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More than 100 countries import Brazilian sugar. It is important to highlight that practically all of Brazil’s exports are negotiated in the free market. Preferential quotas applied to Brazil in some countries are irrelevant if compared to the total volume of Brazilian sugar sales. The United State and the European Union import less than 210.000 tons of Brazilian sugar under preferential quotas, which represents less than 1% of Brazil’s total exports.

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Principally:
• Providing institutional support for the development of the sugar and ethanol sector;
• Providing institutional support for the domestic sugar, ethanol and bioelectricity markets;
• Working to expand global awareness about the socio-economic and environmental importance of using biofuels; and
• Promoting the opening of new markets for the sector.
UNICA also seeks to improve the structure of the industry, specifically by reinforcing the sector’s capacity to manage its own affairs, a process that started with the end of regulation in the 1990s; by improving sector statistics and the means of production, commercialization and financing; and by perfecting the institutional environment in which the sector operates. As a move to further its international objectives, UNICA opened its first international office in Washington DC at the end of 2007, and through 2008 plans opening two more in Brussels (Belgium) – to be close to the headquarters of the European Union – and in an Asian location yet to be decided.

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The UNICA Board meets weekly and comprises 25 representatives of member companies plus the Director-President, all of whom are elected by the Annual General Meeting. The Director-President also holds the function of CEO and leads a team of professional directors and consultants in the areas of economics, the environment, technology, bioelectricity, specifications and quality, the domestic market, the international market, socio-environmental responsibility, legal affairs, institutional relations, public relations and communications. Board members also participate in Committees which discuss and develop specific questions which may then be approved by the Board. There are eight Committees: Management and Policy, Strategic Planning and Follow-up, Logistics and Infrastructure, the Environment, Technology and R&D, Communication and International Affairs.

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Sugarcane planting is one of the earliest economic activities recorded in Brazil after its discovery by Portuguese sailors in 1500. The first sugarcane plants arrived in 1532, brought by sailors led by Portuguese nobleman and explorer Martin Afonso de Souza, and spread rapidly thanks to the fertile soil, the tropical climate and slave labor shipped from Africa. Sugar was then in great demand in Europe, where it would not grow in most regions. This made sugar a very valuable commodity, comparable to gold and precious stones. Sugar from the Brazilian colony was exported to Portugal, which grew rich as it sold on the product to the rest of Europe. The main producing region was in the Northeast of Brazil in the Hereditary Captaincy of Pernambuco, site of Brazil’s first concentration of sugarcane plantations. Today, the Northeast produces just over 10% of Brazil’s sugar and ethanol, while well over 80% comes from the South, Southeast and Center-West regions. São Paulo State in the Southeast is by far the biggest single producer. For more information about the history of sugarcane in Brazil, click here.

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In the Center-South of the country, a region which produces almost 90% of the country’s sugarcane, the harvest normally lasts eight months from April through November. In the Northeast, which today produces just over 10% of the national sugarcane crop, the harvest lasts seven months from September to March. Ethanol production from sugarcane also takes place during this period, when there is a supply of cane, meaning that the volume of fuel produced in that seven-to-eight-month period must be sufficient to meet national demand for the whole year. This is because cane cannot be stocked after cutting; it must be processed within 72 hours to avoid deterioration due to the action of bacteria and fermentation. Producers use the inter-harvest period for maintenance. Sugarcane is a semi-perennial crop that can be cut without replanting for between five and seven consecutive annual harvests. After that, producers sometimes rotate another crop for a year before replanting with sugarcane.

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Brazil is the world leader in sugarcane production, processing roughly 487 million tonnes in the 2007-08 harvest period. Roughly 90% of this total came from the major producing regions in the Center-South, and roughly 10% from the Northeast. In the past Brazil used virtually all of its sugarcane to make sugar, but over the last three decades sugarcane has become a new paradigm for clean, renewable energy. Sugarcane now makes an important contribution to the sustainability of the planet and to the fight against global warming, because it is today the most efficient raw material from which to produce ethanol, obtained from the sugarcane juice, and bioelectricity, obtained from the biomass. Sugarcane yields two main types of biomass: the bagasse, which is the fibrous residue remaining after the cane has been crushed to extract the juice; and the straw, which includes the leaves and tips of the stalks. World sugarcane production stands at around 1.4 billion tonnes and comes mainly from tropical regions, in particular developing countries in Latin America, Africa and Southeast Asia. Expanding global production, consumption and principally trade of ethanol, in particular ethanol made from sugarcane, is likely to generate income and benefit rural producers in some of the world’s poorest countries. The Brazilian sugar and ethanol industry bills some US$20 billion a year, with revenue from the 2007-08 harvest being derived roughly 44% from sugar sales and 54% from ethanol sales, with 2% coming from the sale of electricity to the domestic market. Some 64% of all sugar produced was exported, while ethanol sales are predominantly to the domestic market with just 15% of production going to export.

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The basic difference lies in the water content. Anhydrous ethanol contains around 0.5% of water by volume, while hydrated ethanol can have around 5%. Anhydrous ethanol is used to mix with gasoline, while hydrated ethanol is sold as it is in special pumps at filling stations. Hydrated ethanol is produced directly from the distillation columns in the ethanol production plants, while anhydrous ethanol is obtained by subjecting hydrous ethanol to a further processing stage to remove virtually all the water.

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Ethanol consumption has expanded continuously in Brazil, driven mainly by the growth in the fleet of flexfuel vehicles (see below). In 2007, ethanol accounted for 40% of the country’s total consumption of liquid fuel used by cars and light commercial vehicles, and 44% of fuel consumption by those vehicles that are capable of consuming either E-25 gasoline or hydrous ethanol. The difference relates to the small proportion of the light-vehicle fleet that is composed of diesel-powered vehicles or imported cars which cannot use ethanol. Taken together, ethanol and sugarcane bagasse (the solid residue of the cane after it has been crushed, which is burned in boilers at sugar mills and ethanol production plants to produce heat and electricity) represent 15% of Brazil’s total internal energy supply. In addition to the economic and environmental benefits, Brazilian ethanol production since 1975 represents an accumulated saving of US$85.8 billion in fuel imports at 2007 prices (source: Datagro Consultancy).

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These were launched in Brazil in 2003. They have engine management systems that precisely identify the presence of gasoline and ethanol, in any proportion, and automatically adjust the operation of the engine to accept the fuel mixture it is receiving at any given moment. There are various types of flexfuel technology. In the United States, for example, flexfuel vehicles more commonly have an ethanol sensor in the fuel tank itself or in the fuel line leading to the engine, while the Brazilian system uses a sensor that measures the degree of oxygen present in the exhaust. The difference between the two systems is determined by the climatic characteristics and the fuels available in each country. In the United States, Canada, Sweden and other countries that suffer from harsh winters, vehicles use pure gasoline or gasohol that contains up to 70% ethanol (E70) during the winter and up to 85% ethanol (E85) during warmer months. In Brazil, all “regular” gasoline contains between 20% and 25% of anhydrous ethanol (E20-E25), and there are also special pumps at all filling stations offering pure ethanol (in fact, pure hydrated ethanol, E100). In practice, therefore, flexfuel vehicles in Brazil run on anything from 20% to 100% ethanol (E20-E100). The flexfuel concept makes it possible to use ethanol in countries where the distribution infrastructure is less widespread, for example the United States, and it also gives the consumer the freedom to choose his fuel in countries like Brazil where ethanol is more widely available. Ethanol pumps were installed at all filling stations throughout Brazil starting 1976, at the beginning of the PROÁLCOOL program (see above). Today, all of the country’s roughly 33,000 filling stations have at least one pump offering pure hydrated ethanol (E100). At the start of 2008, the Brazilian car buyer could choose between 63 flexfuel models produced locally by 10 of the world’s leading vehicle builders. Flexfuel motors are also being adopted in hybrid vehicles that operate with twin propulsion systems that have internal combustion and electric motors. In this case the flexfuel system offers the potential to further reduce emissions of CO2 and other pollutants, in particular those that cause global warming.

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No. Flexfuel vehicles are designed to run on any proportion of gasoline and ethanol without causing damage of any kind to the motor and without any drop in efficiency or performance. The consumer can choose either fuel when he fills up, no matter which he chose the last time and no matter how much of the previous fuel still remains in the tank. There is also no need to alternate fuels or to maintain any specific proportion between them. There are some residual myths among Brazilian drivers about the performance of modern flexfuel vehicles when running on ethanol (E100), but these are a hangover from the technical problems that affected the very earliest ethanol-powered vehicles in the first years of the PROÁLCOOL program over two decades ago. One such myth is about the difficulty of starting the engine on a cold winter morning. This problem does not arise with modern flexfuel vehicles which automatically draw gasoline from a small auxiliary tank to facilitate a cold start.

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In most Brazilian states, yes. The Brazilian consumer has learned a lot in the three decades since the PROÁLCOOL program was introduced, and this process has continued since the introduction of flexfuel vehicles in 2003. In the early days of the PROÁLCOOL program, the consumer had to choose between a gasoline or ethanol powered vehicle at the time of purchase, and he was then committed to using the same fuel as long as he had the vehicle. Today, however, that dilemma has been eliminated for the millions of drivers who have chosen to buy flexfuel vehicles. In general, the calculation that many Brazilian drivers make is that it is better to fill up with ethanol when it costs 70% or less than the price of gasoline. When the price is significantly over that level, ethanol tends to less favorable. With the exception of a few states where the ICMS tax is higher, ethanol normally sells at below this 70% benchmark level. Click here for a map showing the price of ethanol and gasoline and the tax levels in different Brazilian states.

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Bioelectricity is the cogeneration of electrical energy using biomass as the primary energy source. In the sugar and ethanol industry this means producing two forms of energy, thermal and mechanical, by burning biomass composed of sugarcane straw and bagasse. With Brazilian sugarcane production reaching approximately 487 million tonnes in the 2007/08 harvest year, the potential for bioelectricity generation using existing technology is around 1,800 MW.

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After sugarcane has been harvested it is crushed to extract the juice which is used to make sugar or ethanol, and bagasse is the fibrous residue of the crushed stalk. Sugar mills have for a long time used some of the bagasse to generate bioelectricity. Burning this residue in boilers has made sugar mills and ethanol plants self-sufficient in electricity, eliminating the need to buy power from the distributor. More recently there has been a growing trend that allows producers not just to seek electrical self-sufficiency but to generate large surpluses of power that can be sold on the open market. Sugar and ethanol producers can increase their bioelectricity production by using high-efficiency boilers to generate significant power surpluses for sale to the electricity distributors.

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Sugarcane straw can be used for bioelectricity generation as additional biomass to supplement the bagasse, which is the residual material from sugarcane after it has been crushed. Both straw and bagasse can be burned in high-efficiency boilers to generate large surpluses of power that can be sold to electricity distributors. Until the advent of mechanized sugarcane cutting, the cane straw was burned off in the field before manual harvesting. With mechanization, the straw is left on the ground to protect the soil against erosion and pests. As mechanized harvesting increases – today it is used for 45% of the sugarcane crop nationwide – part of the straw will continue to be left on the ground and the rest will be collected and used as biomass to generate bioelectricity.

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Looking ahead, Brazil’s 2020-21 sugarcane harvest is estimated at one billion tonnes. This represents the potential to generate 7,600 MW using just the bagasse, or 14,000 MW if the straw is used as well. Other countries face different situations. India, for example, produces a volume of sugarcane that is comparable with Brazil, but it is used in many small-scale, low-productivity situations with nothing like the degree of industrialization that Brazil has achieved. In countries with levels of industrialization similar to Brazil, for example South Africa, Australia and Thailand, the problem is low volumes of sugarcane production. Other countries in Central and South America are relatively small producers.

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Sugarcane is a renewable raw material. It grows fast with an annual harvest, and has a high capacity to absorb and fix atmospheric carbon dioxide (CO2). This is the main greenhouse gas responsible for global warming. As a plant with a production life-cycle of at least five years, sugarcane demands lower amounts of fertilizers, herbicides and pesticides – products which require fossil fuels for their production. Another advantage is that the architecture and characteristics of sugarcane roots allow for efficient capture of soil nutrients and absorption of soil carbon, two factors that help reduce the generation of greenhouse gases. Given the conditions prevailing in Brazil, ethanol offers high energy efficiency because its production requires little consumption of fossil fuel. This also contributes to reducing the emission of greenhouse gases. Putting it simply – for every unit of fossil energy consumed in the ethanol production cycle, more than eight units of renewable energy are produced. In the future, it is likely that this ratio can reach 11 units. According to the US Department of Energy the production of gasoline and diesel, in addition to resulting in non-renewable fuels, offers negative energy efficiency because each unit of fossil energy consumed in the production cycle generates less than that of fossil energy – roughly 0.8 units. The International Energy Agency estimates that the production and use of ethanol in Brazil allows for a reduction of more than 80% in the greenhouse gases that would have been released into the atmosphere by using gasoline.

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The energy balance of a fuel is a practical way to know how much energy is obtained, in exchange for each unit of energy consumed in the production of that fuel. The values must be calculated in some recognized measure of energy, for example Joules, Kilowatts, Kilocalories or BTUs. In the case of Brazilian sugarcane ethanol, recent studies by Prof. Isaías Macedo of the São Paulo State University at Campinas (Unicamp) show that for every Joule of fossil energy consumed in the production process, including planting and industrial processing, 9.3 Joules are obtained in the form of renewable energy. This means that sugarcane ethanol offers an extremely positive energy balance. In the case of gasoline or diesel, the energy balance can be said to be negative because for every one Joule of fossil energy consumed in the production process, including the prospecting, transportation and refining of petroleum, just 0.8 of a Joule of fossil energy is obtained. And unlike ethanol, the resulting fuel is not renewable.

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The demand for certified products is an important global trend. The idea is to guarantee consumers that the productive processes of certified products take into consideration social and environmental aspects that clearly include the three pillars of environmental, social and economic sustainability. In the case of biofuels, and particularly sugarcane ethanol where Brazil is the world leader, it is essential that discussions about certification systems be conducted in multilateral, multi-stakeholder forums. Putting it simply, all interested parties must be involved. That is the only way to move ahead legitimately and transparently to define the principles, criteria, indicators and methods of evaluation for all the technological, environmental, social and economic questions relating to biofuels production. UNICA is in favor of creating a global forum to bring together biofuels producers in different countries to design a system for the socio-environmental certification of ethanol. It would be a single system that includes all raw materials used to make ethanol, including sugarcane, maize, beetroot, wheat and residues. Only a global, multi-stakeholder initiative can avoid a proliferation of various unilateral certification processes, some of which may conceal different and less productive motives. Unilateral certification systems may for example be inspired for protectionist reasons, by  countries seeking to impose non-tariff barriers on the international trade in biofuels.

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The Agri-Environmental Sugarcane Protocol is an agreement that was signed June 4th, 2007 between the São Paulo State government and UNICA, representing producers of sugar, ethanol and bioelectricity in the state. It brings forward the legal deadlines to eliminating the burning of sugarcane straw prior to harvesting. Under the terms of a 2002 São Paulo State law, all sugarcane burning must end by 2021 in areas where the terrain allows for mechanized harvesting, and by 2031 in all other areas. The Protocol determines that all burning must cease in São Paulo by 2014 in areas where mechanized harvesting is possible. In areas where mechanization is currently not possible, the deadline to stop burning is brought forward by no less than 14 years, to 2017. Should mechanization still be impossible after 2017, such areas shall cease being used for sugarcane. A further determination of the Protocol is that after November of 2007, all new sugarcane plantations shall be created only in areas where it is possible to use 100% mechanical harvesting, with zero crop burning. Controlled burning has traditionally been used in sugarcane plantations to get rid of the straw prior to manual cutting, but the practice causes atmospheric pollution, as well as wasting potentially valuable biomass. The gradual elimination of burning and of manual cutting will allow part of the cane-cutting workforce to be retrained and employed in an organized way in the sugar and ethanol industry. Ten months after the Protocol was signed, 141 of the 170 sugarcane mills and ethanol plants in São Paulo State had signed up voluntarily.

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The sugar and ethanol industry is one of Brazil’s most important sources of job creation and currently employs around one million people. In the Center-South region the sector employs more than 400,000 workers, providing them with a decent wage and full labor rights as determined by law. Workers also receive additional social benefits that vary from company to company. A great many people working in the sector have fairly low qualifications, meaning that they would have difficulty finding work in manufacturing industry or in services. Manual sugarcane cutting is an agricultural activity, but among the companies that are members of UNICA the average wage is at least twice the national minimum wage. It is also higher than the average wage for all other agricultural crops that employ manual workers. Basic labor relations in Brazil are covered by a vast framework of legal rules, and in the sugarcane and ethanol sector there are also several years of collective bargaining agreements negotiated between the companies and the workers’ unions. The growth and development of the sector has created new employment opportunities at a rapid pace. One consequence is that there is a growing demand for specialized professionals to perform higher-quality, better-paid functions. In most of the region covered by UNICA, manual sugarcane cutting is due to be phased out by 2014 under the terms of the Agri-Environmental Sugarcane Protocol signed between UNICA and the São Paulo State Government (see above). This agreement provides for mechanized harvesting to be introduced in most areas of São Paulo State by 2014, and by 2017 in the minority of areas where mechanization is not possible using current technology. In practice this means that virtually all of the sugarcane harvest in São Paulo will be mechanized by 2014. In the 2007/08 harvest year roughly 40% of sugarcane in the state was cut mechanically, and it is estimated that this will rise to 70% by 2010.

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The impact will be significant, and efforts are already under way to make the change-over less traumatic. Business leaders, various levels of government and workers’ representatives are involved in creating training and requalification programs for people employed in the sector. At the end of 2007, a total of 189,600 people were employed as sugarcane cutters in the state of São Paulo. Roughly 40% of these were migrant workers who come from other regions of Brazil to work in the São Paulo sugarcane fields during the harvest. Manual harvesting is due to be completely replaced by mechanical cutting throughout São Paulo State by 2017, thanks to the gradual implementation of the Agri-Environmental Sugarcane Protocol signed between UNICA and the São Paulo State Government in 2007 (link para pergunta+resposta anterior). On the other hand, mechanical harvesting is employing a growing number of workers. Some 15,500 were employed in mechanical cutting in the 2007-08 harvest year, and projections are that this will rise to 59,500 by 2015-16 and 70,800 by 2020-21. The number of workers employed in the industrial phases of production in the sugar mills and ethanol plants stood at 55,300 in 2006-07, projected to rise to 68,300 by 2015-16 and 75,300 by 2020-21. The projections for 2020 thus point to a loss of 114,000 jobs and a gain of up to 80,000 jobs, with the proviso that the new jobs will demand more qualified workers receiving higher wages.

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