U.S. case helps contextualize Brazil’s ethanol policy scenario

There is perhaps no better parallel to understand the implications of Brazil’s current ethanol policy than recent developments in the U.S. With the war in Ukraine and the subsequent ban on Russian oil and energy imports precipitating the highest rate of American inflation in 40 years, U.S. policymakers are seeking to lower gas prices by 10 cents on the gallon at over 2,000 gas stations nationwide using an ethanol blend. 

Announcing the sale of 180 million barrels of oil from the U.S.’s Strategic Petroleum Reserve was the Biden administration’s attempt to address the energy crisis. However, this will hopefully be rectified by the middle of the year, as the so-called Ethanol E15 blend gas (containing up to 15 percent ethanol) is more affordable, with Iowa biofuel producers aiming for corn-based energy independence.

Most importantly, elevated gas prices are a major inflation driver, making the issue one of political survival for President Joe Biden. 

Gas prices are above USD 4 per gallon, and the president’s waning popularity in the polls reflects his dire need for support as the U.S. emerges from...