Environmental, geopolitical and economic macroforces are driving the large and under served
biofuel market. Those forces are generating an increasing interest in the biofuels that are most efficient in reducing carbon footprints. Current policy initiatives if fully implemented could result in biofuels (mainly ethanol) displacing up to 5% of the worldwide motor gasoline use by 2010.
With regulatory directives requiring a minimum level of ethanol content in gasoline, many countries have instituted initiatives including tax incentives and biofuel blending mandates to accelerate the rate of biofuel production. Currently these mandates exist in 15 countries at national, regional or state levels – including California. With the institution of these initiatives, rural economic development opportunities are facilitated, stimulating the economies and communities in which they are produced.
Ethanol production in particular creates more labor opportunities than other sources of energy. Sugarcane-based ethanol production enables countries that have existing sugar industries to produce ethanol – a higher value-added product rather than relying exclusively on the volatile sugar commodity market. Brazil is currently the world’s largest sugarcane ethanol producer. Stratos believes it can produce at least 145 tons of sugarcane per ha per year, approximately twice the average production per ha in Brazil. Given Peru’s low cost of production, free trade agreement with the U.S. and Canada, climatic advantages and available land, its believed ethanol production in Peru could displace portions of Brazil’s ethanol export market.
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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