Brazil: Biofuel Gold Rush Continues


Richard Moore

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[06/05/07] Biofuel Gold Rush Continues. By April Howard
Brazil: Biofuel Gold Rush Continues
Written by April Howard
Tuesday, 05 June 2007

President Luiz Inacio Lula da Silva's call for Brazil to become a ³green Saudi 
Arabia² over the next few years has investors giddy and environmental and 
workers organizations panicked.

Lula is a guest at the G8 summit this week in Germany. He recently returned from
a three-day trip to India, which resulted in announcements that the two 
countries plan ³to quadruple trade to $10 billion by 2010 and boost India's use 
of biofuels.²

While dismissing claims that biofuel production is wreaking environmental havoc 
in Brazil, Lula proposed that wealthy countries should fund both biofuel 
production and environmental conservation in developing countries. "Rich 
countries have to pay for the poor countries to avoid deforestation so they can 
adopt clean models for development that don't cause pollution or greenhouse gas 
emissions," Lula said. He also said that rich countries should "start to help 
African countries to start to produce biodiesel and ethanol so that we can 
create jobs in Africa and wealth.² At the same time, a variety of government 
entities are predicting that climate change will have a significant impact on 
Brazil¹s agroindustries in the coming years.

Environmental groups such as ActionAid Brazil warn that the ethanol industry 
could repeat the mistakes of the soy industry, which turned 7 million acres of 
Amazon jungle into monoculture soy in 5 years. Many also question the 
sustainability of biofuels. Minnesota researchers published in the July 25th 
edition of the Proceedings of the National Academy of Sciences concluded that 
the production of biofuels creates a net energy loss, and that forested land 
absorbs more carbon dioxide from the atmosphere than the use of biofuels saves.

The Brazilian Landless Workers Movement (MST) shares the above environmental 
concerns, and warns that the expansion of sugar cane plantations is both 
concentrating land ownership and creating slave labor working conditions. "The 
social cost of this policy is the over-exploitation of labour with an army of 
seasonal workers who cut one ton of sugar cane for 2.50 reals (1.28 dollars) in 
precarious conditions which have already caused the deaths of hundreds of 
workers," Pernambuco state MST leader Alexandre Conceicao told IPS.

The US and European international investment funds who are buying up large 
tracts of land for ethanol production show little concern for environmental or 
labor repercussions. IPS reports that ³more than 15 billion dollars are being 
funnelled into the construction of 77 new ethanol plants that should be 
functioning by 2012, and the expansion of some of the 300 existing plants in 
Brazil. The investors include companies from the United States, Japan and 

In recent weeks, the biofuel gold rush has been eventful. The Sao Paulo Sugar 
Cane Agroindustry Union (UNICA) held the first "ethanol summit" on Monday and 
Tuesday of this week. Also of note was investor George Soros¹ announcement that 
he has invested $900 million in 3 ethanol factories in Brazil. Soros called 
himself a ³speculator,² and called for lower tariffs on biodiesel. His company 
Adeco already owns 150,000 hectares of sugar cane fields in Brazil. Large US 
corporations such as Archer Daniels Midland (ADM) and Cargill are looking for 
their slice of the pie, and many are pursuing investment opportunities in 

Brazil already produces 17 billions liters of ethanol a year, and sugarcane 
crops have expanded 13% in the last 3 years, to cover six million hectares of 
Brazilian land. The industry says that they will have to double production in 
the next 7 years to meet demand.

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