5 Low-cost Biofuels



Sugarcane's biggest success story began decades ago in Brazil. In response to the oil shortages and high prices as a result of the 1973 Mideast oil embargo, the Brazilian government threw its weight behind sugarcane ethanol. The government required its major oil company to use ethanol, provided $4.9 billion in low-interest loans to encourage companies to invest in it and initially even offered subsidies to make ethanol inexpensive. Today, the subsidies are no longer needed, and more than 70 percent of new cars sold in Brazil are "flex fuel" vehicles, which run on anywhere from 100 percent to 25 percent ethanol [source: Hofstrand]. Millions of acres of sugarcane are grown in Brazil, but many countries, including the United States, don't have this option because they don't have the climate for it like Brazil. Brazil has just the right weather to grow sugarcane, and enough land to grow it in large enough amounts for it to be a good source of fuel for that country.