March 16, 2007

Brazil and Indonesia sign ethanol pact

Brasilia, Brazil – Brazil will provide Indonesia with technical assistance to produce sugarcane ethanol under a pact signed by the two nations, according to a report by the Green Car Congress.

With the fourth-largest population in the world behind China, India and the U.S., Indonesia wants to revitalize its agriculture sector and reduce its dependence on oil. The country is a member of the Organization of the Petroleum Exporting Countries (OPEC) but became a net importer of oil in 2004. The government has marked US$1.42 billion for agricultural subsidies, and another US$12.4 billion for biofuel development.

Indonesia currently produces mainly biodiesel, but wants to expand ethanol production from sugarcane and cassava. It is dedicating 2.25 million hectares of land to grow those crops for fuel.

The pact with Indonesia follows an earlier agreement between Brazil and the U.S. to promote ethanol as an alternative fuel, and to push for increased production in Latin America and the Caribbean. Brazil’s Dedini, the world’s largest builder of sugarcane mills, says the country may begin commercial production of cellulosic ethanol from sugarcane pulp by 2012, and is already making small amounts of ethanol from sugarcane juice.

Brazil currently has a requirement of 23 per cent ethanol blend in gasoline, but may boost it to 25 per cent in May.

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