By Lise Alves, Senior Contributing Reporter
SÃO PAULO, BRAZIL – An agreement between the Brazilian government and the country’s automotive and sugar-ethanol industry will increase the blend of ethanol in gasoline from 25 percent to 27 percent starting February 15th. The final proposal, however, still needs to be authorized by Brazilian President Dilma Rousseff.
The meeting held Monday (February 2nd) in Brasília, led by President Rousseff’s Chief of Staff, Aloisio Mercadante, was a positive sign for UNICA (Sugarcane Industry Union). According to news agency Agencia Estado, UNICA’s President, Elizabeth Farina said that the measures were very positive for the sugar-ethanol sector, which has been eagerly waiting for a solution to its economic problems.
According to Farina the measures will give new strength to the sector, trying to overcome the crisis which has led to the closing of at least sixty sugar-ethanol manufacturing plants in the country.
The blend, according to officials will only be increased in regular gasoline, sold at fuel stations. Premium (high-octane) gasoline will continue to be mixed with 25 percent ethanol. According to Luiz Moan, President of ANFAVEA (National Automotive Manufacturers Association), who also attended the meeting, there are plans to increase the blend of both regular and premium gasoline to 27.5 percent in the near future.
According to UNICA the increase of two percent of ethanol in regular gasoline will increase the demand for ethanol by more than one billion liters per year. The Union says that the sector will be able to meet the increased demand.
Despite the severe drought faced by sugarcane producing regions in Brazil in the 2014/2015 season, UNICA officials state that the production of ethanol for the current season should be slightly superior to that of 2013/2014, closing at approximately 25.81 billion liters. In 2012 Brazil increased the blend of ethanol in gasoline from 20 to 25 percent.