By Carlos Caminada
June 20 (Bloomberg) -- The U.S., Brazil and the European Union are accelerating efforts to create global standards for ethanol and make the alternative fuel an internationally traded commodity, boosting its use, an American official said.
Government and industry leaders discussing the plan may finish standardizing methods for analyzing ethanol properties such as water and energy content by December, four years ahead of schedule, the U.S. State Department's Gregory Manuel said. Next, the group will begin to set content standards, he said.
The U.S., Brazil and EU have agreed to fast-track the process,'' Manuel, Secretary of State Condoleezza Rice's special adviser for alternative energy, said in an interview in Sao Paulo yesterday. ``What we've achieved so far could have taken several years and we did it in several months.''
The standards will let buyers and sellers worldwide trade ethanol like gasoline, oil, copper, sugar and other commodities, boosting the fuel's use, Manuel said. Currently, a buyer in Sweden has to send engineers to mills in Brazil to test the fuel before buying it to sell to drivers of flex-fuel Saabs and Volvos in the Nordic country, he said.
We can start seeing a world where we'll begin to really replace gasoline with ethanol,'' Manuel said. Trade is a function of commoditization.''
Standards also will help U.S. efforts to boost the ethanol content in fuel for use in engines that burn regular gasoline, said Douglas Faulkner, the Department of Agriculture's deputy undersecretary of rural development. The Environmental Protection Agency is studying the effect of increasing the current 10-percent limit for ethanol in gas sold in the U.S., Faulkner said in the same interview.
The effort to set global ethanol standards involves about 600 laboratories in the U.S., Brazil and Europe, as well as officials from governments, ethanol makers and car-engine manufacturers. After agreeing on the standards, each government will have to codify them in regulations, Manuel said.
There are 147 ethanol distilleries in the U.S., the world's biggest producer, consumer and importer of the fuel, according to the Renewable Fuels Association in Washington. The mills, mostly using corn, have the capacity to produce more than 8.5 billion gallons (32.2 billion liters) of the fuel a year. Another 55 plants are being built and six are being expanded, to add 5 billion gallons of capacity, the association said May 30.
Ethanol shipments from Brazil, the biggest exporter, may rise to as much as 4.5 billion liters (1.19 billion liters) this year, from 3.2 billion in 2007, boosted by demand from the U.S. and Europe, Marcos Jank, president of industry group Unica, said last month. Brazil is the world's second-biggest producer and consumer of the fuel.
The EU imported a record 1 billion liters of ethanol last year, almost all from Brazil, the European Bioethanol Fuel Association said on April 7.
President George W. Bush has set a target of increasing the use of renewable fuels in the U.S. to 36 billion gallons by 2022, from 9 billion gallons required this year.