History of ethanol fuel in Brazil

The first use of sugarcane ethanol as fuel in Brazil dates back to the late twenties and early thirties of the 20th century, with the introduction of the automobile in the country.

After World War I some experimenting took place in Brazil's Northeast Region,[18] and as early as 1919, the Governor of Pernambuco mandated all official vehicles to run on ethanol.

Due to German submarine attacks threatening oil supplies, the mandatory blend was as high as 50 percent in 1943.

[12] After testing in government fleets with several prototypes developed by local subsidiaries of Fiat, Volkswagen, GM, and Ford, and compelled by the second oil crisis, the first 16 gasoline stations began supplying hydrous ethanol in May 1979 for a fleet of 2,000 neat ethanol adapted vehicles,[25][26] and by July, the Fiat 147 was launched to the market, becoming the first modern commercial neat ethanol-powered car (E100) sold in the world.

Changes included compression ratio, amount of fuel injected, replacement of materials subject to corrosion by ethanol, use of colder spark plugs suitable for dissipating heat due to higher flame temperatures, and an auxiliary cold-start system that injects gasoline from a small tank to aid cold starting.

A federal law was passed in October 1993 establishing a mandatory blend of 22% anhydrous ethanol (E22) in the entire country.

This law also authorized the Executive to set different percentages of ethanol within pre-established boundaries; since 2003 these limits were fixed at a maximum of 25% (E25) and a minimum of 20% (E20) by volume.

[13] As a result of supply shortages and high ethanol fuel prices, in 2010 the government mandated a temporary 90-day blend reduction from E25 to E20 beginning February 1, 2010.

[35][36] Simultaneously, the government began reducing ethanol subsidies, thus marking the beginning of the industry's deregulation and the slow extinction of the Pró-Álcool Program.

[20][33] By the beginning of 1997 Fiat, Ford, and General Motors had all stopped producing ethanol powered cars, leaving only Volkswagen (who offered the Gol, Santana, Kombi and their derivatives).

A similar fuel injection technology was developed by the Brazilian subsidiary of Delphi Automotive Systems, and it is called "Multifuel.

In March 2003, Volkswagen launched in the Brazilian market the Gol 1.6 Total Flex, the first commercial flexible fuel vehicle capable of running on any blend of gasoline and ethanol.

By 2008, popular manufacturers that build flexible fuel vehicles are Chevrolet, Fiat, Ford, Peugeot, Renault, Volkswagen, Honda, Mitsubishi, Toyota and Citroën.

[9][10][11] According to two separate research studies conducted in 2009, at the national level 65% of the flex-fuel registered vehicles regularly use ethanol fuel, and all-year-long by 93% of flex car owners in São Paulo, the main ethanol producer state where local taxes are lower, and prices at the pump are more competitive than gasoline.

[63] The bus is a Scania model with a modified diesel engine capable of running with 95% hydrous ethanol blended with a 5% ignition improver, with a Marcopolo body.

[65] During the trial period performance and emissions were monitored by the National Reference Center on Biomass (CENBIO - Portuguese: Centro Nacional de Referência em Biomassa) at the Universidade de São Paulo, and compared with similar diesel models, with special attention to carbon monoxide and particulate matter emissions.

The second bus was scheduled to operate between Lapa and Vila Mariana, passing through Avenida Paulista, one of the main business centers of São Paulo city.

[67] In November 2010 the municipal government of São Paulo city signed an agreement with UNICA, Cosan, Scania and Viação Metropolitana", the local bus operator, to introduce a fleet of 50 ethanol-powered ED95 buses by May 2011.

[67] The fleet of 50 ethanol-powered ED95 buses had a cost of R$ 20 million (US$12.3 million) and due to the higher cost of the ED95 fuel, one of the firms participating in the cooperation agreement, Raísen (a joint venture between Royal Dutch Shell and Cosan), will supply the fuel to the municipality at 70% the market price of regular diesel.

[80] The Brazilian subsidiaries of Magneti Marelli, Delphi and Bosch have developed and announced the introduction in 2009 of a new flex engine generation that eliminates the need for the secondary gasoline tank by warming the ethanol fuel during starting,[81] and allowing flex vehicles to do a normal cold start at temperatures as low as −5 °C (23 °F),[82] the lowest temperature expected anywhere in the Brazilian territory.

[84] In March 2009 Volkswagen do Brasil launched the Polo E-Flex, the first flex fuel model without an auxiliary tank for cold start.

[85][86] Since 2009, the Brazilian ethanol industry has experienced financial stress due to the credit crunch caused by the economic crisis of 2008; poor sugarcane harvests due to unfavorable weather; high sugar prices in the world market that made more attractive to produce sugar rather than ethanol; and other domestic factors that resulted in a decline of its annual production despite a growing demand in the local market.