Fuel venture faces choking: Brazil may stop filling its cars with alcohol, writes Phil Davison

PESSANHA, a 45-year-old Rio taxi driver, lounged in the shade of his locally-built 1989 Chevrolet Commodore, seemingly oblivious to the flow of sun-tanned flesh along the nearby Copacabana beach. 'I'm worried. Without alcohol, I don't know if I can survive,' he said.

The genial cabbie, who lives in a favela (slum) above the city's Sheraton Hotel and plies Copacabana to seek a wealthier clientele, is not an alcoholic. His car is.

He was commenting on reports that Brazil may be about to end its unique and popular experiment with alcohol-driven cars. Launched in 1975, in the wake of the Opec crisis and spiralling oil prices, it seemed a good idea at the time. To the 4 million of Brazil's 12 million car owners whose vehicles run on sugar-cane alcohol, as well as the nation's ecologists, it still does.

The alcohol cars produce far fewer pollutants than their petrol-fuelled counterparts and do not add to the greenhouse effect. The trouble is that, with the plunge in oil prices, the sugar-cane alcohol is costing more to produce per barrel than oil imports and costs the state a fortune in subsidies which it can ill afford.

That is the official line and it is true enough. The less publicised version, though, and the one cited by Pessanha and many Brazilians I spoke to, is that moves to end the alcohol experiment are highly political, pushed by the state energy monopoly, Petrobras, and the motor industry. For them, petrol engines are a more lucrative proposition.

For the nation's poorer families, however, the alcohol cars are cheaper to buy and to run. A litre of 'gasohol' costs around 12,400 cruzeiros (roughly 35p) while alcohol is on sale at 9,750 (about 25p). Filling stations have pumps for both. Petrol-engines were phased out during the 1980s. 'Gasohol' is a mix of roughly 80 per cent petrol and 20 per cent alcohol. 'My engine was made for alcohol. If they stop alcohol, I'll have to have it converted. That would be likely to cost me at least pounds 1,000,' Pessanha told me. That is two years' wages for the average Brazilian worker and means a lot of money to Pessanha, who is trying to get his family out of the slums. 'I get slightly less power with alcohol but that doesn't bother me. The only problem is in winter, when the alcohol engine is slower to start.' He raised his bonnet to show me an auxiliary tank containing about half a litre of petrol that feeds automatically into the carburettor as a 'choke' system in cold weather.

A conversion means changing the pistons, the fuel tank, fuel lines and carburettor. Alcohol - or, strictly speaking, 'ethanol' - engines emit up to one-third less carbon monoxide than petrol engines, a factor considered vital by ecologists in giant conurbations such as Rio or Sao Paulo. The environmentalists estimate that abandoning alcohol and converting to gasohol would boost carbon monoxide emissions in big cities by more than one-third. Converting to pure petrol would more than double such pollution, they say.

There is little sign that the fat cats in the energy monopoly, or the government, are listening. Many Brazilians believe President Itamar Franco sympathises with the Petrobras and car industry lobby while his disgraced predecessor, Fernando Collor de Mello, because he came from a northern sugar-producing state, had leaned towards the pro-alcohol programme despite its problems.

While the sugar industry has gratefully used the 'green argument' for alcohol, its motives have not always been squeaky-clean. There have been shortages at the pumps over the past few years, sometimes because of poor weather affecting sugar-cane crops, but often for another reason: if world sugar prices were high, the cane farmers simply churned out sugar, ignoring the national need for motor fuel.

If sugar prices were low, the producers could still not lose. Petrobras is obliged by law to subsidise sugar-cane alcohol production and keep it below the price of gasohol. The fact that Brazilian taxpayers - by no means all alcohol car owners - are therefore subsidising car alcohol cars has added more public weight to the scrap-alcohol movement.

The sugar lobby says production costs could be slashed with more state investment. The pulp left over from the crushed cane, known as bagasse, is used for animal fodder, while other residue provides good quality fertiliser. Steam turbines produce electricity from burnt left-over cane but experts say better quality turbines could provide enough power to make the alcohol-producing plants self-sufficient.