Privacy Policy | Gulf UAE Group
 
  Ethanol Fuel  
Since 2005, ethanol prices have been very competitive without subsidies, even with gasoline prices kept constant in local currency since 2005, at a time when oil was just approaching US$60 a barrel. However, Brazilian gasoline taxes are high, around 54%, while ethanol fuel taxes are lower and vary from 12% to 30%, depending of the state. As of October 2008 the average price of E25 gasoline was $4.39 per gallon while the average price for ethanol was USD 2.69 per gallon. 
 
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This differential in taxation favors ethanol fuel consumption, and by the end of July 2008, when oil prices were close to its latest peak and the Brazilian real exchange rate to the US dollar was close to its most recent minimum, the average gasoline retail price at the pump in Brazil reached USD 6.00 per gallon. The price ratio between gasoline and ethanol fuel has been well above 30% during this period for most states, except during low sugar cane supply between harvests and for states located far away from the ethanol production centers. According to Brazilian producers, ethanol can remain competitive if the price of oil does not fall below USD 30 a barrel.

By 2008 consumption of ethanol fuel by the Brazilian fleet of light vehicles, as pure ethanol and in gasohol, is replacing gasoline at the rate of about 27,000 cubic meters per day, and by February 2008 the combined consumption of anhydrous and hydrated ethanol fuel surpassed 50% of the fuel that would be needed to run the light vehicle fleet on pure gasoline alone. Monthly consumption of anhydrous ethanol for the mandatory E25 blend, together with hydrous ethanol used by flex vehicles, reached 1.432 billion liters, while pure gasoline consumption was 1.411 billion liters. Despite this volumetric parity, when expressed in terms of energy equivalent (toe), sugarcane ethanol represented 17.6% of the country's total energy consumption by the transport sector in 2008, while gasoline represented 23.3% and diesel 49.2%.


For the first time since 2003 sales of hydrous ethanol fell in 2010, with a decrease of 8.5% as compared to 2009. Total consumption of both hydrous and anhydrous ethanol fell by 2.9% while gasoline consumption increased by 17.5%. Despite the reduction in ethanol consumption, total ethanol sales reached 22.2 billion liters while pure gasoline consumption was 22.7 billion liters, keeping the market share for each fuel close to 50%. The decrease in hydrous ethanol consumption was due mainly to high sugar prices in the international markets, which reached a 30 year high in 2010. This peak in sugar prices caused sugarcane processing plants to produce more sugar than ethanol, and as supply contracted, E100 prices increased to the point that several times during 2010 the price of hydrous ethanol was less than 30% cheaper than gasoline. Another factor that contributed to this shift was the increase sales of imported gasoline only vehicles that took place during 2010.

 
       
 
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History

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Production

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Production process

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Agricultural Technology

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  Milling & Refining
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Overall Energy Use

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  Prices and effect on oil consumption
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Comparison with the United States

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Environmental & Social Impacts

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  Concerns