -- cane currently yields seven liters of ethanol per hectare compared with three liters with corn, for example. Cellulosic technology should widen this advantage.

Moreover, production costs are lower and energy balance is five times better. Cane ethanol yields over eight times more energy than used its production, while corn ethanol yields only 1.3 times the energy put into it. Wheat ethanol is even less efficient.

"Europe, for example is trying to subsidize their farmers to produce ethanol from beet and wheat instead of buying cheaper ethanol from abroad, instead of considering comparative advantages. The same happens in the United States," Jank said.

"Some countries are trying to solve a world problem, which is global warming and climate change, just with national solutions."

SIDE EFFECTS

But a certification program would hardly include the effect of the expansion of cane fields on areas which were previously used to grow grains or cattle and has forced these activities to move into sensitive regions in the Amazon biome.  Continued...