Thus the Brazilian government, then a military dictatorship, launched efforts in the mid-1970s to wean the nation off imports. Those efforts included its National Alcohol Program, known as Proalcool.

“To become less dependent was a matter of life and death,” said Jose Goldemberg, secretary for the environment of the state of Sao Paulo.

With the help of public subsidies and tax breaks, farmers planted more sugar cane, investors built distilleries to convert the crop to ethanol and automakers designed cars to run on 100 percent alcohol. The government financed a mammoth distribution network to get the fuel to gas stations and kept alcohol prices low to entice consumers. It worked. By the mid-1980s, virtually all new cars sold in Brazil ran exclusively on ethanol.

But a 1989 shortage coupled with low gas prices soured many on the renewable fuel. Sales of alcohol-only cars tumbled in the 1990s, and the government gradually withdrew its subsidies and lifted price controls on ethanol. Demand stalled.

Some critics at the time chalked it up to the inevitable consequences of government meddling. But today many laud Brazil’s Proalcool program for creating a viable domestic market for ethanol, and for spawning an industry with tremendous export potential that now employs more than 1 million Brazilians.

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