Biofuels May Be Key to the Economic Restoration of Cuba

(In International News) Biofuels may be key to the Economic Restoration of Cuba.

With Fidel gone after nearly 50 years of iron fist rule and his brother Raul most likely taking over, the doors to the economic rejuvenation of Cuba may have the possibility of being unlocked. The key comes in the production of ethanol from sugarcane.

The biofuel industry could offer the opportunity to transform a closed economy into an open, market-oriented system. In the process, Cuba could reap major social, economic and environmental benefits. With new leadership, Cuba stands to become a major player on the emerging world ethanol market.

Sugar has played a key role in the history of Cuba during the dictator’s rule. After the island country was blocked from exporting sugar to the U.S., Fidel turned to the Soviets in a “sugar for oil” trade agreement in 1970.

Fidel immediately implemented the “Ten Million Tonne Harvest” plan, forcing every able man to become a cane planter and cutter. This was a success and Cuba became the world’s largest sugar exporter.

At its peak, the Cuban sugar industry consisted of 150 sugar factories, which processed roughly 80 million tons of cane per year. Of that, 10 million tons was exported.

This in turn led to an increasing dependence on the Soviets for oil and manufactured goods to keep the economy and industry running.

However, with the 1990 collapse of the USSR, Cuba’s sugar based economy soon collapsed as well. Since then, many factories have shut down or have been producing at under-capacity. Today’s current production and exports are only 10% of what they used to be.

The answer to this flailing economy could be in the Ethanol Industry. Biofuels have the possibility of leading to job creation, foreign investment and a reliable and renewable supply of electricity for Cuba. It is estimated that if Cuba can export 3 billion gallons of ethanol, they could generate close to $7 billion U.S. dollars per year.

The world’s current leader in Ethanol manufacture is Brazil. The country has made clear it is now targeting the E.U. ethanol market after the European Commission implemented a plan to control climate change by reducing dependency on petroleum.

With Brazils push for increased biofuel production, concerns have been raised that it could cause a destabilization in food prices as well as slashing parcels of Amazon rainforest to make room for sugarcane plantations.

Cuban biofuel however, would come from former and existing plantations so no new land would have to be cleared leading to ethanol production that is environmentally sustainable and carbon-neutral.

This possible revitalization all depends on the new leadership to take over in Fidel’s departure, and perhaps America’s willingness to economically engage them. If the U.S. State Department won’t end the trade embargo, the European demand for ethanol is currently rising.

Biofuel production from sugarcane could be the key to rejuvenation and redemption in a post Castro Cuba.