I promised Unica would get a blog and true to my word, here it is!

Unica are a Brazilian sugar cane company who speak on behalf of sugar cane producers around the world, primarily in Brazil where they represent around 60% of the US$28billion sugar cane sector. They primarily deal with ethanol, sugar and bioelectricity, but have also been branching out into bioplastics (such as those used in the Coca Cola in their new range of 'eco bottles') and even jet fuel.

Unica came about when they saw a market opportunity: in response to the first oil crisis in  the 1970s the Brazilian government launched the 'proálcool' (pro-alcohol) scheme, which stipulated all petrol must be blended with 5% ethanol. This ensured long-term demand for the product, thus spawning many more sugar cane farms and thus Unica. The figure of 5% has since risen to 25%.
The interest in ethanol is so great because it can be used as a fuel for cars- with oil stocks dwindling and world demand for petrol ever rising, this is obviously an avenue worthy of exploring. In Brazil especially this isn´t just an idea, but a reality: all petrol stations by law must offer at least one pump that puts out pure ethanol. Ethanol costs around R$1.25 (45 pence ish) per litre compared to the R$2.25 (80 pence ish) for a litre of petrol. On top of this, by law all petrol is 25% ethanol- Ethanol as a fuel when is sustainable and produces around 90% less carbon emissions than traditional petrol, meaning that Brazilian cars are some of the greenest in the world. Surely driving a car on ethanol is a no-brainer then? Not necessarily. Ethanol is less efficient as a fuel than petrol- the figure given to us in the Unica presentation was a litre of ethanol will get you as far as 0.7 litres of petrol (which is, remember, 25% ethanol in Brazil), however there is probably a degree of positive spin in this- my host Allexia believes the figure to be more like 1 litre of ethanol= half a litre of 75%petrol25%ethanol, which at current prices wouldn´t be a viable economic choice for consumers.

The majority of new cars produced in Brazil, 90% are now 'flex-fuel' meaning they can run on either ethanol OR petrol- and these are not crappy Brazilian cars we´ve never heard of, almost all major carmakers produce flex-fuel motors: GM, Ford, Toyota, Honda, Volkswagen, (these are everywhere in Brazil for some reason) Mitsubishi, Audi, BMW, etc., and along with this the first flex-fuel motorcycles are just being brought out. 40% of all cars on Brazilian roads are now flex-fuel, and a small fraction are ethanol only, and the 10 millionth flex-fuel car was sold in Brazil in March of this year.

Brazil is a country that takes climate change and greenhouse gas emissions more seriously than most- this is reflected by the above government policies (obligatory ethanol pumps and enforced ethanol blending with fuel) and by the energy matrix of Brazil, which has been shown to us at both the Unica and Petrobras talks. The matrix is as follows:

1. Petroleum- 38%
2. Sugar Cane- 17% (renewable)
3. Hydro Electric Power- 13% (renewable, and free once installed)
4. Wood and Other Biomass- 11% (renewable)
5. Natural Gas- 10%
6. Coal- 6%
7. Other renewable energy sources- 3%
8. Nuclear Power- 2%

This amasses to 46% of Brazil's energy being renewable- this compares favourably to the world average (29.7%) and very favourably to the average of OECDs, which is languishing down at just 6.7%. (This was wrongly quoted by both companies as the greenest in the world. I thought this was Iceland due the fact 100% of its electricity is produced from Hydro Electric or Geothermal power, but a bit of Googling has put Finland at the top of most lists of industrialised nations)

So obviously, using ethanol as an alternative to petrol is a good option if you want to save the world, and make cities less smoggier, and it can work out financially for the consumer. But what other benefits are there. (can't make question mark on this keyboard work!) Well, quite simply, employment. The sugarcane industry in Brazil employs just shy of 900million people directly, whether it be through the physical growing of the crop, refining it into sugar, fermenting it into ethanol, marketing it, transporting it etc etc. What i found really interesting about the presentation was the potential of growing sugarcane for ethanol in areas of Africa. Brazil has given loans to countries in Africa such as Angola and Mozmbique (who they are linked to due to shared language, Portuguese) and also Ghana and Nigeria. The potential for this as a tool for some African nations to haul themselves at least partly out of poverty is immense- Ghana has already signed a deal to supply Sweden with 150 million litres of bio-ethanol a year, and well-known Africa-campaigner slash (sadly slash work on this keyboard either) singer-songwriter Bob Geldof has spoken out in favour of biofuel production in Africa. This is an example of how globalisation can positively affect third world and developing countries, as well as the environment.

There are three main obstacles to large-scale biofuel production in the world´s poorest continent:

1. Demand. There is no certainty that demand will be high enough to make producing it worthwhile. Brazil experienced a huge drop-off in demand for ethanol in the 80s before a resurgence in the 90s, and few farmers would be willing to abandon a crop that has already made them money in preference for one that is highly perishable and has the possibility of not even being bought
2. Commodity status. Ethanol is not currently classed as a global commodity in the fuels sector- this is a big problem for trading it, as global tariffs will affect its trade more without the commodity status that Unica so craves for it. Oil companies are keen to stop this from happening and maintain it should only be traded as a food, and although it sounds cynical to call it 'blocking' ethanol's trade, and the speaker at Unica refused to be drawn (much) on the issue, we could tell he was a little bitter about this.
3. Stigma. There is global stigma with growing fuel as an alternative to growing food, especially in Africa, and rightly so! However a mix of common sense and the Unica presentation can effectively counteract this argument. If a person is a subsistence farmer then they are unlikely to swap crop if they are growing enough to feed themselves and their family- if they do it would only be because they could make more money for a better quality of life by doing so. If harvests of sugar cane are poor then the implications are less of those of food harvests being poor- a poor food harvest means not enough to eat; a poor sugarcane harvest is likely to be nationwide, even continentwide or worldwide, which would drive up the price of ethanol meaning the smaller quantity of sugarcane would still sell for a reasonable, if not good price. It is also widely believed that in Brazil rainforest is cut down to make space for sugar cane plantations. This is simply untrue, most sugarcane is grown in the southern-central regions of the country- rainforest ground is far less fertile and is protected by far more laws these days.

Obviously there are more benefits and negatives to ethanol production both in Brazil and in the whole world, but i feel I´ve had a good stab at summing up some of the main points of what i thought was a really interesting presentation and interview- thankyou for organising this one GF staff and British Council!

“The Global economy has had a heart attack”, Sebastian Wood CMG, the British Ambassador to the Peoples Republic tells me. At a meet and greet comprising representatives of Beijing Normal University (BNU), corporate partners and British embassy staff the fellows get the opportunity to network among some high profile people including: the vice president of BNU, representatives from Tata Consultancy Service, HSBC and Mr. Wood. Late in the evening I get the chance to question Mr Wood about the future of the China and the UK’s relationship with it.

China has modernised at a pace unmatched by any other nation. Since the four modernisations unleashed ‘socialism with Chinese characteristic’ in the late 70s China’s annual GDP and GDP per capita growth rate has risen over 9%. More over, in 2005 the growth rate of trade balance shot up by 218%. At an economics lecture at BNU we were informed that since the 70s the role of state industry (that comprised 90% of companies in 1978) has been significantly reduced and now accounts for just 15% of GDP. Although the state still controls railways, civil aviation, urban water, electricity, gas, education, oil, telecoms and defence the part it plays in the economic workings of China is now much less than before the death of Mao.

Of course, this has had both environmental and social costs. This forms much of the dialogue Mr Wood and the Chinese government have: how the environmental damage can be repaired and minimised in the future. Mr Wood suggests that while Britain does not have the influence that the US does it does have the capacity to change the media’s perception of China: as in the case of Ed Milliband’s criticisms of China’s refusal to accept environment reforms at Copenhagen in 2009. Mr Woods reinforces that it’s about give and take: the west must offer its own comprehensive reforms before demanding those from China.

A balance must be maintained in the global economy and the work of the embassy is key to this, especially after the recent slow down. To maintain healthy dialogues with other powers, especially at a time when many nations are tempted to sever interrelations with each other, makes the work of the embassy essential. Mr Wood is adamant that the next few years will go down in history, its fascinating to be in China at a time when this is so. However, if the world economy is to be reform for the benefit of all global citizens than these dialogues between nations must be explored further.