I hope the sugar-based energy industry learned some lessons in 2009. The industry lacks the planning of the total it needs or must produce. The producer, a born optimist, always bets there will be a buyer for his production, notwithstanding difficulties faced in transforming ethanol into a commodity. This bet is basically on the domestic market, in light of growing demand resulting from the increase in numbers of the dual-fuel car fleet.

Production this year will be higher than in 2009, albeit the losses that will be incurred with the long-lasting drought, due to the start-up of new units and production growth in others, with an increase in the total production of both sugar and ethanol. Some investments are being postponed mainly due to producers’ lack of working capital on account of losses incurred due to the prices practiced last year.

This remuneration issue will probably speed up the merger of some groups, resulting in the industry’s concentration, in light of the economic scenario that will inhibit the stock exchange market and make lending more costly, forcing more leveraged producers to unite or sell their companies. Furthermore, as if all these problems and challenges were not enough, the industry must deal with an extremely important – and why not say it – strategic issue, which is the lack of qualified workers and the difficulty faced by suppliers of machines and equipment.

The industry celebrated partnerships with Senai and Senar to train professionals, but faces “cannibalism” in the form of several projects appearing at the same time. This scenario, however, tends to stabilize. At the same time, the industrial sector, which experienced periods of growth stagnation, was not prepared for the growing demand in orders and now seeks to grow its production to meet the country’s growth.

The light at the end of the tunnel is the federal government’s perspective of resolving problems in hooking-up mills to the network, making it feasible to invest in energy co-generation by burning sugarcane straw and bagasse. Here in Goiás alone, we may be able to, by 2013, supply more than 1,700 MW of energy (equivalent to the State’s energy consumption), and sufficient to scare off the ghost of rationing, thereby rendering mill projects feasible.

Goiás, nowadays, is the second energy producing state using biomass and expectations are that, by 2020, we will be producing approximately 3,000 MW (2,000 MW for sale). Before that, in 2015, approximately 15% of the electricity generated in the country may come from biomass. One may say that agro-energy is truly the salvation of the crop, because apart from generating the energy the country needs, with it, entrepreneurs can make their projects viable. Nowadays, Goiás has 34 producing units and is Brazil’s fourth largest sugarcane producer (it may become the third this year), the fifth largest of sugar and the second largest of ethanol.

Our ethanol production in 2009, about 2.2 billion liters, was higher than the entire production of Northeast Brazil. In 2008, our industry had a directly employed workforce of 92,000. Goiás more than tripled its GDP and has been growing and generating jobs above the national average. The sugar-based energy industry is one of the main agents in this development. In IBGE surveys and CAGED indicators, it is always the towns that have mills that appear as the champions in job generation. Furthermore, investments in the industry resulted in the valorization of land in Goiás, giving cause to the arising of new opportunities throughout the state’s territory.

The industry now seeks to invest in efficiency, improving its productivity in the field (more tons per hectare and more liters of ethanol or kilos of sugar per hec-tare), thanks to investment in research, in partnership with our universities (foremost, UFG of the Ridesa network), Embrapa and private companies (CTC and Canaviallis), and it is now close to obtaining the first varieties of plants conceived for the peculiarities of our region.

Companies in this industry also invest to increasingly decrease its waste, such as lignase and filter cake (used for fertilization), consuming increasingly less water. One should point out the the company Jalles Machado, of Goiás, was recently granted an award by ANA - Agência Nacional de Águas (National Water Agency) for the rational use of its hydric resources.

At the current point in time, a new and promising frontier is being opened for our units for utilization of sugarcane to produce “green” plastic (like the material used on Coca-Cola bottle caps) and hydrocarbons (production of gasoline and diesel from sugarcane), making it feasible for a strong ethanol-based chemical industry to develop.

We should achieve a record harvest this year: 48 million tons of sugarcane (20% increase) 1.8 million tons of sugar (32% growth) and 2.8 billion liters of ethanol (33% increase). All this, along with a 30% increase in consumption and all this production using only a little more than 1% of our State’s land (cattle breeding uses 35 % and soya 8%).

The industry’s importance becomes evident. We have a major market problem, given that more than half our production is sold outside the state (mainly to the Federal District, Tocantins and the Brazilian Northeast). The much desired ethanol pipeline is planned to run from Paulínia to Uberaba (not before 2012 and we hope it will soon reach Itumbiara in Goiás). The industry has made a lot of effort so that this important transportation modality of ethanol production at least reaches Itumbiara.

Pipelines, apart from cheaper, are more efficient since they reduce (trucks’) CO₂ emissions, and also diminish traffic, and hence, expenses incurred with the maintenance of our highways. Apart from the ethanol pipeline, the waterway Tiete – Paraná (beginning in São Simão-Goiás) and the North-South railroad (scheduled for conclusion by 2011), would attenuate the problem, leaving only the storage problems and port costs.  There are many challenges, but bigger than those is only the certainty that the sugar-based energy industry has the will and the competence to overcome them.