On October 5th 2005 the Jamaica Gleaner reported on the energy potential of Jamaican sugar-cane production, both for ethanol and co-generation. According to Karl James of Jamaica Cane Product Sales the sugar sector is ‘strategically placed to help reduce our dependency on oil’, but that an expansion of production would be needed to provide the necessary feedstuffs for extensive ethanol production. He indicated that part of the funding for diversification into ethanol was expected to come from the EU, although Brazil was also being approached for support.
While the technological scope for ethanol production is clearly available, most financial projections of commercial viability are based on a price for cane related to the world market price. This makes ethanol production unattractive for cane growers, as an alternative to revenues earned on the high-priced EU market. However, it may remain attractive to millers if earnings from ethanol production do not go into a common revenue pool, where revenue-sharing arrangements between millers and growers are in place. This raises questions about the commercial viability of ethanol production as an alternative to supplying the formerly high-priced EU market. Put simply, if you can produce cane which makes ethanol production profitable at world market-related prices for cane, you could probably continue to supply the EU market even at the lower post-reform price.