The National Alcohol Program - ProAlcool, created by the government of Brazil in 1975 resulted less dependency on fossil fuels. The addition of 25% ethanol to gasoline reduced the import of 550 million barrels oil and also reduced the emission CO(2) by 110 million tons. Today, 44% of the Brazilian energy matrix is renewable and 13.5% is derived from sugarcane. Brazil has a land area of 851 million hectares, of which 54% are preserved, including the Amazon forest (350 million hectares). From the land available for agriculture (340 million hectares), only 0.9% is occupied by sugarcane as energy crop, showing a great expansion potential. Studies have shown that in the coming years, ethanol yield per hectare of sugarcane, which presently is 6000 L/ha, could reach 10,000 L/ha, if 50% of the produced bagasse would be converted to ethanol. This article describes the efforts of different Brazilian institutions and research groups on second generation bioethanol production, especially from sugarcane bagasse. (C) 2009 Elsevier Ltd. All rights reserved.