Putting an end to barriers in developed nations would help eliminate a ‘paradox’ that leaves an excess supply of ethanol in Brazil and a „hunger for biofuels across the world,” he said at the Ethanol Summit in Sao Paulo. The seminar was aimed at studying the global market for alternative fuels. The United States produces ethanol from corn, while Brazil makes its variant from more energy-efficient sugar cane.
Regardless of the potential market risks, Soros said ethanol is „competitive with gasoline” as it’s much more environment-friendly, and that he plans to continue investing in its production. Brazil could increase its ethanol production ten-fold, but there are problems to overcome, Soros said. The Brazilian market for ethanol is almost saturated, so exports are essential for industry growth. But trade barriers from other countries dampen exports, the investor said.
Soros accused Washington of protecting US corn producers with its tariffs on ethanol, regardless of efficiency in terms of energy. He noted that the energy conversion of ethanol is tiny, and that sugar cane delivers eight to nine times more energy per unit. The Hungarian-born Soros, who made the bulk of his fortune through financial speculation and is a bitter critic of US President George W. Bush, said he is now „a speculator in ethanol.”
The United States and the European Union levy high tariffs on Brazil’s ethanol, which makes it expensive. The question is „how to open up the market in the USA, Europe and Japan,” and how „to create an environment with stable prices,” Soros said. He believes that politicians in the US and Europe will eventually reduce or eliminate the tariffs that make Brazilian ethanol exports expensive as the world turns increasingly to biofuels over fossil fuels. He said he hopes the issue of tariffs is solved, „to make investment in ethanol really viable.”
Brazil is the second-largest producer of ethanol in the world after the US, but is the No. 1 exporter. The two countries together produce over 72% of the world’s ethanol. (monstersandcritics.com, people.com.cn)
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