With rising oil costs and environmental concerns has come increased pressure on the motor industry to develop an alternative and greener fuel to power the world's vehicles. But would ethanol be a viable alternative to petrol (gas)?

Ethanol is largely seen as an environmentally friendly alternative to petrol. It is made from crops such as sugarcane in Brazil and soyabean in the US, and it is significantly less polluting than petrol because it doesn't produce sulphur dioxide or lead emissions and, importantly, any carbon dioxide produced can be offset by growing more sugarcane. Cars in the UK, for instance, can currently run on about 10 per cent of ethanol in petrol, but the corrosive effect of ethanol means increasing levels above this can damage the engine if the necessary changes have not been made.

Recent moves by Brazil to export biofuels to the European market on a bigger scale have increased interest in ethanol as a possible replacement for petrol. Since signing agreements with Sweden and Japan, Brazil is now interested in developing partnerships with British and European companies. In Brazil ethanol is widely available and it makes up around 40 per cent of fuel consumption and powers over 50 per cent of vehicles. Having spent the last 30 years refining the production of ethanol from sugarcane, Brazil has now become the largest producer and exporter of ethanol in the world.

The technology for creating ethanol has been around since the 1920s, but production only took off in Brazil in the 1980s when the government looked around for alternative sources in the wake of the 1970s oil crisis and rising oil prices. During the 1980s more than 75 per cent of all motor vehicles and around 90 per cent of cars were run on ethanol. But a drop in oil prices and an end to government subsidies meant that ethanol lost it's popularity for a while. However, rising oil prices caused the popularity of ethanol to rise again a couple of years ago, and now over 50 per cent of new cars in Brazil are FFVs (Flexible Fuel Vehicles) that can be run on either pure petrol, pure ethanol or a mixture of the two.

Brazilian production of ethanol is set to rise over the next few years. In 2005 they produced 282,000 barrels of ethanol per day and the expectations are for production to rise to 442,000 barrels per day by 2010. Brazil currently exports 7,200 barrels per day to the US (who also produce their own ethanol from soyabeans). This, of course, is still a drop in the ocean compared to overall US gasoline consumption. And the question is whether or not Europe and, particularly, the UK will become a new customer for Brazil's growing biofuels industry.

We wait to see if becomes the true green alternative and, of course, how much governments - particularly in the UK - squeeze out of us by way of tax!!