The usual justification for subsidies for ethanol is that our oil dependence must be broken. But a researcher at Chalmers University of Technology has calculated that society has more to gain from a change to pellet boilers than from the replacement of petrol by ethanol.
Not even when account is taken both of the risk of sudden oil price increases and the emission of greenhouse gases, is it cost effective from the standpoint of the national economy to replace petrol by domestic ethanol at present. Ethanol prices are increasing at about the same rate as the oil price, says Fredrik Hadenius, who also regards imported Brazilian sugar cane ethanol to be a better option than domestically produced wheat ethanol.