U.S. ethanol proponents say Brazil is leading the way in integrated model for fuel infrastructure
Brazil and the United States dominate the global markets as the largest producers of biofuel. In 2017 Brazil and the U.S. accounted for 84 percent of global biofuel production, according to the International Energy Agency (IEA).
But even though the United States has the lead over Brazil in production, Brazil is decades ahead of the U.S. in delivering higher blends to consumers through an integrated model for fuel infrastructure. It’s a model that ethanol proponents would like to see in the United States.
A 1979 law established dedicated ethanol pumps as a way to reduce the country’s dependence on foreign oil. Now, more than four decades later, those ethanol pumps are still in place and are bringing benefits to Brazil and its citizens beyond energy independence.
Because of this, every car on the road in Brazil today runs on at least 27 percent ethanol — the minimum amount of ethanol available at the pump. Consumers have two choices at the pump: either E27, which is a biofuel blend with 27 percent ethanol, or E100, which is 100 percent ethanol.
Today, this distribution model offers benefits to consumers and the environment at large, since more consumers are filling up with a cleaner, low-carbon fuel. Brazilian citizens interact with ethanol on a daily basis, says Dr. Evandro Gussi, CEO of UNICA, the Brazilian Sugarcane Industry Association. UNICA advocates on behalf of ethanol made from sugarcane, which is the primary feedstock for ethanol production in Brazil. It’s important to note that ethanol is ethanol regardless of the feedstock used to produce the molecule.
U.S. ethanol proponents say Brazil’s ethanol retail infrastructure offers a model for the U.S.
Moving to offering higher blends — even beyond E15 — at more retail stations in the U.S. would bring even greater benefits to farmers, consumers and the environment at large.
“Offerings above E15 are important for several reasons,” says Craig Willis, Senior Vice President of Global Markets at Growth Energy, the biofuels industry’s largest trade association. “Corn farmers are currently experiencing low corn prices. Higher-level blends are the only solution I see to utilize the ever-larger crops farmers are expected to produce in the future. Higher-level blends are better for the environment, and lastly price. Ethanol has been consistently proven to lower gasoline prices to the consumer.”
That Brazil’s passenger fleet runs on a minimum of E27 also debunks the argument that the U.S. passenger fleet couldn’t efficiently run on higher blends beyond E10, notes Marc Rauch, automotive expert and co-founder of The Auto Channel. “They run on E27 as their standard fuel. They are running basically all the same vehicles as we have,” he said.
While Brazil has a greater percentage of flex-fuel vehicles compared to the U.S. — 72 percent compared to 10 percent in the U.S. — flex-fuel and non-flex-fuel vehicles are nearly identical. The difference is not in the engine or parts but in the computer system and certification process. Rauch notes. The computer system in a flex-fuel vehicle (FFV) is programmed to detect the type of fuel and adjusts the engine timing and fuel flow to compensate for the higher octane.
The set-up of Brazil’s industry also helps with supply and demand for the ethanol industry — not to mention providing consumers the choice to fill up with a cleaner, higher-performing and more affordable choice at the pump.
“The fact that every retail station in Brazil sells E100 provides a great relief valve for the ethanol industry in times of ethanol oversupply or, on the flip side, a great alternate during gasoline shortages,” Willis says. “Consumers can make the choice to fill up with either E27 or E100, based on what the market is telling them to do, and the Brazilians have become quite adept at making that calculation and choice.”
Gussi discusses the retail pump infrastructure and biofuel growth in Brazil.
QUESTION: Could you talk about the history of the ethanol retail infrastructure in Brazil and how it’s changed?
ANSWER: The retail infrastructure for ethanol was put in place when the Brazilian government created the Pro-Alcohol program in 1979, in an attempt to reduce the country’s dependency on foreign oil. The law established that every fueling station in Brazil would have to have at least one ethanol-dedicated pump. Nowadays, fueling stations in Brazil will dispense gasoline, ethanol and diesel.
Q: How do consumers dial in/select their level of ethanol at the pump?
A: Differently from the United States, Brazilian pumps are not blender pumps. Consumers may not customize their blend level. They have two choices at the pump: either Gasoline C (E27) or ethanol (E100). It is important to clarify that every and each car in Brazil will run on E27. FFVs, which compose 72 percent of the Brazilian fleet today (more than 30 million cars and motorcycles), can use E100 or E27 or any mix of these two fuels.
Q: What drives ethanol infrastructure in Brazil? Is it different than in the U.S.?
A: The law established that fueling stations had dedicated ethanol pumps. These pumps have been around for four decades; ethanol use is part of the daily life of Brazilians.
Q: Do you see biofuel growth in the U.S. overall as a positive aspect for biofuel growth in Brazil?
A: We believe biofuel growth is positive wherever it occurs. Replacing a dirtier fuel with a clean, renewable and low-carbon alternative is always a positive and a much-needed solution to the planet’s climate crisis. As the largest biofuel producers in the world, I believe Brazil and U.S. should work together to incentivize more countries produce and adopt biofuels in their energy matrix.
Q: Is there a growing trend of sugarcane plants bolting on to corn plants to increase production?
A: I’ll tell you what we know now: We have eight mills producing corn ethanol in Brazil nowadays. Seven of them are considered flex mills, processing both sugarcane and corn; one is a dedicated corn mill. Corn ethanol production in Brazil is attending a region-specific demand, as it is concentrated in the states of Mato Grosso (75 percent) and Goais (25 percent), states known for their grain production in Brazil.