São Paulo – The Arab countries are interested in learning about ethanol addition to petrol, a measure being adopted by several nations worldwide. This information was disclosed by São Paulo Sugarcane Agroindustry Union (Unica) president Marcos Sawaya Jank, in a talk on Thursday (1), at the Arab Brazilian Chamber of Commerce offices. Jank spoke about the possibility of using the mixture in the United Arab Emirates. According to the executive, Unica receives between 180 and 200 foreign delegations a year, many Arab.
The Unica president believes that, despite producing oil, the Arab world is interested in lower emissions. “I see the Arab world paying great attention to the international climate debate,” he said, recalling that countries in general are introducing low carbon in their legislation. According to Jank, more desert nations in the Arab world will not be able to produce cane. "But they will find chances for cooperation,” he said. “The Arab nations that look far into the future are noticing that oil will not be the energy of the future,” said Jank, to an audience of 40 people.
The Unica president spoke about the international ethanol market, which is under gradual formation, with the decision for addition in other regions of the world and Africa. The sector has been criticised for supply problems last year, with lack of ethanol in the market, specifically at a period in which the United States dropped import tariffs on sugarcane ethanol, opening the market in the country. With this, the market has been doubting the Brazilian capacity to export ethanol.
Jank said that Brazilian ethanol exports will, actually, be modest, but that the global ethanol market will be formed. Foreign sales, according to him, are growing, despite the country currently importing more than it exports. “Exports will take place slowly, as countries start making their mixtures. But with strategic reserves, as nobody wants to leave dependence on Arab oil to depend on other countries,” he said.
According to the executive, other countries will produce ethanol. "The international market will be created, it is a consequence of establishment of a domestic market in countries,” he said, signalizing that the world will not become dependent on Brazilian ethanol. "There is no reason for Brazil to be the sole country of ethanol,” he explained, pointing out the potential Africa has for production of biofuels. Currently, over 30 countries have decided to mix ethanol into petrol.
Jank also mentioned the hardships lived by the country. "Last decade, we grew 10% a year, but from 2008 on, the industry stopped growing. We are at a bad production moment due to the global financial crisis,” he said, adding that one third of companies have been sold and changed hands since then. The ones that were sold are mainly those that invested, believing in sector growth. Ethanol, however, lost competitiveness against petrol and that is why the market is on the down.
In this respect, the sector has been talking to the government, seeking lower taxes on ethanol so that it may return to competitiveness. Jank stated that it is a matter of time for the sector to return to growth. The ethanol industry has decided on high targets: reaching 70 billion litres produced in the 2020/2022 crop. Currently, production is 27 billion litres.
The industry also hopes to take a great leap in production from sugarcane bagasse, as well as consolidating logistics projects for the sector, with the construction of an ethanol pipeline. Currently, sugar and alcohol sector revenues are US$ 48 billion, with exports of US$ 15 billion, 430 mills and 70,000 sugarcane producers.
Jank’s talk was part of an Arab Brazilian Chamber initiative of promoting debates about topics that are of interest to the organisation’s associates. The meeting on Thursday was opened by Arab Brazilian Chamber CEO Michel Alaby and included the presence of the organisation’s president, Salim Taufic Schahin, as well as other board members.
*Translated by Mark Ament
