Ethanol consumption and production worldwide is a substantial growth industry. The ethanol production industry has developed based on two distinct models. The first is the Brazilian model where production is from very large sugar plantations and also peasant farmers. The Brazilian industry is relatively mature, having developed over the past 40 years. The second model is that developed in the United States of America , where production is from grain supplied by localized grower groups. A breakdown of the industry in global terms is as follows:

Brazil
Brazil is the largest global producer of ethanol. The 2003/2004 cane harvest is expected to produce 12.6 bL of ethanol. The Brazilian government has mandated for 25% ethanol content in gasoline. Forty percent of all vehicles in Brazil utilize E85 or similar. Brazil will continue blending ethanol at 25%. The Ministry of Agriculture has decided that the increase of blend percentage will be decided later. China and Brazil have had constructive meetings in Brazil to examine the possibility of China importing ethanol to blend with gasoline. Ford, GM and Fiat are the front-runners to launch the first flex-fuel vehicle by end 2004.

United States of America
In the United States of America , there are 72 ethanol plants with a capacity to produce 10.8 bL/year of high grade ethanol. The Cleaner Air Act 1990 has driven industry growth. Amongst other initiatives, the Act bans the use of MTBE and other toxins and carcinogenic additives into transport fuels. Fuel spills containing these additives have resulted in significant ground water contamination issues in recent years. In many States, ethanol use in transport fuel is mandated at 10%. During the past two years in California , major fuel companies have switched to ethanol. This switch has come 12 months prior to the 2004 deadline for the phase out of the MTBE additives. Ethanol will be a major source of hydrogen in fuel cells for the proposed $ 1.2 billion Freedom Fuel Program by President Bush for encouraging the use of hydrogen as fuel.

Japan
Japan is a signatory to and has ratified the Kyoto Protocol. The Japanese government is currently trialling E10. Japan has no local production. The government has indicated the possibility of a mandate of 10% in petrol and 15% in diesel for use in transport by 2008. Lower blends of 1-5% are already being tested and marketed. Demand at these levels will result in ethanol usage of approximately 5-7 bL/year.

Canada
Canada is a signatory to and has ratified the Kyoto Protocol. The Canadian government has stated a plan for 35% of petrol to contain 10% ethanol by 2010. This level would reflect a usage of approximately 1 bL/year. With a CO 2 reduction of 40% for grain alcohol, this amounts to replacing 532 million litres of gasoline or 1.33 megatons of CO 2.

China
China is the third largest international ethanol producer. Annual production is reported at 3 bL/year. Growth is reported at 8-10% a year. Heilongjiang Province produced 220,000 tonnes of ethanol, exporting 90,000 tonnes to Japan and South Korea in 2003.

Europe
A number of European countries have signed and ratified the Kyoto Protocol. In November 2002, the Council of the European Union legislated so that Member States should ensure that a minimum proportion of biofuels and other renewable fuels is placed on their markets, and, to that effect, shall set national indicative targets. A reference value for these targets shall be 2%, calculated on the basis of energy content, of all petrol and diesel for transport purposes placed on their markets by 31 December 2005 . A reference value for these targets shall be 5.75%, calculated on the basis of energy content, of all petrol and diesel for transport purposes placed on their markets by 31 December 2010 .

India
Currently, nine Indian States and four union territories are phasing in a 5% ethanol blend in petrol. Later in 2004, this program will be expanded nationally to all States and all territories. Plans are in place for the programme to increase to 10% ethanol. India has launched 5% ethanol-blended petrol from January, 2003 in some states. The Petroleum Ministry has sought restoration of 75 paise per liter excise duty concession on ethanol-blended gasoline to encourage this green fuel, as it is being practiced globally. There is hectic activity in the country to set up anhydrous alcohol plants. It has been estimated that 300 million liters per annum is under implementation. Six sugar mills in Tamil Nadu have been granted licenses by the Government, which will produce 55 million liters of ethanol a year.

Indonesia
Current production is reported at 4 bL/year from 17 production facilities. Plans are in place to, over the next five years, increase the level of production by 500% to 20 bL/year.

Thailand
In Thailand , eight ethanol plants are currently under construction with plans to build a further 12 facilities. Plans are in place to establish a production of 500 ML/year. Thailand has enormous potential to become a regional base for ethanol production, given the country's abundant supply of raw materials and strong demand overseas . The Royal Thai Government has switched all its Government vehicles in 2002 to “gasohol”, a blend of one part ethanol to nine parts gasoline.