Current Market Reach and growth potential, especially with other clean fuels
Interest in biofuels has increased primarily due to environmental, geo-political and economic factors, including initiatives by countries to develop new markets for agricultural products. The increase in demand for ethanol has largely been driven by tax incentives and blending mandates, which are regulatory directives requiring a minimum level of ethanol content in gasoline. Blending mandates allow governments to bring biofuels into the market without providing subsidies or tax credits for ethanol use.
Examples of current and upcoming mandates:
* Brazil – Gasoline required to include 20-25% ethanol
* Peru – Starting in 2010, up to 7.8% of gasoline must be ethanol
* U.S. – Energy policies will create a market for up 7 billion gal. of renewable fuel by 2012
* Canada – Until 2010, up to 7.5% of gasoline must be ethanol
* EU – 2% of fuel must be renewable, increasing to 5.75% by 2010
* China – Five districts require 10% of gasoline be ethanol
* Japan – Gasoline must be 3% ethanol, increasing to 10% by 2010
Ethanol — particularly sugarcane ethanol — is a clean burning, high-octane biofuel. It is a renewable energy source and can be grown year after year. Pure ethanol, a grain alcohol produced from sources such as corn and sugarcane, is not typically used as a replacement for gasoline. Rather, anywhere from 10-85% ethanol can be integrated into a gasoline supply to reduce both oil consumption and fuel burning emissions that contribute to global warming. Sugarcane has become the primary fuel source for Brazil, a country that has successfully weaned itself from a dependency on foreign oil. Stratos believes that Peru is capable of growing up to twice the amount of sugarcane per hectare (ha)* than an equivalent operation in Brazil.
*A hectare (ha) is a metric unit used to measure area
1 ha = ~2.5 acres
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