A former Enron executive is tapping investors for US$150 million ($210 million) to help Brazil to produce enough biofuels to power the world's cars.
Vehicles running on ethanol made from Brazilian sugarcane emit up to 95 per cent less in carbon emissions compared with conventional petrol. But United States 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 biofuel 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 sugarcane would produce enough ethanol to power the world's fleet of cars with a high biofuel blend by 2030. At present, about 65 million hectares of land are under cultivation in Brazil.
His firm, Gordian Energy Partners, which is advised by investment bank Dresdner Kleinwort, is looking for US$150 million from US and European investors to fund sugar cane plantations and refineries in Brazil.
He argues that the Brazilian rain-forest will not be cut down for the plantations because sugarcane does not grow well in tropical climates.