When one considers the biofuels industry and Latin America, the first country that comes to mind is Brazil. The South American giant has developed a strong sugarcane-based ethanol industry that has been viable for more than two decades. Until recently, Brazil produced ethanol primarily for domestic use, with all vehicles in the country running on a blend of ethanol and gasoline. 

 

Brazil's overwhelming success prompted other Latin American countries to look at ethanol as an alternative fuel source, especially when global oil prices began to rise in 2004. The effort to develop ethanol and other biofuels is promoted in part by the Inter-American Development Bank (IDB), which set a goal for the region to produce 5% of the world's annual ethanol by 2020, compared with its 1% rate in 2007. Central American countries and Mexico are among those who have made the biggest push for ethanol production.

 

For all its environmental benefits, the move to ethanol brought another set of problems. Because not every country has as large of a surplus of sugarcane as Brazil, the alternative raw material would be corn or some other grain. This has prompted a debate on whether governments should sacrifice the food needs of their populations to create biofuels. The increased demand for corn not only would create a shortage domestically but would greatly increase the price of food commodities on the world market because of price speculation. Global prices for grains surged in 2007 after the US announced it intends to develop an ethanol industry.

 

In late 2007, Mexican President Felipe Calderon vetoed legislation to create an ethanol industry, citing concerns about a possible shortage of corn and sugarcane in Mexico.

 

There are efforts to produce ethanol with products other than food crops, including switch grasses and other materials.In 2008, a Mexican company announced that it was developing ethanol from algae grown at a plant in Sonora state.

 

The strong push toward biofuels production slowed down once oil prices began to drop because of the global recession that began in 2008. Still, ethanol and biofuels will be part of the energy conversation in the Americas in coming years as the effort to reduce greenhouse emissions remains very much at the forefront of talks on global climate change.

Carlos Navarro - Editor