Domestic Fuel

Here’s a couple of interesting international developments on ethanol.

Domestic Fuel reader Erick Erickson of Nebraska sent a link to a post on a European blog called Biopact that tells about “an interesting but as yet unclear development” in Venezuela. Seems that Venezuela’s most recent Energy Strategy Meeting concluded with the announcement that the country will be investing massively in ethanol production. The OPEC member is the world’s 7th largest oil exporter, so it comes as a surprise to see Venezuela investing in biofuels.

Meanwhile, Brazil is pulling out all stops to increase ethanol production. According to UK Auto Industry - Unica, the Brazilian entity which manages the country’s sugar cane production, has announced that 77 new ethanol refining plants will be opened by 2012-2013, adding to 248 existing plants. At present, 48.3% of Brazil’s sugar cane harvest is made into ethanol; in six years’ time, this percentage will rise to 60%.

As was expected, Brazil has raised its ethanol mandate for fuel due to a record sugarcane crop. Fuel distributors will have to add a 23 percent ethanol content to all gasoline sold to service stations starting Nov. 20, rising from a 20 percent mandate now, the agriculture ministry said in a statement. Read more from Bloomberg.