Falling demand for hydrated ethanol (E100) was compensated by an increase in the use of anhydrous ethanol mixed with gasoline, thanks to the expansion of Brazil’s light vehicle fleet. By then, in 25 years of large scale use of ethanol, Brazil had developed engine technologies and distribution logistics that were unprecedented in the world. The network of fueling stations in which pure ethanol could be purchased reached 28 thousand.

In March of 2003, Flex-Fuel vehicles were introduced. These could run on ethanol, gasoline or any mixture of the two, thanks to technology that could identify the precise fuel mixture in the tank at any given time, and adjust engine performance to match. The novelty led to a new wave of growth in the sugarcane industry, which was helped along by concerns surrounding the availability and cost of fossil fuels and growing fears about the environment and global warming. All of these combined to make ethanol an increasingly viable and important renewable fuel alternative, for Brazil and the world.