Ethanol fuel in Brazil
Brazils 29-year-old ethanol fuel program uses cheap sugar cane, mainly bagasse (cane-waste) for process heat and power, and modern equipment, and provides a ~22% ethanol blend used nationwide, plus 100% hydrous ethanol for four million cars. The Brazilian ethanol program provided nearly 700,000 jobs in 2003, and cut 19752002 oil imports by a cumulative undiscounted total of US$50 billion. Today, Brazil gets more than 30% of its automobile fuels from sugar cane-based ethanol.
The Brazilian government provided three important initial drivers for the ethanol industry: guaranteed purchases by the state-owned oil company Petrobras, low-interest loans for agro-industrial ethanol firms, and fixed gasoline and ethanol prices where hydrous ethanol sold for 59% of the government-set gasoline price at the pump. These pump-primers have made ethanol production competitive yet unsubsidized.
In recent years, the Brazilian untaxed retail price of hydrous ethanol has
been lower than that of gasoline per gallon. Approximately US$50 million has recently been allocated for research and projects focused on advancing the obtention of ethanol from sugarcane in Sao Paulo.

# The National Program for Alcohol
With the 1973 oil crisis the Brazilian government, then run by the general Emilio Garrastazu Medici, initiated in 1975 the Pro-Alcool program.
The Pro-Alcool or Programa Nacional do Alcool (National Alcohol Program) was a nation-wide program financed by the government to phase out all automobile fuels derived from fossil fuels (such as gasoline) in favour of ethanol. It began with the anhydrous alcohol to blend with the gasoline. This mixture has been used since then and is now done with 24% of alcohol and 76% gasoline (commonly known as gasohol).  The program successfully reduced by 10 million the number of cars running on gasoline in Brazil, thereby reducing the country's dependence on oil imports. The decision to produce ethanol from fermented sugarcane was based on the low cost of sugar at the time. Other sources of fermentable carbohydrates were tested such as the manioc.

# Electricity from bagasse
Sucrose accounts for little more than 30% of the chemical energy stored in the mature plant; 35% is in the leaves and stem tips, which are left in the fields during harvest, and 35% are in the fibrous material (bagasse) left over from pressing.
Part of the bagasse is currently burned at the mill to provide heat for distillation and electricity to run the machinery. This allows ethanol plants to be energetically self-sufficient and even sell surplus electricity to utilities; current production is 600 MW for self-use and 100 MW for sale. This secondary activity is expected to boom now that utilities have been induced to pay "fair price "(about US$10/GJ or US$0.036/kWh) for 10 year contracts. This is approximately half of what the World Bank considers the reference price for investing in similar projects (see below).  The energy is especially valuable to utilities because it is produced mainly in the dry season when hydroelectric dams are running low. Estimates of potential power generation from bagasse range from 1,000 to 9,000 MW, depending on technology. Higher estimates assume gasification of biomass, replacement of current low-pressure steam boilers and turbines by high-pressure ones, and use of harvest trash currently left behind in the fields. For comparison, Brazil's Angra I nuclear plant generates 657 MW.
Presently, it is economically viable to extract about 288 MJ of electricity from the residues of one tonne of sugarcane, of which about 180 MJ are used in the plant itself. Thus a medium-size distillery processing 1 million tonnes of sugarcane per year could sell about 5 MW of surplus electricity. At current prices, it would earn US$ 18 million from sugar and ethanol sales, and about US$ 1 million from surplus electricity sales. With advanced boiler and turbine technology, the electricity yield could be increased to 648 MJ per tonne of sugarcane, but current electricity prices do not justify the necessary investment. (According to one report, the World bank would only finance investments in bagasse power generation if the price were at least US$19/GJ or US$0.068/kWh.)
Bagasse burning is environmentally friendly compared to other fuels like oil and coal. Its ash content is only 2.5% (against 30-50% of coal), and it contains no sulfur. Since it burns at relatively low temperatures, it produces little nitrous oxides. Moreover, bagasse is being sold for use as a fuel (replacing heavy fuel oil) in various industries, including citrus juice concentrate, vegetable oil, ceramics, and tyre recycling. The state of Sao Paulo alone used 2 million tonnes, saving about US$ 35 million in fuel oil imports.
Researchers working with cellulosic ethanol are trying to make the extraction of ethanol from sugarcane bagasse and other plants viable on an industrial scale.

# Program statistics
Except where noted, the following data apply to the 2003/2004 season.
The labour figures are industry estimates, and do not take into account the loss of jobs due to replacement of other crops by sugarcane

# Effect on oil consumption
Most cars in Brazil run either on alcohol or on gasohol; only recently dual-fuel ("Flex-Fuel") of ethanol and the ethanol/gasohol ratio are expected to increase again with deployment of dual-fuel cars.
Presently the use of ethanol as fuel by Brazilian cars - as pure ethanol and in gasohol - replaces gasoline at the rate of about 27,000 cubic metres per day, or about 40% of the fuel that would be needed to run the fleet on gasoline alone. However, the effect on the country's overall oil use was much smaller than that: domestic oil consumption still far outweighs ethanol consumption (in 2005, Brazil consumed 2,000,000 barrels of oil per day, versus 280,000 barrels of ethanol). Although Brazil is a major oil producer and now exports gasoline (19,000 m3/day), it still must import oil because of internal demand for other oil byproducts, chiefly diesel fuel (which cannot be easily replaced by ethanol).
According to government statistics Brazil produced 17.471 billion litres of ethanol in 2006. For 2007 Wagner Rossi, president of Companhia Nacional de Abastecimento, expects a production growth of 21.9%, bringing the total ethanol production to 21.298 billion litres.

# Environmental effects
The improvement in air quality in big cities in the 1980s, following the widespread use of ethanol as car fuel, was widely evident; as was the degradation that followed the partial return to gasoline in the 1990s.
However, the ethanol program was not perfect and brought a host of environmental and social problems of its own. Sugarcane fields were traditionally burned just before harvest, in order to remove the leaves, kill any snakes and fertilize the fields with ash. The smoke produced each season produces the same amount of carbon polution as the sugarcane would have produced if it were left in the field to rot, which is relatively little. However, the smoke greatly impacts the sugarcane-growing parts of the country, turning the sky gray and air hazardous throughout the harvesting season. As winds carry the smoke into nearby towns, air pollution goes critical and respiratory problems soar. This practice has been decreasing of late, due to pressure from the public and health authorities. In Brazil, a recent law has been created in order to ban the burning of sugarcane fields, and machines will replace human labor as the means of harvesting cane. This not only solves the problem of pollution from burning fields, but new machines also have a higher productivity than people.
Many nations have produced alcohol fuel with limited destruction to the environment. Advancements in fertilizers and natural pesticides have all but eliminated the need to burn fields, however chemical pollution from runoff may turn out to be just as harmful to the environment as the smoke. To ensure long-term viability for Brazils ethanol fuel industry, growers must be focused on sustainability rather than short-term productivity.

# Social implications
Since sugarcane only requires hand labor at harvest time, this shift also created a large population of destitute migrant workers who can only find temporary employment as cane cutters (at about US$3 to 5 per day) for one or two months every year. This huge social problem has contributed to political unrest and violence in rural areas, which are now plagued by recurrent farm invasions, vandalism, armed confrontations, and assassinations.
Some question the viabiliy of biofuels like ethanol as total replacements for gasoline/crude oil. One concern is that sugarcane cultivation will displace other crops, thus causing food shortages. However, these concerns seem to be groundless. Despite having the world's largest sugarcane crop, the 45,000 km2 Brazil currently devotes to sugarcane production amount to only about one-half of one percent of its total land area of some 8.5 million km2. In addition, the country has more unused potential cropland than any other nation. Some commentators, like George Monbiot, fear that the marketplace will convert crops to fuel for the rich, while the poor starve and biofuels cause environmental problems. It is unclear how this would be different from the current situation, as most food crops are grown and exported to richer nations, and neglects the very real environmental problems that the burning of fossil fuels causes. The cultivation of sugarcane for energy production is only likely to increase as fossil fuels become increasingly scarce and more expensive.

# Exports of Brazilian ethanol
- On 19 December 2005, the government-based Petrobras announced a contract with the Japanese Nippon Alcohol Hanbai for the creation of a joint-venture based in Japan to import ethanol from Brazil. The company, Brazil-Japan Ethanol, will have as its main object the creation of an ethanol market in Japan.
- The exportation of brazilian ethanol to the U.S. reached a total of US$ 1 billion in 2006, an  increase of 920% over 2005 (US$ 98 millions). .
- The U.S., potentially the largest market for the Brazilian ethanol, currently imposes trade restrictions on Brazilian ethanol in order to encourage domestic ethanol production, most of which has so far been based on processing corn instead of sugar cane or soybeans, which is much less efficient. There is concern that allowing the Brazilian ethanol to enter the U.S. market without taxation will undercut the budding ethanol industry in the United States. One of the arguments for that is that Brazil currently subsidises its ethanol production, which is false, as the subsidies program finished in the 1990s. Others argue that rather than impose trade restrictions on the import of the Brazilian product, that the U.S. should make subsidies of its own available to support its fledgling domestic producers.
- Sweden also has a large import from Brazil due to its 5% use of ethanol in all of its fuels.