Bioethanol Industry Perspectives in Brazil

Bioethanol Industry Perspectives in Brazil

José Geraldo Eugenio de França –
geugenio1@terra.com.br

ITEP – The Technological Institute of Pernambuco – Technical Director

Av. Prof. Luiz Freire, 700 – Cidade Universitária – 50740-540 – Recife, PE – Brazil

Abstract

Brazil has a long history of biofuel production and use, and is the country that first developed a large scale program aiming the use of ethanol as an automotive fuel. The main feedstock for the Brazilian ethanol industry is sugarcane, a traditional crop in the country since the XVI century. In the last ten years the country witnessed a boom in ethanol use, especially due to the development and marketing of the flexfuel (gasoline and ethanol) vehicles in 2003. By 2009, 90% of the new automobiles in Brazil were flexfuel what illustrates the effectiveness of this technology adoption. It is common sense that the economics effective ratio of the ethanol vs gasoline prices is 10 to 7. However in the last 4 years particularly due the high sugar prices in the international market the ethanol has shown a higher ratio and the consumers have dropped remarkably the use of pure ethanol preferring the use of gasoline that in Brazil is a mixture with 25% of ethanol. There has been a lot of discussion in the last few months on how the government can work with the sugarcane industry in order to reconquer the Brazilian market. It looks something interesting since in 2013/2014 the Brazilian industry has used 65% of its 9,3 million hectares of cultivated sugarcane for producing ethanol instead of sugar. After few years with the ethanol production stalled around 23 to 24 billion liters a year, the last year have witnessed a surge in the ethanol production reaching 28 billion liters. The country has also observed that a reasonable portion of this production has been sold abroad, what makes the local market extremely vulnerable and open for the outside competitors, particularly the corn ethanol industry of the USA. For a long term perspective it is clear that the ethanol industry has to use the bagasse for producing second generation ethanol even though this feedstock has become very valuable for energy production through cogeneration or as row material for sugar high valuable derivatives. The country still has an edge in ethanol production comparable with most competitors however it will be extremely indispensable to invest in research, development and innovation in its sugarcane industry as well as to update the research agenda on the production of biofuels from agricultural, industry and urban residuals since although the sugarcane acreage has increased it will not be enough to fulfill the local and international demand for sugar, ethanol and energy.