Brazilian ethanol has been a strategic energy commodity in the South American country since the 1970s. The efficiency of sugarcane-based ethanol and the abundance of its primary resource convinced the military leadership of the 1970s to use this commodity to supplement the national gasoline market and thereby decrease the dependency on international oil markets.

After the 2003 introduction of the flex fuel engine, a car engine that can run on any mixture of ethanol and gasoline, ethanol expanded its market reach and thereby increased its strategic value for Brazil's energy mix. The Brazilian government that came into power in 2003 under the presidency of Lula da Silva understood the implications of this rise in internal ethanol consumption and saw the international potential that sugarcane-based ethanol offered for Brazil.

For one thing, with a consumption rate that equalled that of gasoline in 2010 (about two billion litres), ethanol provided a suitable substitute for fossil fuels and decreased dependence on international oil markets; however, at the same time, it created a new dependence on domestic production capacities. As the world's largest producer of sugarcane-based ethanol, Brazil cannot count on an international market to supplement the consumption of domestic production in the case of low production caused by droughts, flooding or other unforeseeable events.

Hence, Brazil has been working towards creating an international market for ethanol that would both reduce Brazil's dependency on the internal market and leave the country in a position as the technological leader in an increasingly important economic sector. To achieve this, it is important to broaden the consumer base of ethanol as a fuel as well as to increase the number of producers internationally. Furthermore, ethanol lacks international standardisation, which is one of the main reasons why the World Trade Organization (WTO) has not yet specifically addressed the product.

Additionally, promoting ethanol internationally gave Brazil the opportunity to position itself at the pinnacle of the climate change discourse of the 2000s and develop strong ties, mainly with other developing nations, through new ‘South–South cooperation’ that has gained importance since the rise of the emerging markets and their turn to the ‘Global South’ in the early 2000s.