BRAZIL: THE NEW COLOSSUS

Carmelo Ruiz Marrero
(Taken from 'Biotech Bets on Agrofuels' http://americas.irc-online.org/am/5179)

Brazil is attracting more investment in agrofuels than any other country ($9 billion in 2006). Brazil got a head start in the industry and has been running hard ever since. It already runs most of its vehicles on sugarcane ethanol, and now has 62% of the world sugar market, compared to only 7% of the market in 1994. Sugarcane monocultures in Brazil cover 6.9 million hectares, with half of those dedicated to ethanol. By 2025 it expects to add 42 million hectares more.

Its biodiesel potential is also massive: 21% of the country's farmland (almost 20 million hectares) is planted with soy. "In the next 10-15 years, we will see Brazil become the leading producer of biodiesel," said Brazilian president Luiz Inacio "Lula" da Silva in 2005. Brazil is expected to overtake the United States as the world's leading soy exporter by the end of 2008.

Agribusiness giant ADM has chosen Brazil as the hub of its South American biodiesel operations. Its new biodiesel refinery in the southern state of Mato Grosso do Sul is Brazil's biggest and its clients include state governor Blairo Maggi, who also happens to be one of the world's largest soy farmers.

"To secure its share in the emerging global industry of clean energy, Brazil has adopted quite an impressive strategy on agrofuels, from combining public and private sector interests," according to a 2008 joint report by the U.S.-based Oakland Institute and Brazil's Terra de Direitos. Brazil's "Agroenergy Plan (2006-2011), (is) the most ambitious public policy on agroenergy in the world."

Far from being rivals, the United States and Brazil are agrofuel partners. Together they produce 70% of the world's ethanol and are working in tandem to maintain their supremacy in this sector.
In March 2007 Lula traveled to Camp David to sign a memorandum of understanding on ethanol with U.S. President George W. Bush. The agreement forms a bilateral partnership on research and development, feasibility studies, technical assistance, and greater compatibility of standards and codes with the goal of establishing a world commodity market for agrofuels. A few days later, Bush visited Brazil and several other Latin American countries in what is popularly known as the "ethanol tour."

"Brazil is paving the way in transforming ethanol into an internationally tradable energy commodity," says Roberto Abdenur, former Brazilian ambassador in the United States. "An improved bilateral relationship is not only necessary and beneficial for Brazilian interests, but U.S. interests as well. The bilateral dialogue is increasingly a two-way street. The United States continues to set the agenda for the international arena; however, Brazil is a decisive player in defining the terms on which that agenda is discussed."

Ethanol is an important component of Brazil's ambitious global designs. It has reached agroenergy agreements with countries like Senegal, Benin, South Africa, Nigeria, Japan, China, and India. In October 2007 Lula toured several African countries, including Congo and Angola to, among other things, urge them to join the "biofuels revolution." Among other aspirations, the country is seeking to join the UN Security Council. Once in the Council, Brazil hopes to be able to exert a decisive influence on the UN's deliberations related to global warming and therefore any proposed solution, like agrofuels.

Not few political observers contend that the Bush-Lula "ethanol alliance" is a geopolitical maneuver intended to economically isolate the governments of Bolivia's Evo Morales and Venezuela's Hugo Chávez, both of whom are funding their social change projects with the export of fossil fuels.

"The political-business alliance between the United States and Brazil around ethanol is a blow against regional integration based on oil and gas that for several years has been loosely constructed between Venezuela, Argentina, Bolivia, and recently Ecuador," said Uruguayan journalist Raúl Zibechi in a 2007 Americas Program report.

According to Zibechi, the Brazil-U.S. alliance breathes new life into the objectives that Bush had to postpone in November 2005 when the Free Trade Area of the Americas foundered in the Americas Summit in Mar del Plata, Argentina. "A long term agreement with Brazil would allow the United States to achieve three central objectives: diversify the petroleum matrix, reducing its dependence on imports from Venezuela and the Middle East; weaken Venezuela and its allies; and put brakes on the regional integration powered by hydrocarbons which had taken off in 2006."