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Monday, 19 April 2010

Economic diversification – sugar to ethanol

In September 2005, Guyana signed an agreement with neighbouring Brazil to provide us with the technology used to produce ethanol. Ethanol, simply put, is a high-octane fuel produced from sugarcane that can be used as an alternative or additive to petrol. With the European Union’s decision to halt preferential pricing to ACP countries, this technology certainly offers us another viable means of sustaining our sugar industry. However, if we play our cards just right, ethanol could be more than just a quick fix in the face of a scary fiscal situation. It would be wise for us to aggressively pursue this alternative given the declining prices we are going to be getting in our historic sugar markets, to stem the potential job losses for sugar workers from a declining sugar industry, and to reduce our dependence on imported fossil fuels which consume a significant proportion of our foreign exchange earnings. Brazil, the world’s leading producer of sugar, is also the world’s leading producer of ethanol. The country started out on a small scale simply to make itself less dependent on the rising cost of petrol; the type of fuel that keeps our cars on the streets each day. However, as the demand for ethanol consistently grew, Brazil became a model for research and use of this new fuel. In fact, demand for ethanol in Brazil is so high that it is expected that two out of every three new cars sold will be Flex cars, short for flexible fuel. Flex fuel is a mixture of 85% ethanol and 15% petrol. A Scottish newspaper had published an article about the agreement between Brazil and Guyana. This article quoted the then new president of Ford Brazil as saying, “Demand has been unbelievable. I am hard pressed to think of any other technology that has been such a success so quickly.”

Source: Stabroek News