A 5.5. What are the premises for this expansion to succeed, assuming there is a solid market for ethanol?
Worthwhile prices for sugarcane, sugar and ethanol are needed. Amongst external factors, keeping average international oil prices over US$45 a barrel (at the current technological stage of ethanol production in Brazil) is a driver of ethanol production and use. Access to the export market (although this is secondary in regard to the domestic market) requires other countries to adopt the mandatory use of ethanol, bilateral agreements that establish favorable conditions of access to the product, the prevention of protectionism, the reduction of imports tariffs, the maintenance of most-favorable trading conditions, as in the Caribbean Basin Initiative, and the development of new technologies to expand international production of ethanol on a large scale in the long term. For the domestic market, the unification of the State-VAT (ICMS) rate throughout the country at the same level as So Paulo State (12%), the maintenance of current tax levels on gasoline, improved autonomy with ethanol in
