Preparing for Partnership

Obama, Rousseff participate in Brazil–US forum
By Holly Jessen | May 10, 2012

While exports of Brazilian ethanol are expected to stay down in the short term, a March report predicts the country will increase its ethanol market share in the U.S. in the coming decades. And, if recent high-level talks are any indication, the two countries are preparing for that possibility.

A forum, “Brazil-U.S.: Partnership for the 21st Century,” was held April 9 in Washington, D.C. President Barack Obama and Brazil President Dilma Rousseff met to discuss the country’s ongoing relationship. During the event, they noted the adoption of a Brazil-U.S. Action Plan on Science and Technology Cooperation, which addressed several areas, including advanced biofuels. They also pointed to the launch of the Strategic Energy Dialogue, which calls for increased cooperation on oil and gas, biofuels, renewable energy and other categories.

During another portion of the event, Petrobras’ CEO Maria das Gracas Silva Foster was a speaker on the Partnership in Energy panel. She talked about the company’s projected growth in Brazil in oil as well as the ethanol and biofuels markets. “Oil prices may open new opportunities for alternative fuels,” she said. “I believe we will lead ethanol production in Brazil in five years.”

Just a few days before, Sen. Barbara Boxer, D-Calif., visited the Brazilian headquarters of UNICA, the country’s sugarcane industry association. “Brazil has played, and continues to play, an important role in favor of the global progress of the ethanol industry as well as in the creation of better conditions to structure this market on a global level,” Boxer said. Adhemar Altieri, UNICA’s corporate communications director, pointed to Boxer’s support of free trade. “Sen. Boxer is part of a now significant share of U.S. legislators who are well-equipped to better evaluate essential questions, such as energy, in a more pragmatic manner, without bowing to specific interests,” he said.

At the same time, the administration has remained supportive of the U.S. biofuels industry. On April 18, Heather Zichal, deputy assistant to the president for energy and climate change, spoke at the Renewable Fuels Association’s Washington Legislative Forum in Washington, D.C. “One of those most promising [clean energy] industries has been American biofuels,” she said, adding that there’s a need to continue supporting the expansion of the U.S. biofuels industry. She also talked about the Obama administration’s commitment to infrastructure for biofuels.      

In mid-April, UNICA issued its projection for the 2012-’13 sugarcane harvest in south-central Brazil with a 3.19 percent increase. While sugar exports are expected to rise, ethanol exports are projected to drop. UNICA estimates Brazil will need to double sugarcane production to 1.2 billion tons by 2020 to maintain market share and meet demand.

Earlier, the Rabobank report “The Future of Ethanol,” reinforced the sugarcane outlook. It highlighted the end of the import tariff and renewable fuels standard as creating a favorable scenario for the commercialization of sugarcane ethanol in the U.S. in the middle and long term. In the short term, the country will continue to focus on ethanol production for use domestically—a situation that has opened the Brazilian market for U.S. ethanol in recent years.  —Holly Jessen