Friday, March 2, 2007

Countries launch forum to transform biofuels into commodities

Countries launch forum to transform biofuels into commodities

The International Biofuels Forum will be established on Friday by
Brazil, United States, South Africa, China, India and the European
Commission. The idea is to create common norms and standards for these
products, especially ethanol, to consolidate world trade in the sector.

Alexandre Rocha*

São Paulo - With the target of consolidating the international biofuel
market, especially ethanol, Brazil, the United States, South Africa,
China, India and the European Commission are going to launch, on Friday
(02), at the offices of the United Nations (UN) in New York, the
International Biofuels Forum.

Information supplied by the Brazilian Foreign Office (Itamaraty) shows
that Brazil is ahead of this project, sponsoring the idea of making the
main producers and consumers of biofuels join forces and create common
technical norms for the sector as well as production, transport and
storage standards, among other items. With this, the countries
participating hope to transform products like ethanol and biodiesel into
energy, and not just agricultural commodities.

In this sense, the Forum, to last one year, is going to establish two
workgroups, one turned to the exchange of information about scientific
and technological advances, and the other to discuss standards and norms
for the sector, including infrastructure, logistics and foreign trade.
The groups, according to the Itamaraty, are going to operate in the
organization of the International Biofuels Conference, scheduled to take
place in Brazil in 2008.

In the evaluation of the government of Brazil, the expansion of the use
of biofuels is going to cause partial replacement of oil derivatives,
reduce emissions of polluting gas, as well as attract investment to the
productive chain.

Clearer international norms, according to the Itamaraty, are going to
provide incentives to the private sector in Brazil and in other
countries. Apart from that, the diffusion and increase of production is
going to generate clear economy of scale and, consequently, a reduction
of cost.

As published yesterday (28) by ANBA, the sugar and alcohol sector in
Brazil estimates that in 10 years, 50% of the Brazilian ethanol
production will be in the hands of foreigners. Just to have an idea of
the dimension of the forecasted growth, last year the participation of
foreign capital in the sector was just 3.4%.

To the government of Brazil, the production of biofuels is an important
vector for development. In Brazil, the sugar and alcohol sector has a
turnover of around R$ 40 billion a year and generates 1 million direct
jobs, according to the Ministry of Agriculture. Production of biodiesel
in commercial scale is only beginning in the country and the government
bets that it will benefit more and more small producers of oleaginous
plants, like castor seeds, for example.

Brazil and the United States, which are the two main international
producers of ethanol, have been mouthing their intention of transforming
alcohol into a great international commodity. This will be the main
theme of the meeting that presidents Luiz Inácio Lula da Silva and
George W. Bush are going to have on March 09, in São Paulo. The
Itamaraty evaluates that the Forum and dialogue about the sector between
Brazil and the US are not excluding, but complementary initiatives.

*Translated by Mark Ament


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