Brazil’s ethanol production programme

Last updated: 2 August 2023

Brazil’s ethanol production programme, “Proalcohol”, has helped reduce national dependence on fossil fuel imports, improving energy security and creating new industries and jobs in the process. Created in the context of the oil crisis of the 1970s and consequent spike in fuel prices, this policy aimed to boost the production of ethanol from sugarcane as a substitute for gasoline. The government provided subsidies to sugarcane producers and incentives for the purchase of cars fuelled with pure ethanol. Investments that were allocated to the local agricultural and industrial sectors generated significant productivity gains and cost reductions, and led to savings of around USD 52.1 billion in avoided oil imports from 1975 to 2002. By 2013, Brazil was one of the largest ethanol exporters, accounting for 4.5 million direct and indirect jobs and 72 000 independent farmers.

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