Growing global demand for cleaner vehicle fuels and the possibility of falling farm subsidies in Europe have sparked several investments in Brazil's ethanol industry. Brazilian and foreign investors are set to invest as much as $3bn (€2.3bn, £1.6bn) over the next five years to increase ethanol production by 40 per cent, according to Unica, the S'o Paulo sugar cane federation. Current ethanol production is about 15bn litres a year. Huge water and land supplies help make Brazil the world's largest, cheapest producer of ethanol, derived locally from sugar cane. Production costs for one cubic metre average $160, says FNP, an agricultural consultancy in Sa~o Paulo. In the US corn-based ethanol costs roughly 40 per cent more and Europe's beet-based ethanol roughly double. With far lower emission levels than hydrocarbons, demand for ethanol is expected to surge, with many parts of Europe, Asia, and the Americas legislating for ethanol or other clean fuels to be mixed into petrol. In Brazil, ethanol makes up between 25 per cent and 100 per cent of automotive fuel. "Ethanol is becoming a global commodity and Brazil is its most competitive producer," says Luiz Guilherme Zancaner, president of Unialco, a cane distiller and refiner.
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