The global dynamics of biofuels. Potential supply and demand for ethanol and biodiesel in the coming decade

Apr 2007

This report was written by the Brazil Institute of the Woodrow Wilson Center which is a “think tank” in Washington that promotes the US – Brazilian relationships.
The article collects the opinions of seven experts on biofuel production in the US and Brazil, and deals in particular with ethanol. One of these experts, Prof. Tyner, argues that the energy policies in the United States and Brazil have implications far beyond their own borders. Therefore, the global consequences of energy policy alternatives must be analyzed within the international context and be conscious of market interconnections. As the US and Brazil are the world’s largest producers of biofuels, they have decided to carry out a joint strategy of energy cooperation to promote technology-sharing and to encourage ethanol production and consumption internationally. Partnerships such as the U.S.-Brazilian one reflect the importance that Brazil places upon international cooperation on energy, as well as Brazil’s intention “to bring alternative development to poor countries by creating an international market for biofuels”.
The first section of the article refers to US ethanol government subsidies and exposes six alternatives to improve this mechanism. The article then gives a quick view of the Brazilian ethanol industry and its problems and advantages. After introduction of both scenarios, it analyses the US-Brazilian relationships regarding biofuels and ethanol, taking into account some different variables: trade, technical cooperation, and ethanol international markets.

By: The Brazil Institute. Woodrow Wilson International Center for Scholars

 
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