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nov 07, 2017

Brazil diversifies energy matrix with corn-based ethanol

Brazilian corn producers have outdone themselves. Winter corn crops became a “super harvest,” reaching 100 million tons. But that won’t be a one-time exception, as corn looks set to become increasingly more important for Brazil’s ethanol production – which currently leans heavily on sugarcane.

But according to industry trade bodies, this year’s “super harvest” will come to seem rather modest in the mid-term. Within six to 8 years, farmers expect to be able to produce double this – at the very least.

In the state of Mato Grosso, Brazil has just opened its first ethanol-producing plant to exclusively use corn. FS Bioenergia invested 450 million BRL in a 250,000 square-meter plant, inaugurated in August 2017, with the expectation that it will produce up to 240 million liters of biofuels per year.

The region chosen to host the new ethanol plant was no coincidence. Mato Grosso has historically been a pioneering region in Brazil, producing corn-based ethanol since 2012. The biofuel generated from the cereal represented 20 percent of the state’s ethanol production in 2016/2017. “Neighboring states, like Goiás, could soon join Mato Grosso in the production of the corn-based fuel,” said Blairo Maggi, Brazil’s Minister of Agriculture.

Brazil’s current ethanol production relies heavily on sugarcane, but the trend is shifting towards corn – and that could be a great thing for producers and consumers alike. While production cost might slightly increase, 1 ton of corn can generate 407 liters of ethanol – as opposed to 89.5 liters from 1 ton of sugarcane.

The goal seems bold, but it is in line with Brazil’s aim of relying more on renewable energy sources. The Brazilian government is committed to that goal, and has launched numerous initiatives to stimulate the renewable energy market. Proof of that is RenovaBio, a federal program that will create a regulatory framework for the sector and guarantee greater predictability for producers.

The program will oblige fuel producers to rely more on sustainable fuels like ethanol, increasing its presence in the diesel mix from 8 to 10 percent. The sector forecasts that the production of biofuels will double within the next 14 years, reaching at least 44 billion liters annually.

"This program will have great effects on the national biofuels industry by creating new jobs, decentralizing production and giving more opportunities for other producers to participate in the biofuels sector," said Donizete Tokarski, superintendent director of Brazil's association of biodiesel producers, to BN Americas.