page_title: History of ethanol fuel in Brazil
section_title: The Pro-Alcohol era
hierarchical_section_title: History of ethanol fuel in Brazil / The Pro-Alcohol era
caption_attribution_description: English: Neat ethanol (E100) powered Volkswagen Parati (sold as the "Fox" in North America) fueling alcohol, Piracicaba, Sao Paulo, Brazil
context_page_description: The history of ethanol fuel in Brazil dates from the 1970s and relates to Brazil's sugarcane-based ethanol fuel program, which allowed the country to become the world's second largest producer of ethanol, and the world's largest exporter. Several important political and technological developments led Brazil to become the world leader in the sustainable use of bioethanol, and a policy model for other developing countries in the tropical zone of Latin America, the Caribbean, and Africa. Government policies and technological advances also allowed the country to achieve a landmark in ethanol consumption, when ethanol retail sales surpassed 50% market share of the gasoline-powered vehicle fleet in early 2008. This level of ethanol fuel consumption had only been reached in Brazil once before, at the peak of the Pró-Álcool Program near the end of the 1980s.
context_section_description: As a response to the 1973 oil crisis, the Brazilian government began promoting bioethanol as a fuel. The National Alcohol Program -Pró-Álcool- (Portuguese: Programa Nacional do Álcool), launched in 1975, was a nationwide program financed by the government to phase out automobile fuels derived from fossil fuels, such as gasoline, in favor of ethanol produced from sugar cane. The decision to produce ethanol from sugarcane was based on the low cost of sugar at the time, the idle capacity for distillation at the sugar plants, and the country's tradition and experience with this feedstock. Other sources of fermentable carbohydrates were also explored such as manioc and other feedstocks. The first phase of the program concentrated in production of anhydrous ethanol for blending with gasoline.
  After testing in government fleets with several prototypes developed by local subsidiaries of Fiat, Volkswagen, GM, and Ford, and compelled by the second oil crisis, the first 16 gasoline stations began supplying hydrous ethanol in May 1979 for a fleet of 2,000 neat ethanol adapted vehicles, and by July, the Fiat 147 was launched to the market, becoming the first modern commercial neat ethanol-powered car (E100) sold in the world. Brazilian carmakers modified gasoline engines to support hydrous ethanol characteristics. Changes included compression ratio, amount of fuel injected, replacement of materials subject to corrosion by ethanol, use of colder spark plugs suitable for dissipating heat due to higher flame temperatures, and an auxiliary cold-start system that injects gasoline from a small tank to aid cold starting. Six years later, approximately 75% of Brazilian passenger cars were manufactured with ethanol engines.
  The Brazilian government also made mandatory the blend of ethanol fuel with gasoline, fluctuating from 1976 until 1992 between 10% and 22%. Due to this mandatory minimum gasoline blend, pure gasoline (E0) is no longer sold in the country. A federal law was passed in October 1993 establishing a mandatory blend of 22% anhydrous ethanol (E22) in the entire country. This law also authorized the Executive to set different percentages of ethanol within pre-established boundaries; since 2003 these limits were fixed at a maximum of 25% (E25) and a minimum of 20% (E20) by volume. Since then, the government has set the percentage on the ethanol blend according to the results of the sugarcane harvest and the levels of ethanol production from sugarcane, resulting in blend variations even within the same year.
  Since July 2007, the mandatory blend was 25% of anhydrous ethanol and 75% gasoline or E25 blend. As a result of supply shortages and high ethanol fuel prices, in 2010 the government mandated a temporary 90-day blend reduction from E25 to E20 beginning February 1, 2010. As supply shortages took place again between the 2010–2011 harvest seasons, some ethanol was imported from the US, and in April 2011 the government reduced the minimum mandatory blend to 18 percent, leaving the mandatory blend range between E18 to E25.
  By mid-March 2015, the government raised the ethanol blend in regular gasoline from 25% to 27%. The blend on premium gasoline was kept at 25% upon request by ANFAVEA, the Brazilian association of automakers, because of concerns about the effects on the higher blend on cars that were built only for E25 as the maximum blend, as opposed to flex-fuel cars. The government approved the higher blend as an economic incentive for ethanol producers, due to an existing overstock of over 1 billion liters (264 million US gallons) of ethanol. The implementation of E27 is expected to allow the consumption of the overstock before the end of 2015.
  The Brazilian government provided three important initial motivators 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 incentives made ethanol production competitive.
  Afte
caption: As of 2009 there are still neat ethanol cars running on Brazilian roads. Shown here a neat ethanol car fueling E100 at a Piracicaba gas station, São Paulo.
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