Knowledge Network: Faculty & Research

By Daryl James, Thunderbird Magazine editor

Decades before a massive oil discovery off the coast of Rio de Janeiro, Brazil turned its attention to the power of sugarcane. Today the developing nation consumes more ethanol than petroleum. Thunderbird School of Global Management Professor John Zerio, Ph.D., led a group of MBA students to Brazil in January 2011 to see the biofuel revolution firsthand. This five-part Brazil Winterim series follows the students on their journey to the plantations, mills and research centers driving alternative fuel innovation.

Chapter 2: Sweet Versatility

One Brazilian real buys a frosty treat in the markets of Ribeirao Preto, an agribusiness center about four hours north of Sao Paulo. Street venders near the city center feed sugarcane stalks into the top of a stainless steel press, the motor whirs, and milky yellow juice pours from a spout into a cup at the bottom.

Thunderbird Winterim students watch the process for a few moments on Jan. 12, 2011, before reaching for their wallets to purchase their own samples. “Not bad,” says Joshua Niederman ’11, one of 18 students touring the plantations and research centers around Ribeirao Preto with Zerio and a guide from Sao Paulo University.

Much of the sugarcane that stretches for miles around the city ends up in the fuel tanks of Brazilian cars. The PricewaterhouseCoopers Agribusiness Research & Knowledge Center, one of the Winterim stops in Ribeirao Preto, estimates that 95 percent of new vehicles sold in Brazil include flex fuel technology.

Sugarcane also feeds Brazil’s bioelectricity industry, the country’s second-largest energy source after hydropower. Other Brazilian companies, such as Biocyle, are developing ways to produce biodegradable plastic from sugarcane. And, of course, much of the crop goes to sugar mills for traditional consumption.

Some stalks even make it to the juicing machines in Ribeirao Preto.

“Sugarcane is very versatile,” says Marco Conejero, Ph.D., manager of the PricewaterhouseCoopers center.

Sugarcane is also efficient. Corn, the main source of U.S. ethanol, stores sugar only in its kernels. But sugarcane uses the entire stalk, allowing growers to produce high yields of sugar in a limited space.

Conejero says Brazilian sugarcane can produce about 900 gallons of ethanol per acre, and the amount will double as agribusiness innovators refine the process. “We are moving in this way to take advantage of all sources of energy inside the plant,” he says.

U.S. corn growers, meanwhile, produce less than 400 gallons of ethanol per acre.

The sugarcane process also relies less on fossil fuels than in the United States. Conejero says the United States uses one unit of fossil fuel to produce 1.4 units of ethanol, while Brazil uses one unit of fossil fuel to produce 9 units of ethanol — more than six times the U.S. amount.

Although the United States remains the world’s No. 1 ethanol producer, sugarcane allows Brazil to do more with less. “In terms of sustainability,” Conejero says, “the energy balance is completely different.”

Overall, PricewaterhouseCoopers estimates that Brazil produces 37 percent of the world’s sugarcane, 24 percent of its granulated sugar and 44 percent of its ethanol using 427 mills concentrated in Sao Paulo state and coastal regions north of Rio de Janeiro.

Chapter 1: Power of Sugarcane
Chapter 3: Doing More with Less
Chapter 4: Making Tradeoffs
Chapter 5: Betting the Farm

Posted: 04|1|11 at 12:24 pm.
Filed under: Emerging Markets, Sustainability & Ethics, Zerio, John.
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