Brazil exports ethanol to US but fails to meet domestic demand

In Brazil, ethanol producers cannot meet the demand from the number of flex-fuel vehicles on Brazilian roads.

The nation has suffered two low sugarcane harvests throughout 2010 and 2011 and this was attributed to excessive rainfall. As a result, the mandatory percentage of ethanol to be blended with fossil petrol was lowered.

The Brazilian government then declared an ethanol shortage, blaming the lack of future planning. The ethanol industry, however, disagreed with this and cited unfair taxes and a lack of financial support for the cause of the problems.

'As long as there is no clarity about the policy for fuels, there is a risk for investments,' says Plinio Nastari, president of the Sao Paulo-based consultancy firm Datagro.

However, despite the 115 ethanol production facilities in operation across Brazil struggling to meet domestic needs, the nation has begun exporting the biofuel to the US. 1.9 million barrels of ethanol have already been exported, according to a report.