The push for increased biofuels is being driven by more than consumer interest and economic advantages. It has become commonplace for governments around the world to legislate the use of ethanol and biodiesel in an effort to reduce reliance on foreign oil and lessen the environmental impact of the growing number of vehicles on the road.

Brazil led this charge in the 1970s after oil shortages caused dramatic increases in fuel costs. It began introducing ethanol from sugar cane into its gasoline supply and quickly became the world leader in the ethanol industry.

Today, Brazil substitutes ethanol for 40 percent of its non-diesel transportation fuel and intends to achieve full independence from foreign oil in 2006.

The challenge to this plan might be the increasing demand for ethanol products. With more flex-fuel vehicles on its roads than standard-fuel cars, Brazil is hard pressed to keep pace with the ethanol needs of its domestic market and export customers. As a result, its government reduced the ethanol requirement in gasoline from 25 percent to 20 percent in February of this year.

In the United States, the Renewable Fuel Standards (RFS) Act of 2005 mandated production of 7.5 billion gallons by 2012 and there are discussions of moving that target even higher. In addition, production of methyl tert-butyl ether (MTBE), another fuel oxygenate and octane booster, was discontinued in May 2006, leaving an immediate 3-3.5-billion-gallon gap to be filled by ethanol. This will challenge the 100 ethanol facilities currently operating and increase the need for the 80 new plants that are at the construction or planning stages.

The impact of ethanol will also be felt in the world’s most populous countries. In China, the government is making it mandatory to use a 10-percent ethanol blend in five provinces that account for about one-sixth of that country’s vehicles. This mandate not only reduces the demand level for oil that would otherwise need to be imported, it also improves air quality. China’s government has a stated goal of providing initiatives to reduce pollution levels in its cities. India is also planning to increase its ethanol blending requirement from 5 percent to 10 percent.