TT:Linking
sugar & energy
By STCIC
The Trinidad Guardian
Port
Spain
Petroleumworldtt.com
10 29 06
The
future of Trinidad’s sugar industry seems
uncertain and the Canefarmers’ Association
of T&T (CPATT) is planning to “call on
the Government to pay a lump sum to farmers to exit
the industry.”
The
position taken is largely a result of the proposed
sale of the Sugar Manufacturing Company Ltd (SMCL).
According
to CPATT, sugarcane farmers have invested heavily
in land and machinery and if the SMCL is closed,
a large number of these farmers will be made bankrupt.
There are an estimated 4,000 farmers (mainly from
south Trinidad) and more than 40,000 acres of private
lands on which sugarcane is being cultivated.
The
challenges faced in the sugar industry are partly
due to its traditional narrow production focus.
Today we see that there have been significant developments
on the world scene which can contribute to the revitalisation
of this industry, on a scaled-down level, with a
rationale for diversification. This diversification
drive should seek to closely link the sugar, energy
and manufacturing industries of the country.
Marrying
these sectors would not only diversify production
capacity and increase revenue but also ensure economic
stability for canefarmers, and creation of employment
within this relationship. While viable linkages
can be made between sugar and the manufacturing
industries, particularly, the local food and beverage
manufacturing sector, there are also links with
the energy sector, which the chamber believes should
be actively considered.
Countries
such as Brazil and Cuba have long been converting
sugar into ethanol which is used as an alternative
fuel to gasoline for automobiles and other vehicles.
Similarly, in order to reduce their large fuel import
bills, India and China have also taken steps to
expand local production of ethanol. In addition,
the US government’s new energy bill which
was passed earlier this year, gave tremendous impetus
to the development and use of renewable sources
of energy, particularly bio-fuels.
Ethanol
is easily the major winner from this policy initiative
and has already been estimated to have a ten per
cent blend in some 46 per cent of the gasoline sold
in the US. Both percentages are expected to grow
exponentially over the next few years. The European
Union has also mandated the increased use of bio-fuels
so the markets for ethanol are clearly available
and growing.
T&T
can also produce ethanol on a commercial level by
linking our sugar and energy sectors. This process
would not be difficult since the country already
has the technological and financial capabilities
to make this a reality.
Ethanol
has proven to be more cost-effective than gasoline.
In Brazil, for example, according to Economist Aparecida
de Angelo Teixeira, “the price of a litre
of alcohol (ethanol) in some regions ranges from
40 per cent to 45 per cent lower than the price
of gasoline, and although engines that use ethanol
consume more fuel per mile than gasoline engines,
it costs 30 per cent less to market alcohol than
it costs to market gasoline.
In
addition, ethanol’s operational costs are
lower and it is produced from sugarcane, which is
a renewable resource, unlike petroleum.” (Universia-Knowledge@Wharton,
2006).
The
environmental benefits are also significant.
The
emissions produced by burning ethanol are cleaner
and less reactive with sunlight than those produced
by burning gasoline. This results in a lower potential
for damaging the ozone layer. In fact, countries
such as Japan and Sweden are importing ethanol from
Brazil to help fulfill their environmental obligations
under the Kyoto Protocol because ethanol releases
less carbon dioxide than fossil fuels.
Therefore,
it is not surprising that Brazil claims “its
ethanol exports will likely double to US$1.3 billion
in 2010 from US$600 million in 2005, largely to
Japan and Sweden” (The Wall Street Journal,
2006).
Thus
ethanol is not only more cost-effective than gasoline
but also safer for the environment which is an issue
of great importance to all.
A
rejuvenated, scaled-down sugar industry in south
Trinidad with a rationale for diversification can
therefore provide opportunities for expansion within
the energy sector in the production of ethanol,
a marketable bio-fuel.
Critical
to this proposed linkage is the sustainable nature
of the sugar industry. Canefarmers would now have
an increasing demand for their crop and this market
will be stable, ensuring a viable means of livelihood.
Additionally,
opportunities for employment and business investments
would also be created through the linkages of these
two sectors.
Given
the possibilities that can be derived from linking
the sugar and energy sectors, it is reasonable to
conclude that the future for T&T’s sugar
industry is not bleak, once serious steps are taken
along the suggested path.
The Trinidad Guardian
Thursday 26th October 2006
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©2006 Trinidad Guardian. All Rights Reserved.
