The signing of an alliance between Brazil and the US on Friday to cooperate in the promotion of ethanol has greatly boosted the prestige of the Latin American nation, but at the same time it has raised a number of tough questions such as, "if Brazil can do it, why can't we?"
Many believe Brazil's example in promoting ethanol demonstrates to the world what a determined nation can do to reduce its dependence on petroleum. But the fact is, there are many yet-to-be-resolved questions or myths about ethanol, even though it does have an important part to play as an alternative energy source of the future.
Certainly, Brazil deserves credit for its leadership in biofuel development. Its sugar cane-based ethanol production began as a large and costly government project in the early 1970s. It has now grown to support a sizable number of jobs at home and has made Brazil the world's second-largest ethanol producer -- after the US -- and the world's only major exporter of biofuel. Brazil has more than 30,000 stations nationwide to provide pure ethanol fuel and gasoline that is blended with 20 percent to 25 percent ethanol. Eight out of every 10 new cars in Brazil are capable of running on ethanol.
Brazil's example is encouraging, but it does not mean that nations like Taiwan can rely solely on alternative fuels like ethanol when seeking to greatly reduce reliance on oil. Ethanol is certainly a valuable part of the mix, but when you consider that Brazil still consumes far more petroleum than it does ethanol, while in the US ethanol currently only comprises about 4.2 percent of gasoline supply it is obvious that ethanol is not the panacea to the world's future fuel needs.
But Taiwan does need to accelerate its development of alternative energy sources in view of continued high oil prices, stricter restrictions on greenhouse gas emissions and the important issue of energy independence.
The government has acknowledged the desirability of biofuels and earmarked NT$300 million (US$9.1 million) for work in this regard. Government-run laboratories have researched the use of grain-based additives in gasoline and have found that producing ethanol from sweet potatoes is cheaper and more energy efficient than sugar cane and rice straw. Meanwhile, a scheme that will see government vehicles in Taipei City run on ethanol gasoline is set to go ahead this year, before the fuel becomes available to the public in 2011.
But this is way too slow and close scrutiny of the development of the nation's energy industry shows that any potential ethanol industry in Taiwan appears risky. The government has still not canvassed opinion from the business sector on the possibility of establishing a commercial ethanol industry and it has yet to work out plans with automobile makers to produce vehicles that can run on gasoline and ethanol mixes.
Before jumping on the ethanol bandwagon, the government needs to consider how to prevent any possible increase in demand for sweet potatoes for fuel production from driving up the price to the disadvantage of consumers. It also has to investigate the possible environmental pros and cons, for example whether grain-based ethanol production releases more greenhouse gases than gasoline usage.
The story of Brazilian ethanol shows we in Taiwan still have a long way to go. It will be many years before we can use alternative energy to replace oil.
In the meantime, if the government is really serious about improving the nation's energy independence and reducing greenhouse gas emissions, what it should do is further liberalize the energy market as Brazil has done, and most importantly, begin serious energy conservation moves now.
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