In 2006 Brazil produced 16.3 billion liters (4.3 billion U.S. liquid gallons), which represents 33.3% of the world’s total ethanol production and 42% of the world’s ethanol used as fuel. Total production is predicted to reach at least 26.4 billion litres (6.97 billion U.S. liquid gallons) for 2008. Brazil’s 30-year-old ethanol fuel program uses modern equipment and cheap sugar cane as feedstock, the residual cane-waste (bagasse) is used for process heat and power, which results in a very competitive price and also in a high energy balance (output energy/input energy), which varies from 8.3 for average conditions to 10.2 for best practice production. The Brazilian ethanol program provided nearly 700,000 jobs in 2003, and cut 1975–2002 oil imports by a cumulative undiscounted total of US$50 billion. The production of ethanol is concentrated in the Central and Southeast regions of the country, which includes the main producer, São Paulo State. These two regions were responsible for almost 90% of Brazil’s ethanol production in 2004.
There are no longer light vehicles in Brazil running on pure gasoline. Since 1977 the government made it mandatory to blend 20% of ethanol (E20) with gasoline (gasohol), requiring just a minor adjustment on regular gasoline motors. Today the mandatory blend is allowed to vary nationwide between 20% to 25% ethanol (E25) and it is used by all regular gasoline vehicles, plus three million cars running on 100% hydrous ethanol, and five million dual or flexible-fuel vehicles. The Brazilian car manufacturing industry developed flexible-fuel vehicles that can run on any proportion of gasoline and ethanol. Introduced in the market in 2003, these vehicles became a commercial success, and by March 2008, the fleet of “flex” cars and light commercial vehicles had reached 5 million new vehicles sold, which represents around 10% of Brazil’s motor vehicle fleet and 15.6% of all light vehicles. The success of “flex” vehicles, as they are popularly known, together with the mandatory use of E25 blend of gasoline throughout the country, allowed Brazil in 2006 to achieve more than 40% of fuel consumption from sugar cane-based ethanol for the light vehicle fleet, and represents almost 20% of total fuel consumption in the road transport sector when trucks and other diesel-powered vehicles are considered.

Soybean oil and recycled restaurant cooking oil are in surplus, and biodiesel production uses only a small portion of each, so there is no resource constraint.

Esters are compounds of alcohol and organic acids. Fatty acid methyl ester, commonly known as biodiesel, is made by bonding methanol to animal fat or vegetable oil. The process is relatively straightforward, but must consistently achieve prescribed standards to minimize the risk of damaging expensive diesel engines.

Because it is oxygenated, biodiesel dramatically reduces air toxins, carbon monoxide, soot, small particles, and hydrocarbon emissions by 50% or more, reducing the cancer-risk contribution of diesel up to 90% with pure biodiesel. Air quality benefits are roughly proportional for diesel/biodiesel mixtures. Biodiesel’s superior lubricity helps reduce engine wear, even as a small percentage additive.

The most common use of biodiesel is as B20: -20% biodiesel, 80% diesel. It requires no engine modifications. Because it gels at higher temperatures than petroleum diesel, however, pure biodiesel requires special management in cold climates. Biodiesel contains slightly less energy than petroleum diesel, but it is denser, so fuel economy tends to fall 7% for every 10% biodiesel in a fuel blend.

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