A former Enron executive is tapping investors for $150m (£75m) to help Brazil produce enough biofuels to power the world's cars.
Vehicles running on ethanol made from Brazilian sugar cane emit up to 95 per cent less in carbon emissions compared with conventional gasoline. But US and European corn-based ethanol – which is heavily subsidised – cuts emissions by as little as 5 per cent and is much less energy efficient.
Last week, a report from the Organisation for Economic Co-operation and Development (OECD) criticised the distorting effect of subsidies in promoting the least-efficient biofuels. It also warned that government targets on biofuels use were hastening deforestation and pushing up food prices.
Diomedes Christodoulou, the former boss of Enron South America, claims that planting 37 million hectares of land in Brazil with sugar cane would produce enough ethanol to power the world's fleet of cars with a high biofuel blend by 2030. Currently, some 65 million hectares of land in total are under cultivation in Brazil.
Mr Christodoulou's firm, Gordian Energy Partners, which is being advised by investment bank Dresdner Kleinwort, is looking for $150m from US and European investors to fund sugar cane plantations and refineries in Brazil.
He argues that the Brazilian rainforest will not be cut down to accommodate the plantations because sugar cane does not grow well in tropical climates.
He added that growing millions of tons of sugar cane would not displace farmers into rainforest areas as there was already enough unused arable land.Reuse content