October 26, 2012

New Technologies to Greatly Increase Brazilian Ethanol Production

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

According to the director of the Center for Sugarcane Technology (CTC) Osmar Figueiredo Filho, the amount of ethanol produced from a hectare of sugarcane in Brazil could increase up to five times over the next 20 years. He made that projection at the Sixth Annual Sugarcane Congress of Mato Grosso do Sul held this week in the city of Duurados, MS. He based his assessment on a number of factors including: cellulosic ethanol being produced from sugarcane residue, new processing technologies, genetically improved sugarcane varieties, and improved sugarcane crop management.

Currently, a hectare of sugarcane in Brazil produces on average about 7,000 liters of ethanol per year and he believes it could increase to 35,000 liters per year within 20 years. He estimates that the ethanol production per hectare could double with just the introduction of cellulosic ethanol made from the residue left over from sugarcane processing.

Cellulosic ethanol today costs 30% to 40% more than ethanol made from regular sugarcane, but costs are expected to decline with improved processing technology

Sugarcane processors in Brazil are also striving to produce sustainable sugarcane in accordance with the standards set forth by the "Better Sugarcane Initiative". The Better Sugarcane Initiative is a set of standards developed by non-governmental organizations and multinational companies involved with the production and importation of sugar and ethanol into the European Union.

The Better Sugarcane Initiative in Brazil has already certified 20 sugarcane mills in Brazil as meeting their goals of sustainability. These 20 mills represent 4.6% of the sugarcane produced in Brazil and potentially 20% of the ethanol exported to the European Union until the year 2020. The first vessel carrying certified ethanol from Brazil is expected to arrive in Europe in the coming weeks.

The European Union has been the only group that has set standards for sugarcane sustainability, but the United States has already classified Brazilian ethanol as an advanced biofuel capable of reducing greenhouse gas emissions by as much as 90% compared to gasoline. That allows Brazilian ethanol to be imported into the U.S. in such states as California that has set higher standards for ethanol production.

Brazilian ethanol producers will need to ramp up production next year just to meet domestic demand when the amount of ethanol blended into Brazilian gasoline will return to 25%. It had been lowered to 20% last year in order to extend tight ethanol supplies.