Brazil is one of the largest producers of ethanol in the world and is the largest exporter of the fuel. In 2006, Brazil produced 308,000 bbl/d of ethanol. It is predicted that Brazil’s ethanol production will reach 329,000 bbl/d in 2007 and 365,000 bbl/d in 2008, as over half of all cars in the country are of the flex-fuel variety and all gasoline in Brazil contains ethanol. Ethanol in Brazil comes from sugar cane, which prospers in the country’s tropical climate.

In recent years, Brazil has tried to increase ethanol exports, especially to the United States. In 2006, Brazil exported 29,600 bbl/d of ethanol to the United States, quadruple the amount exported to the U.S. in 2005. To help facilitate additional exports, Petrobras announced a plan in early 2006 to build an ethanol pipeline from Goias, an interior area at the center of Brazil’s sugarcane production, to Sao Paulo. However, increasing domestic demand and high domestic prices may limit export growth. In addition, Brazil’s ethanol exports face high tariffs in some markets, such as the 54 cent per gallon tariff in the United States.

Energy Information Administration extracted from: http://www.eia.doe.gov/emeu/cabs/Brazil/Oil.html