Financial Times

Brazil to host biofuels meeting as crisis threatens industry


SAO PAULO, Nov 14, 2008 (AFP) - Brazil is to host an International Conference on Biofuels next week that will see the South American nation promoting its massive ethanol output -- even as falling oil prices threaten exports.

The week-long meeting in Sao Paulo is to be attended by officials from up to 40 countries, most of them represented at the ministerial level. Brazilian President Luiz Inacio Lula da Silva on Monday will open the event, which will begin with three days of expert discussions on energy safety and climate change.
Brazil is the biggest exporter of ethanol and the second biggest producer, after the United States.

When oil prices were high, just a few months ago, the country hoped to boost overseas sales of the fuel it makes from sugarcane. It especially eyed the European Union, which has proposed having biofuels make up 10 percent of the bloc's total fuel consumption by 2020.

But now with the economic crisis sending oil prices below 60 dollars a barrel, political impetus around the world to adopt biofuels is waning. “With the current price levels for oil, (ethanol) alcohol is losing competitiveness in the export market,” Alexandre Pirillo Franceschi, boss of biofuel company Usina Alvorada, told the Folha de Sao Paulo newspaper this week.

As interest flags in ethanol, a debate that has raged over the past year on food versus biofuel has lost its force. The UN Food and Agriculture Organization was at the forefront of those criticizing countries for turning farmland over to the cultivation of biofuel crops at the expense of food crops.

Brazil rejected that characterization, at least as it was concerned, highlighting data showing that its use of sugarcane as the base for its ethanol meant little competition with food farming. “Ethanol was blamed as being responsible for problems such as hunger in the world and climate change,” Andre Amado, head of the energy department in Brazil's foreign ministry, said.

But, he said, the conference will show that “biofuels are the cleanest alternative source of energy in the world.”However, a collection of Brazilian farm organizations, leftwing associations and environmental groups have announced their own parallel meeting to challenge the Brazilian government's arguments in favor of biofuels.

The counter seminar “aims to question the myths around the 'sustainability' of industrial ethanol production, as well as to deepen the debate on the role of agroenergy in the food, energy and climate crisis,” they said in a joint statement.

Their event will look at allegations of slave labor, environmental damage and land-grabs leveled at the Brazilian ethanol industry, they said, adding that they intend to present their position to the official conference.

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