If our country is always remembered for its happy football, its Carnival and its beautiful tropical beaches, now it is also remembered for its fantastic ethanol program. The number of inquiries from different types of companies, visits by delegations from different countries and invitations to presentations at international events prove the great interest in the success of Brazilian ethanol.
Brazil is the largest producer of sugarcane, a source of pure and renewable energy, which sweetens the world and moves the country at the same time that it contributes to the protection of the environment. Sugarcane was directly responsible for the beginning of the systematic colonization of Tupiniquin lands, in addition to providing the basic substrates for the formation of Brazilian society. The large estates, the use of slave or semi-servile labor, cachaça as a popular drink, miscegenation, religious syncretism and the agro-export economy left definitive marks in our history.
That's right, the history of Brazil is intertwined with that of sugarcane and, now, many people have started to bet on this special moment in the activity as an excellent opportunity for the national economy. Shortly after the Discovery, we experienced some periods of glory when some products were demanded by the international market. These cycles encouraged the presence of foreigners, resulting in job creation and investment. But, in fact, very little of that generated wealth stayed here, in the hands of Brazilians. The Pau-brasil, Gold, Sugar, Rubber and Coffee cycles are some of these examples. And now with fuel ethanol? What is the difference between this new cycle and the previous ones? It is certainly the performance in all segments of the industry with total technological mastery.
In its 32 years of existence, PROÁLCOOL has stood out not only for its economic aspects, by contributing billions of dollars, but also for the generation of jobs in the various industry segments; improvement of environmental conditions; new sugarcane varieties; development and improvement of the alcohol vehicle, efficient industrial processes, techniques to transform waste into by-products with high added value, use of sugarcane bagasse to generate electricity, competence in the entire logistics chain (ducts, terminals, ships and collection centers) and thousands of filling stations in a country of continental dimensions.
It was with this motivation that Brazil became a world reference in the use of renewables. Currently, not counting the 3.5 million vehicles that consume only hydrated alcohol, each liter of gasoline consumed by Brazilians has 25% of anhydrous alcohol. This was the solution found to solve the gasoline octane rating problem, replacing tetraethyl lead in the gasoline-alcohol mixture, which came to be accepted and used practically all over the world. It is yet another example of Brazilian technological innovation in the sector. All this success had the participation of the Sugarcane Technology Center (formerly Copersucar) and the ESALQ University, linked to USP, both located in Piracicaba (SP).
The recent increases and fluctuations in oil prices, the environmental demand for cleaner fuels, the search for energy alternatives for vehicles in oil-dependent countries, flex-fuel technology, the similarity of ethanol to gasoline and the successful experience in Brazil of a large fuel alcohol program contribute to a fully favorable scenario for ethanol to become the great partner of gasoline in the next 30 years.
There are actions that are fundamental so that our country does not miss this opportunity anymore and guarantees a true leadership in this fantastic fuel ethanol market, they are: 1) guarantee of an increase in the national production of fuel ethanol through special financing programs for new units energy added to the lines of credit for the agricultural activity of sugarcane, with agility in the processes of environmental licensing with the governmental entities; 2) investment in logistics for the entire production chain, with the participation of the various segments of the sector, ranging from production to the international market with the use of exclusive and dedicated pipelines for ethanol, waterways, railways, terminals in Brazil and abroad, and ships for export, thus ensuring more competitive prices in international markets; 3) creation of stocks, preferably abroad, together with potential consumers, will in fact establish the supply of the international market, reinforcing the guarantees to the export contracts and minimizing the existing strong link of the production of Brazilian ethanol to supply exclusively the domestic market; 4) creation of a large technological development program for ethanol, similar to that existing in the oil sector (CTPETRO), calling on the country's technological development centers, Brazilian universities, associations and entities in the sector; 5) establish an aggressive commercial promotion program for our ethanol on the global market, with the development of actions to transform fuel ethanol into an international “commodity”, with participation in energy, oil & gas fairs, as well as organizing missions to the abroad to present to other potential producing countries the success of the Brazilian ethanol program, visiting the world's main automakers and seeking articulation with international environmental organizations. The success of all these proposed actions can be achieved with the definition of a national coordination, with the participation of Ministries, State Governments, Regulatory Agencies, Financial Entities, Financing Banks, Producers, Logistics Companies and Associations.
If the conditioning forces remain unchanged, there will be no shortage of resources to increase ethanol production. The government and the national and international productive sector will act to increase the planted area and the implementation of new processing units, as can be seen with the initiatives of states in the southeast and center-south of the country. The sugar and alcohol community has matured to seek independent solutions, not linked to federal programs and subsidies.
The departure of the government to relinquish control and, consequently, eliminate interventions in the sector was very important to provide agility, corporate aggressiveness and freedom of action. A system of market regulation through a national inventory policy, managed by the national community itself and executed by companies specializing in fuel storage terminals, could be one of the model alternatives, where each actor has its specific role: the government makes the regulation; producers supply the alcohol; the alcohol community schedules the inventory, specialized companies carry out the transport and storage, via service provision. As for the nominal storage capacity, there are also doubts, although the tendency is for the sector to self-regulate. The financial burden of the product to create this stock should be on the productive sector.
For the beginning of alcohol batch exports, collection centers, terminals, pipelines and ships already exist. However, seeking to reduce the final cost of logistics to guarantee and consolidate international competitiveness, Brazil is studying investments for the construction of tanks and new pipelines, and even new special ships for the export of fuel ethanol. of logistics includes the use of different modes, such as road, rail, waterway and pipeline. The Ethanol Export Corridor project, as it has been called, is being discussed by representatives of the Federal Government, State Governments, the Petrobras System and businessmen and industry associations. There are already separate projects for the Northeast, Center-South and South regions.
Current production is approximately 18 billion liters, with an export of 3.5 billion. The current infrastructure already has the capacity to export over 5.5 billion liters. Today, 90% of alcohol production is concentrated in the Center-South Region, with 62% in São Paulo. By the end of the decade, it is estimated that annual Brazilian production should reach 30 billion liters, with an export potential of more than eight billion liters per year.
The international market should be developed based on the Brazil-United States partnership and built with the participation of other countries. Brazil's credibility will be the basis of this important work to consolidate the country as the main agent of yet another international commodity. The development of the futures market for ethanol is also an important movement. We must play a proactive role, going to the international market to aggressively offer the Brazilian solution for the use of this fuel. We cannot agree with the idea that we Brazilians do not sell ourselves, but that we are bought. Those who are bought are already at a disadvantage in negotiation.
We are on our way to the world, suitcase in one hand, sample of Brazilian fuel ethanol in the other and the belief that Brazil's time has come, in an economic activity of global interest that is part of our history. The time has also come to receive the dividends of all this national effort and future generations will not accept it if the current leaders neglect this opportunity for our country.
Marcelino Guedes Gomes has been a Petrobras employee for 20 years. He is currently Director of Pipelines and Terminals at Petrobras Transportes SA-Transpetro.