The head of the Petrobras biofuel division, Alan Kardec Pinto, couched his call for lower tariffs on Brazilian ethanol in remarks on "environmental responsibility" clearly aimed at officials in Washington both present and future.

"Environmental responsibility is a global issue, and mainly for countries that are big energy consumers," Kardec Pinto said earlier this week at an international biofuels conference in Brazil.

Brazil's sugar-based ethanol is currently subject to a 53-cent-per-gallon tariff when entering the United States, a tax that Brazilian energy officials consider stymieing to ethanol producers trying to compete in a global alternative fuel market dominated by the United States.

The Petrobras biofuel chief also noted Americans find themselves in the "uncomfortable position" in the global debate over corn-based ethanol -- of which the United States is the largest producer -- as it has been blamed for rising food prices worldwide, especially close to home in neighboring Mexico.

Kardec Pinto said the United States, along with Canada and Brazil, must work together to improve sugarcane ethanol production. Currently Brazil is the world's largest producer of cellulose, or sugar-based, ethanol, which is considered clean-burning and more fuel-efficient than corn-based ethanol.

While Petrobras officials would like to envision a future U.S. government under Obama embracing its ethanol and dropping its tariff, the new administration is likely to disappoint Brazil.

Last year Sen. Obama, D-Ill., said in not so many words he opposed ending the tariff on Brazilian ethanol.

"As it relates to our country's drive toward energy independence, it does not serve our national and economic security to replace imported oil with Brazilian ethanol," said Obama during a 2007 Senate session.

While Washington weighs the pros and cons of allowing Brazilian ethanol to arrive on its shores at a cheaper price, the industry is facing some difficult challenges at home due to the global financial crisis.

A leading Brazilian ethanol producer was forced to declare bankruptcy last month in order to restructure $100 million in debt. Analysts expect more of the same in the months to come as promised investment in the sectors continues to fall through because of capital shortfalls due to a lending freeze at Brazilian banks.

However, Kardec Pinto said he still had faith the ethanol industry would weather the financial storm it currently faces and said the sector would nearly triple its production by 2020, from its current level of 25 billion liters per year to around 70 billion liters annually.

Alternative-fuel experts contend that the ethanol industry in Brazil will continue to grow as long as oil prices remain high, even though oil prices have dropped considerably in recent months.

"Given the strong ethanol market, one would expect that in the medium term, production of ethanol will also increase as sugarcane production rises to meet both sugar and ethanol demand," noted Amani Elobeid, an ethanol analyst at the Food and Agricultural Policy Research Institute at Iowa State University.

Brazil's alternative-fuel sector already has endured its fair share of setbacks since its inception more than 30 years ago.

In 1975 Brazil's Pro-Ethanol Program subsidized sugar mills to produce extra product specifically for the production of the biofuel in the wake of the oil price spike experienced worldwide. But the program was slow going at first and relied on federal funding. Then, in the late 1980s, it suffered an almost terminal blow when world sugar prices peaked, souring many motorists and cane producers on ethanol.

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