UBS says ethanol will be insufficient to substitute oil in the next 20 years
[ 2006-08-24
]
Lisbon, Portugal, 24 Aug – A study by Swiss investment bank UBS concluded that ethanol is as yet insufficient to substitute oil, saying that in the most optimistic scenario ethanol could only supply 10 percent of the world’s cars in 2020.
Currently, world ethanol production totals less than 10 billion gallons per years, but according to projections from UBS it is expected to reach more than 30 billion gallons.
Despite the significant increase, the amount would still be low if compared to world gasoline consumption used exclusively for vehicles, UBS argued, saying that last year gasoline demand totaled 320 billion gallons.
In order to speed up ethanol production, analysts have said that there is a need to focus on technological developments that make it possible to transform cellulose from many products, as sugar cane production (in Brazil) or maize production (in the United States) are subject to specific climate conditions.
They said, however, that a lack of arable land could increase the cost of production in some regions of the world.
In terms of creating and international market for ethanol, which is one of Brazil’s aims, UBS warned that one of the main obstacles would be setting subsidies for production in several countries, which could distort competition and make trade imposible.
Another problem UBS foresees are high import taxes on these products, which would require wide-ranging negotiations between several countries in order for a market to actually be set up. (macauhub)
All rights reserved. 
