For the last year, hundreds of state-owned cars with stickers saying "This Vehicle is Powered by Alcohol" have been driven around this city of more than 8 million people.

Local auto parts shops sell a $200 kit to convert conventional gasoline engines to run on pure a alcohol.

A nearby industrial center has just ordered a fleet of non-polluting alcohol-powered buses. In half a dozen major cities. Brazilians now fill the tanks of their car with "gasohol" - a mixture of 80 percent gasoline and 20 percent ethyl alcohol.

That mixture requires no engine modification. By 1980, when alcohol production is to reach 1 billion gallons annually, all pumps are to offer only gasohol or alcohol.

The president of the Brazilian Automobile Manufacturers' Association, Mario Carneo, has predicted that by 1981 more than 16 percent of all cars built here - currently 1 million per year - will come equipped with engines that burn pure alcohol.

Only a few years ago, of these projects would have been considered practical. In the heady days of Brazil's economic upsurge in the early 1970s, planners here followed the example of the United States and other industrialized countries and looked to cheap gasoline to fuel the booming economy. They gave little thought to "nonconventional" energy sources.

Today, however, Brazil imports 83 percent of its petroleum, costing $4 billion yearly - the largest oil import bill in the southern hemisphere. Now, Brazil is seeking its salvation in one of the oldest and most plentiful substances known to man: alcohol distilled from sugar cane, manioc and other tropical plants that grows abundantly in this gaint land.

The effort is already far enough along that energy experts consider Brazil the world leader in using alcohol as a motor fuel. This year alone, Brazil's alcohol program will result in the consumption of 635 million gallons of ethy alcohol either as a gasoline substitle or supplement.

"This is one area of energy research and development in which and Brazilians have an advantage not only over us, but over everybody else," said a White House aide during President Carter's March visit here, when the United States and Brazil agreed on an energy information exchange program. "There are really a lot of things for us to learn from them."

The process by which vegetable material - or "biomass," as it is technically known - is transformed into alcohol fuel is simple. Brazilians have been converting sugar cane into alcohol by fermentation since colonial days, and ethyl alcohol was mixed with gas as early as the 1930s, when record low prices of sugar brought on by the worldwide depression forced Brazil to divert part of its bumper crop into fuel.

But systematic investigating of the large-scale use of alcohol as a gasoline substitle or additive began only with the advent of the international energy crunch in 1973. In the last five years, Brazil's National Alcohol Commission has approved some 170 projects and earnmarked $800 million for biomass conversion and engine modification efforts.

"The emphasis has been not so much on research and development as on the expansion and implementation of programs that already existed on paper," says an American official in Brasilia. "They've mostly done things like modernize old sugar mills and improve their distribution system."

But at the aerospace and technology Center a government research facility near here, scientists have undertaken 34 different programs to design engines that will run on pure alcohol or to convert gasoline engines to alcohol at minimum cost. Elsewhere, agronomists are engaged in genetic research in an attempt to increase yields of crops that will be distilled into alcohol.

Thus far, sugar cane alcohol has received more attention from the Brazilians, but Petrobras, the gaint state oil monopoly, has recently begun operating a manioc distillery near the industrial city of Belo Horizonte that turns out 16,000 gallons of manioc alcohol daily.

Experimental programs conducted in major cities have shown that alcohol, whether derived from sugar cane or manioc has several major advantages over ordinary gasoline. Although it leaves a slight odor, it burns cooler, cleaner and more efficiently, giving virtually the same mileage as gasoline, but without leaving lead or sulphur pollutants. Hydrocarbon residues "can be lowered to neglible levels," according to a recent study.

While alcohol engines are harder to start that those that run on gasoline, this is less of a problem in Brazil's tropical climate than it would be in the temperate United States. The Brazilians attach a gadget to the motor that starts the car each day on a small quantity of pure gasoline. After that, they say, the residual heat is sufficient for the pure alcohol to catch without difficulty.

The converted cars use normal gas tanks and the experts say they have encountered no problems with evaporation. For all the interest in alcohol as fuel, the government - which is pouring billions of dollars into nuclear and hydroelectric energy programs - has proven more reluctant to take what one foreign energy expert calls "the big leap" to pure alcohol.

"There are no technological reasons whatsoever to prevent alcohol from eventually taking the place of gasoline," said professor Jose Goldemberg of the University of Sao Paulo, president of the Brazilian Society of Physics and one of the strongest advocates of the biomass program. "What's holding them back are political and economic considerations.

"Pertrobras oppose the alcohol program because the pump price it charges for gasoline is a purely artificial one that is four times the actual cost," Goldemberg said. "Since alcohol currently costs twice as much to make as gasoline, that means both Petrobras' profits and government tax revenues would drop if a crash program to replace gasoline with alcohol were put into effect."

Proponents of the alcohol program say these economic shortcomings are offset by other gains. In widely publicized speeches recently, two influential government ministers argued that a full-scale pure alcohol effort would generate jobs in Brazil and that all expenses incurred would be in cruzeiros, not dollars - thus avoiding adverse effects on Brazil's uncertain balance-of-payments situation.

In the long run, say both foreign and Brazilian energy experts, there is no doubt that alcohol will emerge as an economically attractive source of energy, both for Brazil and for other nations.

"The trend seems to be that while oil prices will rise, the price of alcohol will continue to drop, perhaps by as much as 20 percent as methods of production become more efficient," says a U.S.official.

Some Brazilian officials are already looking ahead a decade and predicting that their nation will be able to export alcohol and alcohol technology to Africa, Latin America and perhaps even the industrialized world. Patents have already been taken out by Brazil on engine modifications and distillery improvements that have been developed here.

"Boimass energy just may be the wave of the future," said the U.S. official. "If it is, the Brazilians are going to have the jump on the rest of us."

Biomass fuels were once associated with underdevelopment and Brazilians have had to overcome their pride to enter the field. They note, however, that others are following - West German and Scandinavian scientists have bought the results of Brazilian studies.