Thee effects of land-use change (LUC) on soil carbon (C) balance has to be taken into account in calculating the CO2 savings attributed to bioenergy crops(1-3). There have been few direct fieldmeasurements that quantify thee effects of LUC on soil C for the most common land-use transitions into sugar cane in Brazil, the world's largest producer(1-3). We quantified the C balance for LUC as a net loss (carbon debt) or net gain (carbon credit) in soil C for sugar-cane expansion in Brazil. We sampled 135 field sites to 1 m depth, representing three major LUC scenarios. Our results demonstrate that soil C stocks decrease following LUC from native vegetation and pastures, and increase where cropland is converted to sugar cane. The payback time for the soil C debt was eight years for native vegetation and two to three years for pastures. With an increasing need for biofuels and the potential for Brazil to help meet global demand(4), our results will be invaluable for guiding expansion policies of sugar-cane production towards greater sustainability.