KINGSTON, Jamaica, August 8, 2008 - Prime Minister Bruce Golding says that from next month, it will be mandatory for motor vehicle fuel to include 10 per cent ethanol, as Jamaica enters an agreement with a Brazilian company to use more of the country's sugar cane for ethanol production.
Mr. Golding said his government took the decision against the background of the new trading arrangements that will govern the export of sugar to Europe, taking effect next year. Although Jamaica will still have guaranteed access to the European market, it will not get a guaranteed price for the commodity.
The island has therefore made a deal with Infiniti Bio-Energy of Brazil "that will see much needed new capital being injected into the sugar industry".
Mr. Golding said that under the agreement, less of the country's sugar cane will be going into sugar and more into ethanol, to take advantage of the growing market demand for ethanol as oil prices climb.
The Prime Minister added that negotiations with Coimex of Brazil are at an advanced stage for government to acquire the ethanol plant currently operated by Petrojam Ethanol Limited. The incorporation of this plant in the new arrangement is critical to its success, he said.
"It is a major breakthrough for the sugar industry which has been through one crisis after another," he said. Mr. Golding has therefore called for cooperation on the deal which he said requires clear focus, sober minds, responsible utterances and most of all, putting Jamaica's interests first.
"It would haven been calamitous for the sugar industry were it not for the agreement we have entered into for a partnership with Infiniti Bio-Energy of Brazil," he said.
Brazil is the world's top ethanol producer, using sugar cane as the feedstock. According to the California energy commission, vehicles in that country have been using 100 per cent ethanol - a cleaner, cheaper alternative to gasoline - for decades.
Mr. Golding, however, sought to make it clear that his government was not abandoning the sugar industry. He said that rather than selling the sugar assets outright, government now owns 25 per cent of the new company that is being set up to own and operate the enterprise. The sugar lands he said, will remain in the ownership of the government and will be leased to the new company.
The Jamaica leader said government is on schedule for the transfer to take effect on September 30, 2008 and that arrangements have been made for all sugar workers to receive their redundancy payments on that day.
Prime Minister Golding said a large percentage of the workers are expected to be re-employed by the new company.
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Source: Caribbean 360
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