Overview

The world's energy source has evolved from timber to coal and to oil, but we are now on the verge of an energy revolution. This is likely to have as much impact as the agricultural revolution, the industrial revolution or more recently the revolution in information technology.

This revolution has been caused by two opposing forces:

Ethanol from sugar cane is a simple solution to replacing the oil used for gasoline to run motor vehicles. Sugar cane derived ethanol is agricultural, renewable and clean.

Yes, it is possible to run your car on ethanol - Henry Ford first designed his cars to run on ethanol and they have been doing this in Brazil for the last 30 years. Today, a simple chip inserted into the fuel management system of the car can convert the car into a flex fuel vehicle capable of running on any mix of gasoline or ethanol depending on what is available.

The challenge is to reduce greenhouse gases such as carbon dioxide and at the same time produce more energy. Today in the USA there are 800 cars for every 1,000 people. Contrast this with China where the number is 8. Economic growth in China and elsewhere will expect to increase demand for road fuel - this fuel cannot be gasoline if we are going to address climate change and manage our oil reserves.

Energy emanates from the sun, and it is logical that the low cost solution to convert this into useable forms of energy is to be found in sunny climates such as Brazil. In Brazil sugar cane ethanol can be produced at around $40 per barrel of oil equivalent, it costs twice as much to produce in Europe, and one and a half times as much to produce in the US.

Brazil's climate also gives it an advantage over other sugar cane producers. Brazil has a harvest season (and consequently industrial capacity utilisation) of 9 months of the year compared to Australia's 5 months or European sugar beet of only 3 months.

Sugar cane based ethanol is an energy self sufficient process. After the juice is squeezed from the cane, the cane is then used to fire boilers that generate the factory's own energy requirements. All other forms of ethanol produced around the world are energy dependent using some other form of energy (often hydrocarbon) to run the processing plants.

Brazilian sugar cane ethanol is produced in a stable democratic country with a moderate climate. Oil is produced in many of the harshest places on earth - climatically, politically and culturally.

Brazil has space and available land to increase ethanol production many times over. Whilst it currently meets 40% of its domestic car fuel requirements on 6m hectares of land, there is a further 90m hectares available, enough to help some of the other countries of the world to meet their contribution to avoiding catastrophic climate change. This does not necessitate cutting down the Amazon rain forest or planting in other ecologically important habitats. Sugar cane cannot grow in the rain forest. The plant makes sugar when it is under "stress" from a prolonged dry period and of course in the rain forest it rains every day!

Brazil is the lowest cost producer of ethanol and has the room to expand. Sugar cane ethanol is energy self sufficient, renewable and when used as a replacement fuel for vehicles will reduce the greenhouse gas emissions of the vehicle by around 90%.

Brazilian sugar cane ethanol is the future. The world is waking up to the new energy revolution, and nowhere else on earth can supply significant volumes of ethanol at a production cost of less than $40/barrel oil equivalent.