Ethanol needs significant investment to meet green fuel mandates
Czarnikow, one of the London’s oldest commodity traders, says sugar cane derived ethanol has the potential to become a super biofuel, but only if there is significant investment in production and infrastructure.
Analysts at Czarnikow, which produces a monthly report on biofuels, say government mandates for renewable energy, which are expected to be debated at this week’s Copenhagen summit, can only be satisfied if money is spent on production and infrastructure.
Toby Cohen, head of research at Czarnikow Group, says ethanol derived from sugar cane has the capacity to become the world’s leading biofuel, but there has to be considerable investment.
Czarnikow, which has been in the sugar market for close to 150 years, has been trading physical ethanol since 2005.
Global trade in ethanol is currently just four billion metric litres, but it is expected to dramatically grow in line with rapidly expanding demand.
Czarnikow believes cane-based ethanol is the best solution for world biofuel needs. Although ethanol production to meet demand from the transport industry has more than tripled between 2000 and 2007 from 17 billion to more than 52 billion litres, the global drive for green biofuels will continue to meet the need for much greater ethanol production. Brazil is the global leader in cane based ethanol production.
Cohen says: “Sugar cane based ethanol can play a significant role in reducing greenhouse gas emissions as part of the global response to climate change, providing the right sort and level of investment is made. Sugar cane derived ethanol provides one of the most effective ways of supplying the world’s demand for green fuel.”
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