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Brazil answered the oil shocks of the 1970s by running its cars on sugarcane alcohol, and by the mid-1980s almost every new car sold there ran on it — then the ethanol-only market collapsed
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It was that the system depended on oil and sugar prices, reliable ethanol supply, and continuing government support.
The oil shock that made Brazil rethink the whole fuel supplyThe trigger was the 1973 oil crisis.
A 2016 paper on the history of Proálcool lists the pile-up: falling oil prices, low domestic ethanol prices, high international sugar prices, and limited government resources all helped undermine the ethanol-only market.
The comeback came through flex-fuel engines, which can burn gasoline, ethanol, or any mix of the two.
Volkswagen launched the Gol Total Flex in 2003, and flex-fuel cars rapidly came to dominate new-car sales, exceeding 90% of new cars in 2013.