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Ethanol Blend Reduction in Brazil 'Makes Sense' Provided 90-Day Deadline is Respected, Says Brazilian Sugarcane Industry Association
Date:1/12/2010

SAO PAULO, Jan. 12 /PRNewswire/ -- According to the Brazilian Sugarcane Industry Association (UNICA), the federal government's decision to reduce the anhydrous ethanol content of gasoline from 25% to 20% must be limited to the established 90-day period.

"The government's reasons for the temporary reduction are understandable, but the move must be limited to the 90-day period only. Because of high prices, consumers who own flex-fuel vehicles are already shifting from hydrous ethanol back to gasoline, so there is no risk of pumps going dry," said UNICA's Technical Director, Antonio de Padua Rodrigues.

Hydrous ethanol is pure ethanol (E100) used in flex-fuel vehicles, which run on any mix of ethanol and gasoline. The blend reduction involves anhydrous ethanol, which is the type of ethanol that is mixed with gasoline. While hydrous ethanol contains about 5% water content, anhydrous ethanol is virtually water-free.

The decision to roll back the blend level was announced by the Brazilian government on Monday (January 11) in Brasilia, following a meeting attended by UNICA executives. The measure takes effect on February 1 for a period of 90 days. Blend reductions are not new in Brazil -- the last reduction occurred in March of 2006, when the percentage fell from 25% to 20%. The blend level was raised to 23% in November of that year, and fully reinstated at 25% in July of 2007.

Padua noted that the government should be praised for its open dialogue with the industry and for setting a timeframe for the measure, with reinstatement of the 25% blend happening as the sugarcane industry launches what will be the largest sugarcane harvest in

SOURCE The Brazilian Sugarcane Industry Association (UNICA)
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