Biofuel on the News

Wednesday, March 14, 2007

Brazil Plans to Triple Ethanol Exports in 7 Years

By Shigeru Sato and Hector Forster
March 14, 2007 02:46 EDT -

Brazil plans to almost triple ethanol exports in the next seven years and will need investments of about $13.4 billion to boost output, said the nation's Agriculture Minister Luis Carlos Guedes Pinto.

Brazil plans to more than double production of ethanol to 35 billion liters, Guedes said via a translator in an interview with Bloomberg News in Tokyo. Exports may account for as much as 10 billion liters, he said.

Brazilian President Luiz Inacio Lula da Silva's government is boosting exports of biofuels, made from sugar cane and soybeans, to help the nation expand crops output and discourage poor farmers from migrating to cities. Japan, under pressure to set out decisive measures and cut emissions of greenhouse gases, will expand use of environmentally friendly fuel.

Brazil expects to build 89 new ethanol production plants in the next seven years, Guedes said. The nation's sugar cane output may rise to 627 million tons from 427 million tons during the next 7 years, he said.

In a meeting with Japanese business leaders in Brasilia on March 7, Guedes said that the South American nation can ensure supply to Japan should the Asian country mandate gasoline containing 3 percent of the biofuel.

Ethanol for Japan

Nippon Oil Corp., Japan's biggest oil refiner, and domestic rivals plan next month to start test-sales of gasoline blended with ethyl tertiary butyl ether, a fuel additive made from crop- produced ethanol and the chemical isobutylene.

Brazil needs to sign medium- and long-term supply contracts with Japan, in order for the South American nation to export ethanol to the Asian country, Guedes said. Before starting exports of the fuel, an ethanol plant project requires a three- year lead time to grow sugarcane for the new plant.

Guedes stressed Japan and Brazil should cooperate and help Southeast Asian countries embark on projects to produce ethanol for automotive fuel, and diversify supply sources of the biofuel in the global market.

Prime Minister Shinzo Abe's government plans to boost the country's ethanol use to 500,000 kiloliters (3.1 million barrels) in 2010, as part of efforts to achieve an emissions reductions target set under the Kyoto Protocol. Under the accord, Japan pledged to cut greenhouse gases 6 percent by 2012 from 1990 levels to help combat climate change.

In fiscal year ended March 31, 2006, Japan emitted 8.1 percent more greenhouse gases including carbon dioxide than it did in 1990, according to the environment ministry.

Talks with Itochu

During his three-day visit to Tokyo, Guedes met with executives of Itochu Corp., Japan's fourth-largest trading company, to exchange views on ethanol businesses, he said at a press conference after the interview with Bloomberg News, without elaborating.

Itochu and Indonesian partner PT Molindo Raya may start producing ethanol from two proposed plants in the Southeast Asian nation in the second half of next year. The plants in Lampung at the northern tip of Sumatra and Pacitan in East Java province will start production in the third and fourth quarters of 2008, Alhilal Hamdi, head of a government team promoting biofuel, said by telephone yesterday.

Itochu will complete a feasibility study to build ethanol plants in Indonesia and Thailand by the year-end before deciding to go ahead with the projects, spokesman Masahide Kitagawa said on March 12.

Guedes is due to leave Tokyo today, and heads for Jakarta to hold a seminar on biofuel, he said. Earlier this week, the minister had a meeting with Japan's Agriculture Minister Toshikatsu Matsuoka and discussed issues related to bioethanol and livestock trade.

Originally posted on Bloomberg (

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