The role of Mario Garnero in the construction of Brazil as the world leader in Biofuels

21 March 2012 | In Innovation | 457 views | By

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Mario GarneroThe Downstream electronics magazine Today, one of the main vehicles for information and analysis of the energy industry worldwide, recently published an important article about the trajectory of Mario Garnero, President of the Brasilinvest group, in the construction of Brazilian leadership in biofuels. Below is the full story.

Father of Brazilian ethanol Sees gains in Biofuels

The US Congress recently authorized the expiry of import tariffs of ethanol deployed over three decades. The Brazil has always been a big critic of these tariffs, who judges protect the USA from international competition. In this context, a pioneer of Brazil's ethanol industry estimates that the end of tariffs will promote a robust growth of ethanol market in the Americas and around the world.

“We will become a commodity market,” provides Mario Garnero, President of Brasilinvest, business bank headquartered in São Paulo, and the pioneer industry by rapid growth of ethanol in years 1980. “If so pork bellies and other produtos são tratados como commodities globais, Why not ethanol?”

Although already negotiating future agreements on exchanges such as ethanol from Chicago and New York Mercantile, Garnero understands that ethanol still isn't a global commodity. He explains that the scale and the volume of transactions, as well as the number of scholarships that they negotiate the ethanol, they have to grow up well before that status is reached.

“The standardization of product specifications and how ethanol contracts are drawn up – and something more akin to a standard price for the freight of ethanol – would also be of great help to the expansion of global trade of ethanol”, Adds Garnero. “Movimentos dessa nature ajudariam a compensar a volatilidade de preços por conta das sazonalidades que cada país enfrenta na produção de etanol”.

Additive the alternative

Petrobras announced in 2006 that Brazil had reached self-sufficiency in oil and gas production. The announcement marked a profound change in the energy situation in the country since the early 1970. The Brazilian high dependency on imported oil at that time had become painfully clear, because the Government arises the price of gasoline and racionara the sale of fuels in order to deal with the precarious situation of supply.

After the first oil shock 1973, the Brazilian Government has implemented an ambitious program of expansion of ethanol as an automotive fuel. Obtained from the cultivation of sugar cane, ethanol has been being mixed in bunkering for some decades. Within the framework of the national program of Alcohol (known as Pro-Alcohol) established by the Government in 1975, the Brazil would try, However, reduce its dependence on imported oil through the progressive substitution of gasoline by ethanol in vehicles.

The Brazilian Government also actively promoted the exploration and production oil national response to oil shocks, action that has increased dramatically the destination country's energy. However, the PROALCOOL prenunciava a significant change in the way in which Brazilian drivers abasteceriam their cars.

The instant the PROALCOOL entered into force, the supply of gasoline in Brazil contained less than 10% ethanol in full composition – result of lower progressively combinations located in decades that followed the second world war. During the war, the ratio of gasoline to ethanol fuels reached approximately 60:40 in order to compensate for the difficulties in receiving imported oil.

The PROALCOOL has subsidized ethanol production expansion with tax incentives for farmers to produce more sugar cane, the auto industry produced vehicles capable of running on ethanol and more biorrefinarias were built. In addition, the Government has funded a distribution network so as to give drivers easy access to ethanol pumps.

The Government also stipulated a percentage of mixture of ethanol and gasoline that floated annually between 10% and 22% over two decades. The same extent were established controls that kept prices artificially low consumer of ethanol, allowing a rapid growth in the sale of vehicles built to run with 100% ethanol.

The growth of ethanol-powered vehicles arose from a proposal led by Garnero, at that time chairing ANFAVEA, National Association of motor vehicles. Among the members of ANFAVEA were world-class automakers such as GM, Mercedes-Benz and Volkswagen.

“Faced with a government mandate: find workaround for petrol or let's impose rationing for consumers”, Remember Garnero, they predicted that the rationing would markedly negative impacts upon automakers in Brazil.

“Decided to convene all the Presidents of the European automotive sector and to propose a solution that wasn't the rationing: convert all gasoline engines in pure ethanol powered engines”.

Garnero, that was also a member of the National Commission on energy in Brazil, organ that oversaw the implementation of the Pró-Álcool, was in a unique position to lead the alcohol engine proposal through all the ins and outs of Government. His role in this process earned him the title of “Father of Ethanol” in Brazil and in the world.

Since the incentives were necessary, the ethanol-powered car sales became clear. According to figures from UNICA? Industry Union of sugar cane,just a little more than 2 thousand ethanol-powered vehicles were sold in Brazil in 1979. The following year, the number jumped to around 230 mil. In 1983, were already more than half a million units. In the same period, the sale of petrol vehicles fell from 820 thousand tothousand mil. In the years 1990, the drop in the international price of oil and the difficulties in ethanol supply meant that the Brazilian Government progressively relaxasse subsidies and price controls.

Type cars “flex”, movidos a etanol, petrol or a mixture of both, had some marketing 40 thousand units in 2003 in Brazil. In 2008, were more than 2 million units sold. Today, gasoline sold in Brazil needs to contain 25% de etanol, and 4 in each 5 vehicles runniethanolzilian roads are of type “flex-fuel”.

New team members of ethanol

Even though the United States and Brazil are the two largest producers of ethanol, Garnero notes that biofuel production is spreading through many tropical and subtropical regions able to allow the cultivation of sugar cane. He mentions China and Thailand as the next “mega-power plants” ethanol, In addition to the Philippines and Malaysia as important supporting cast.

The region is considered as the greatest potential Garnero beyond Brazil is Africa. It shows that agriculture is undergoing a revolution in Africa, the main territorial part lies between the tropics. Garnero explains that Africa offers many of the features presented by Brazil: long cultivation, with huge solar incidence, In addition to favourable moisture and soil. Garnero provides that the junction of the endogenous potential with advanced processing techniques should occur over the next 20 anos e afirma que o development agrícola em toda a África deve ser crucial para elevar o etanol de cana-de-açúcar a novos patamares nos próximos 10 years.

“We are important parts in this Board”, says Garnero. “Africa will be the path of a renewable agriculture and efficient in the creation of jobs and wealth”.

The expectation is that the Brazil under Garnero will play an important role in cooperation geared to introducing ethanol industries in Africa and in other regions through the expansion of research & development. In fact, Garnero deseja que o Brasil se torne cada vez mais a fonte de conhecimento e technology para projetos inovadores de etanol em todo o mundo.

Spreading the message of biofuels

THE “Father of Ethanol” not tergiversa when it comes to promote ethanol globally through its role as a pioneer leader. In 2012 He commands high-visibility events and repercussions in the field of renewable energy. Will chair conferences on green economy in China and the USA, and symposia related to the Rio Summit 20 of the UN. Garnero has so many stages to expose his vision about the role of Brazil in the future of biofuels.

“The Brazil occupies the second place behind the USA, but we have an ability to reach 80 million m3 against the 40 million that the USA produce today”, says Garnero.

Garnero also indicates that only 1,5% the land subject to the cultivation of sugar cane in Brazil are used today. Despite the USA produce five times more ethanol than Brazil, He argues that the fact that Brazil has avoided the contraposition between food and fuel, with emphasis on sugar cane and maize not, It is of great attractiveness for emerging markets.

In addition, the businessman also sees opportunities for sugarcane ethanol production in the u.s.. He points to the Gulf Coast region, It has a long history of cultivation of sugar cane from Florida to Texas.

“As Brazil to develop technologies of second-and third-generation geared to ethanol, bagasse can also be increasingly used”. Garnero estimates that the Brazilian production of ethanol in this case could double even without the use of new cultivation areas.

“I think the Brazilian experience with ethanol shows that when you don't put food competing with biofuels, Gets an extraordinary source of energy”, concludes Garnero. “Since the beginning, ever we think biofuels as oil replacers. Unlike, biofuels can occupy between 10 the 20% the participation of energy represented by oil. And this already makes a major contribution to tackling the theme of pollution and increased agricultural productivity in Brazil”.

CONTACT: Anamélia Meirelles

T: 55-11-3094-7984

Distributed by PR Newswire news

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