Petrobras cricizes US ethanol tariff, disgarees with Lula about effect of biofuels on food availability

In Brazil, the head of Petrobras, the Brazilian state oil company, said the United States should eliminate or reduce the tariff on ethanol imports because US use of corn for ethanol was driving up world food prices.

Petrobras is on the move in Brazilian ethanol production.

Last month, the state-owned  oil giant announced that they would construct a pilot cellulosic ethanol plant by 2010. The pilot plant would produce 740 gallons of ethanol from 10 tons of sugar bagasse.

Earlier in October, Petrobras announced that it would establish Suape, a deepwater port in the northeastern state of Pernambuco near Recife, as its base for ethanol exports to Europe. The company has so far signed agreements for export of 2 million gallons of ethanol to Europe. The company also is considering the construction of two ethanol pipelines, and announced plans to develop 20 sugar ethanol plants via multiple partnerships in Goias and Mato Grosso states and a partnership with Japanese trading company Mitsui. Each plant is projected to produce 50 Mgy of sugar ethanol and the first will be ready for operation in 2010.

In a recent address at the UN, Brazilian President Luiz Inacio Lula da Silva defended against suggestions that biofuel production causes food shortages. “The problem with world hunger is not a shortage of food but a shortage of income, ” Lula said.  p

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