Sugarcane vs Corn Ethanol

Clipped from en.wikipedia.org

The U.S., potentially the largest market for Brazilian ethanol imports, currently imposes a tariff on Brazilian ethanol of $USD 0.54 per gallon in order to encourage domestic ethanol production and protect the budding ethanol industry in the United States.[89] Historically, this tariff was intended to offset the 45-cent per gallon blender's federal tax credit that is applied to ethanol no matter its country of origin.[5][90][91][92] Exports of Brazilian ethanol to the U.S. reached a total of US$ 1 billion in 2006, an increase of 1,020% over 2005 (US$ 98 millions),[93] but fell significantly in 2007 due to sharp increases in American ethanol production from maize.[94][95] A recent study by Iowa State University's Center for Agricultural and Rural Development found that removing the U.S. import tariff would result in less than 5% of the United States’ ethanol being imported from Brazil.[96][97] Set to expire at the end of 2010, the $USD 0.54 per gallon tariff and $USD 0.45 per gallon blender’s credit have been the subject of contentious debate in Washington,DC with ethanol interest groups and politicians staking positions on both sides of the issue.[98][99][100][101][102]

Brazil's sugar cane-based industry is more efficient than the U.S. corn-based industry. Sugar cane ethanol has an energy balance seven times greater than ethanol produced from corn.[3] Brazilian distillers are able to produce ethanol for 22 cents per liter, compared with the 30 cents per liter for corn-based ethanol.[118] U.S. corn-derived ethanol costs 30% more because the corn starch must first be converted to sugar before being distilled into alcohol.[78] Despite this cost differential in production, the U.S. does not import more Brazilian ethanol because of U.S. trade barriers corresponding to a tariff of 54-cent per gallon, first imposed in 1980, but kept to offset the 45-cent per gallon blender's federal tax credit that is applied to ethanol no matter its country of origin.[5][90][91][92]

Sugarcane cultivation requires a tropical or subtropical climate, with a minimum of 600 mm (24 in) of annual rainfall. Sugarcane is one of the most efficient photosynthesizers in the plant kingdom, able to convert up to 2% of incident solar energy into biomass. Sugarcane production in the United States occurs in Florida, Louisiana, Hawaii, and Texas. The first three plants to produce sugarcane-based ethanol are expected to go online in Louisiana by mid 2009. Sugar mill plants in Lacassine, St. James and Bunkie were converted to sugar cane-based ethanol production using Colombian technology in order to make possible a profitable ethanol production. These three plants will produce 100 million gallons of ethanol within five years.[119] By 2009 two other sugarcane ethanol production projects are being developed in Kauai, Hawaii and Imperial Valley, California.[120] Read more at en.wikipedia.org