The use of ethanol as transportation fuel started together with the automobile industry in combustion engines type Otto cycle . During the beginning of the 20th century with the rise of cheap fossil fuel, the ethanol was set aside for a long period. After the oil crisis in the 1973 Brazil initiated the ethanol program. The government started to offer incentives for the industries to produce ethanol and at the same time the automobile industries in the country started developing new technologies for the engines moved by ethanol. Since 1976 there is no automobile running with pure gasoline because the government established that it should be mixed with ethanol in a proportion varying from 10 to 25%. Until 1986 most cars sold in Brazil were moved by ethanol, but after the sugar price increased around the world the gasoline became attractive again. At the beginning of 21st century the predicted scarcity and high prices of fossil fuels lead the companies to invest in ethanol production again. Together new revolutionary technologies originated Flex-fuel vehicles which can run in ethanol, gasoline or any mix of the two .
Ethanol can be produced using sugarcane, corn, yucca or beet. Sugarcane is the cheapest raw material for ethanol production. According to  it costs 3-5 times more to produce from beet or corn. In 2007 the average cost to produce ethanol from sugarcane was $0.28 per liter and from corn was $0.45 per liter. The percentage of reduction in gas emissions with sugarcane ethanol was 66% compared to only 12% with the corn ethanol. Also, the sugarcane produces 3 times more ethanol by area than corn. As seen in , in 2006, the American industry of corn ethanol production is only viable because of a government subside of $4.1 billion.
The sugarcane as raw material can contribute to the production of renewable energy in another way because its bagasse can be used as a fuel or as the cogeneration of electric energy . Until early 90’s the sugarcane bagasse was considered a problem for the ethanol industries. The sub-product of ethanol production was given for free by the companies which wanted to get rid of it. For each ton of sugar cane used for ethanol production approximately 250kg remain as bagasse. Nowadays bagasse is utilized for many purposes such as animal food, organic fertilizer and electricity generation. Moreover, recent researches indicate the possibility of using the sugar cane straw to generate electricity. There exists a perspective in Brazil that between the years of 2020 – 2021 the electricity production capacity using the sugar cane bagasse and straw will reach approximately 29 GW !
Besides all that, recently, a portion of the sugarcane bagasse is compressed in pellets  and it is exported to many countries for electricity generation. Another important project is the use of ethanol as fuel for thermal generation turbines. In 2009, Petrobras started to test the use of the renewable fuel in an existing gas thermal plant. This conversion represents the first thermal plant in the world that uses ethanol as fuel with a generation capacity of 42 MW .
 Technical Feasibility and Economic Viability of Sugarcane Ethanol, Conference on Aviation and Alternative Fuels, 2009.
 Ethanol Fuel in Brazil – http://en.wikipedia.org/wiki/Ethanol_Fuel_in_Brazil
 A.A. Bosso, M.L. Machado, Álcool da Cana ou do Milho?, Revista Ciências do Meio Ambiente, 2006 (Portuguese)
 C. Andreoli, S.P. de Souza, Cana de Açúcar: A Melhor Alternativa para Conversão da Energia Solar e Fóssil em Etanol, Economia e Energia, 2007 (Portuguese).
 T.S.G. Lee, E.A. Bressan, The Potencial of Ethanol Production from Sugarcane in Brazil, Sugar Tech, 2006
Bagaço da cana, “resíduo” cada vez mais lucrative (Portuguese) – http://www.estadao.com.br/suplementos/not_sup235392,0.htm
 Brazil biomass Pellets Sugarcane – http://www.youtube.com/watch?v=vUuAhSik50I
Etanol no Brasil – http://alcoolbrasil.blogspot.com/2009/07/etanol-nao-e-bombril-mas-tem-mil-e-uma.html