Brazil’s10 millionth flex-fuel car rolls off auto assembly line March 4

Meanwhile, the rest of the world speculates if oil will hit $200 a barrel.

The US Department of Energy increased their oil price forecast to $85 a barrel by the end of 2011. However, since oil trading is already close to $80 a barrel now, that estimate seems very low. An unthinkable $200 a barrel does not seem so far-off now.

A transition from oil to biofuels is one of the main solutions that could significantly reduce oil demand and prove predictions of $200-a-barrel wrong again. Brazil has spent decades developing their flex-fuel industry, and the 10 millionth model has just rolled off the assembly line. Their system, dating back from the 1970s, is seen as a model for how other countries could make greater use of renewable fuels. According to Brazil’s Bank for Economic and Social Development, Brazil’s sugarcane ethanol costs $36 to $43 a barrel, making it a very appealing replacement for gasoline. Brazil’s market consumes about 3bn liters of ethanol fuel a year. Nearly 90 per cent of new light vehicles sold in the country have “flex fuel” engines, able to run on gasoline or ethanol or any mixture of the two, and almost all service stations in Brazil sell fuel ethanol.

Exports represent only a fraction of Brazilian production, partly because of high domestic demand and partly because of barriers in developed markets.

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