The Ethanol Train

Jun 11, 2009 Editorial

Brazil organised a Global Ethanol Summit last week that drew a gamut of specialists, entrepreneurs, investors, elected officials and environmentalists from interested countries, not to mention President Lula and environmental spokesman ex-US President Bill Clinton.

We do not have any reports whether Guyana was represented but we hope that we were. The summit reiterated the key role that biofuels in general and ethanol in particular will play in the paradigmatic shift in fuel supplies that the world must undergo to replace fossil fuels and also to counteract global warming.
In the last three decades, Brazil has ramped up production of ethanol from sugar cane to become the second largest producer in the world behind the US. The former’s production costs, however, are fall below that of the latter – even after a subsidy of forty-five cents. One of the dominant themes of the conference was the additional fifty-four cents per gallon U.S. tariff on imported ethanol which has become a thorn in the side of U.S.-Brazil bilateral trade ties.
This tariff will also work against Caribbean ethanol producers. Heavily criticised for instigating a global food shortage in 2007, the largely inefficient U.S.-based corn ethanol agro-industry has been propped up by a series of tariffs, quotas, and subsidies.

These are obviously anti-developmental and sharply at odds with the from free trade rhetoric espoused by U.S. agencies and Washington-based international actors like the IMF and World Bank.
The “pick and choose” free trade model was consistently criticised at the summit.
At the Summit, panels and their presenters addressed problems faced as well as posed by the biofuels industry. These include the merits of new technologies, sustainable economic growth patterns throughout Latin America and Africa, equitable debt solutions for producers, the prospective reduction of climate change, and increasing market access in the US and EU. Lula’s chief of staff Roussef announced Brazil’s moves toward producing for commercial use cellulose-based (also known as second-generation) ethanol made mainly from woodchips and switchgrass.

Clinton urged Brazil not to expand ethanol production at the expense of its rainforest and asked that it share its technology with potential ethanol producers like the Dominican Republic and Haiti.
The ex-President, however, was misinformed since Brazil sugar cane (like ours) is not grown on cleared forests. In terms of sharing its technology, President Lula, on his visit to our country in 2005, offered to share that technology with us. The ball is in our court. In the last decade, Colombia has plunged ahead to become South America’s second biggest ethanol player and this year is seeking to double its production with six new plants coming on stream.

Our government has long expressed its commitment to developing our ethanol potential. Back in 2007 we had a high—level hemispheric seminar on expanding bio-energy opportunities in the Caribbean right here at the Guyana International Conference Centre.
The President of the IDB pointed out that sugar-ethanol could power half of Guyana and meet all gasoline needs as he announced that through a donation from the Government of Japan, Guyana was benefiting from an IDB-administered technical cooperation programme that will provide US$850,000 to evaluate and screen bio-energy project proposals.
Since then we have had several proposals from investors for establishing new sugar plantations to supply ethanol plants but we suspect that the present global financial meltdown might have a role in slowing their progress.

Drainage and irrigation constraints in the Canje Basin, which has been identified as potential cultivation site, will also have to be addressed. The recently announced low-carbon development strategy mentions overcoming these constraints. The Minister of Agriculture had also announced that Guysuco would be establishing a small ethanol plant –possibly as a demonstrator project – associated with one of the eight sugar plantations – but here the problems with obtaining sufficient sugarcane for the sugar operations might be holding matters up.
Be as it may, we will have to bite the bullet sooner rather than later. The ethanol train has left the station and have to get on or be left behind.

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The Ethanol Train

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