National Petroleum Agency sets up working group to expand regulation of Brazil’s ethanol market

A recent shortage of biofuel has brought about the creation of a working group to assist in regulating Brazil’s ethanol market. The new group will be under the direction of Brazil’s National Petroleum Agency (ANP).  The ANP has previously been responsible for the distribution and sale of ethanol, but will now regulate ethanol mills producing sugar cane biofuel.  A spokesperson for the ANP said, “We are going to create rules for the industry at the production level, and the time-frame for when those rules will need to be implemented.”   In April, the price of ethanol rose dramatically, causing increases in the prices of fuel at the pump.  Brazil has mandates for gasoline to contain a minimum amount of ethanol. Flex-fuel cars in use in Brazil use pure ethanol alone as fuel.  High sugar prices have also contributed to the problem because sugar cane is used as the feedstock for ethanol production and with the high prices of sugar, some producers have opted to produce sugar for the food markets instead. (May 7, 2011)