The Brazilian Government has decided to roll back the anhydrous ethanol blend in petroleum from 25 per cent to 20 per cent for 90 days beginning on February 1.
The decision was taken by executives from the Brazilian Sugarcane Industry Association. The five per cent reduction is expected to result in an additional 100million litres of hydrous ethanol available per month – around seven per cent of current monthly demand.
It’s not the first time that Brazil has implemented a blend reduction – the last cut occurred in March 2006 when the percentage fell from 25 per cent to 20 per cent; it was then raised to 23 per cent in November that year before being reinstated to 25 per cent in July, 2007.
Hydrous ethanol is pure ethanol (E100) and is used in flex-fuel vehicles that run on both ethanol and petrol – by contrast, anhydrous ethanol, which is involved in the blend reduction, is mixed with gasoline and is virtually water free.
According to executives from the Brazilian Sugarcane Industry Association, there is no risk of pumps going dry because high prices are pushing drivers towards pure gasoline anyway. What’s more is that dropping the blend requirement is unlikely to change the dynamics of the cane industry which will continue to produce more sugar and ethanol every year.
The Brazilian Sugarcane Industry Association is currently the top producer of sugar and ethanol in the country’s South Central region and accounts for about 50 per cent of the country’s sugarcane harvest.
