Jun 09, 2026
Third Wave of Ethanol Production Sweeping Brazil
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
The global rise in energy prices due to the U.S.-Iran war has affected consumers around the world, but the impact has been less sharp in Brazil known for its fleet of "flex" passenger cars that utilize gasoline, mixtures of 30% ethanol in gasoline (B30), or 100 ethanol (E100). The average price of gasoline in Brazil rose only 5% at the end of May compared to January. In contrast, gasoline prices in the United States rose more than 40% since the war began in late February.
A new wave of innovation is sweeping Brazil with new industries challenging decades of dominance of sugarcane producers in ethanol markets. The first wave was dominated by sugarcane production. The second wave saw corn ethanol production rising sharply. The third wave involves other raw materials such as soybeans, grain sorghum, wheat, small grains, sweet potatoes, manioc root, etc.
In 2026, approximately 71% of Brazil's ethanol, or 28.5 billion liters, will come from sugarcane with 11.2 billion liters, or 29%, coming from other agricultural products, mainly corn, but also from soybeans, wheat, and other grains.
The government is expected to increase the mandatory percentage of ethanol in gasoline to 32% in June (E32), which would increase annual ethanol demand by about 1 billion liters according to Unica. The president of Bioenergia predicts that 40 to 45% of Brazil's ethanol production will come from grains in five to six years.
Researchers are exploring the use of other raw materials to produce ethanol. Even products such as soybean molasses, which is a byproduct of soybean processing, is being used to make ethanol. In the semi-arid region of Northern Brazil, Shell is investing R$ 100 million to research whether agave, used in the production of tequila, could be used to produce ethanol. If successful, the project could open up new opportunities for biofuels in similar regions around the world.