05/06/08

FAO: Lula defends the ethanol energy revolution

Blames on subsidies to farmers and defence for bio-fuels, a source of wealth and jobs

Brazil’s economic boom, the ethanol-based energy revolution, the subsidies to be banned for farmers in rich countries, food safety. In his speech at the Rome FAO Summit, President Ignacio Lula touches on many issues, among which the controversial question of interdependence of food and energy prices. The skyrocketing oil price is responsible for price rises in any sector. He says: “ In Brazil for every litre of milk, for foodstuffs such as soy-beans, wheat or peas 30% of the final price is affected by oil. And that occurs in a country where crude oil meets only 37% of the energy needs, while 46% is supplied by renewable sources such as sugarcane and hydro-electric power plants. At this stage I wonder how much that may affect other countries which are more oil-dependent than us.” In another passage of his speech Lula strongly defends the choice of bio-fuels: “They are very important for the fight against climate change and play a vital role in the economic and social development of the poorest countries. Alongside clean energy, they produce wealth and jobs, mainly in rural area.”

A hard attack was then launched by Mr Lula on “those who think that bio-fuels starve the world, while they do not consider how much the price of crude oil affects the final price of foodstuffs, mainly in the production stage rather than in its transport.” “I regret seeing that many of those who blame bio-ethanol – continued President Lula – are the ones that, for decades, have adopted protectionist policies to the detriment of farmers in developing countries and of consumers worldwide.”

After that the President quotes Brazil as a country where energy crops coexist with food ones. Out of 340 million hectares of farmland only 2% is used for sugarcane crops and only 1% of them produces ethanol. Besides, according to the statistics of the Ministry of Agriculture, the grain output, since 1970 (when the ethanol national programme started) to date, has increased by 142% thanks to the investments, the technological applications and the research in the farming sector. However, Lula, not yet satisfied with his attack, kept on demolishing the argument according to which Brazilian ethanol would be responsible for the Amazon region’s uncontrolled deforestation.

The President pointed out that in northern areas, mostly covered by the Amazon rainforest, there are only 21 thousand hectares of sugarcane plantations (0,03% of the total), but he claimed he is against the production of ethanol derived from corn. “This type of bio-fuel – he said – can compete with sugarcane ethanol only because it is backed by subsidies to farmers as well as by high import tariffs. Actually, from corn-based crops we get an energy balance of 1.5% out of the whole energy used, compared to 8.3% of sugarcane-derived ethanol. “Brazil is a competitive country because we have fertile soil, sun and water in large amounts as well as farmers who are in the lead of new technologies. But we are not the only ones. Many African, Caribbean and South American countries are enjoying the same opportunities. Cooperation, transfer of technologies and the opening of new markets are the conditions to produce bio-ethanol and bio-diesel and to create jobs and wealth.”

According to Lula’s view, at least a hundred countries would have a natural gift for producing bio-fuels. He reminds that in Brazil nearly all vehicles are Flex-Fuel: according to some research, the CO2 emissions from sugarcane ethanol would be by far lower than a gasoline car’s. “We have discovered that a gasoline car used to emit 250 g/km of CO2, that is, an amount 8.5 times higher than a bio-fuelled one.”

“The same applies to bio-diesel: fossil-fuelled trucks are 5.3 times more polluting”. Finally, Lula concluded his speech asking the audience to carefully think over the contribution of bio-fuels to the environmental issue, if global warming is to be adequately tackled, and inviting the heads of institutions, companies and nations to attend the International Bio-fuel Conference in San Paulo, scheduled next November.