CNBC’s Yergin: What the U.S. Can Learn From Brazil About Ethanol

There was a lot of discussion about technology, markets, logistics, policies and regulation, and — of course — about cellulosic ethanol, the “second generation” ethanol. But the big underlying question was whether and when a global traded commodity market in ethanol would get going. If it does, Brazil will likely be the dominant supplier. In CERA’s own new renewables study, we estimate that, in such a market, 70% to 80% of traded biofuels would come from Latin America, primarily Brazil.

People in the rest of the world are beginning to see that opportunity. Three years ago, ethanol was not on the international investment agenda. Today a good deal of money from the United States, Europe, and Japan is flowing into Brazilian ethanol, often in partnership with the family businesses that are characteristic of the Brazilian business. These are investors who are betting on a global market. George Soros stirred up quite a lot of attention at the conference when he announced that he is investing $900 million in Brazilian ethanol.

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