Brazil is the country that has invested the most in ethanol, implementing it in three distinct phases: the Proálcool program in the 1970s, the adoption of the flex system starting in 2003, and more recently, integration with hybrid vehicles that also use alcohol.
The concept behind these three waves of ethanol incentives is over a hundred years old and originated outside of Brazil, being advocated by Henry Ford.
At the beginning of the 20th century, the automotive future was still uncertain. While many engineers leaned towards electricity, Ford advocated for ethyl alcohol because it had domestic production, burned cleaner than the gasoline of the time, and freed the industry from dependence on imported oil. For him, tomorrow's fuel should come from the countryside.
The discovery of vast oil reserves in the United States at the beginning of the 20th century caused a drop in gasoline prices, parallel to the expansion of refinery infrastructure. However, during the Prohibition period, between 1920 and 1933, alcohol manufacturing remained practically prohibited, even for industrial purposes.
The topic returned to the Brazilian debate after the 1973 oil shock. Since the country imported more than 80% of what it consumed, the government of Ernesto Geisel instituted Proálcool in 1975 with the aim of encouraging sugarcane cultivation and the use of alcohol in vehicle tanks. In just one decade, vehicles powered exclusively by ethanol reached 85% of new model sales, setting a record in 1985.
This leadership did not last long. The subsequent drop in oil prices and the increase in sugar made sugarcane economically more viable for food production than for vehicle fuel, coupled with supply instability, which shook driver confidence. Ethanol only regained relevance in the 2000s with the introduction of the flex system, which eliminated the need for the consumer to choose a single type of fuel.
The current third phase is underway. Since August 2025, the gasoline available at stations contains 30% anhydrous ethanol, an increase from the previous 27%. Furthermore, electrification has adapted to alcohol: Toyota launched the Corolla in 2019, becoming the first flex hybrid produced in Brazil, and BYD manufactures the plug-in flex Song Pro and Atto 2 in Camaçari (BA).
In Europe, the success of this bet depended on local tax policy. In France, Superethanol E85, which contains between 65% and 85% alcohol, costs approximately R$ 5.24 (€0.88), less than half the price of regular gasoline, which is R$ 13.27 (€2.23), due to the fact that the ethanol portion is almost exempt from taxes. Consumption soared by 83% between 2021 and 2022, a movement driven by the context of the yellow vest revolt.
France accounts for 25% of European bioethanol production and holds 8% of the superethanol market. Other countries such as Germany (16%), the United Kingdom (12%), and Spain (11%) produce on a large scale but do not actively promote E85; in these locations, ethanol is taxed like gasoline and is intended for E5 and E10 blends or export. Sweden was an exception in this scenario, between 2002 and 2008.
In Brazil, ethanol registered a national average price of R$ 4.05 in August, compared to R$ 6.65 for regular gasoline, according to ANP data. The price parity hovers around 70%, making it advantageous for flex vehicles, although the expansion of sugarcane cultivation remains under review due to its link with deforestation.


