Fifty years after the launch of Proálcool, Brazil’s pioneering biofuel program that built a vast alternative market for the nation’s sugarcane mills, the industry now faces a shifting and more competitive landscape. With India and Thailand returning to the global sugar market, Brazilian producers are expected to face a growing domestic challenge, the rapid rise of corn-based ethanol, which is likely to impact sugarcane ethanol within the next decade, reported Valor International.
As per the news report, projections from consulting firm Datagro indicate that the combined production capacity of existing, under-construction, and planned corn ethanol plants will reach 24.7 billion liters by 2034. This volume is nearly equal to the 25 billion liters of sugarcane ethanol expected from the current harvest. Furthermore, sugarcane ethanol production shows no signs of growth over the next ten years.
This means that by 2034, half of Brazil’s ethanol output could come from corn. While corn and sugarcane ethanol are chemically identical, corn-based production is more cost-effective.
Corn ethanol’s competitive edge extends even to regions where grain prices are higher. In Brazil’s Northeast, for example, the new Inpasa plant in Balsas, Maranhão, has started supplying corn ethanol at lower prices. According to Edmundo Barbosa, president of Sindaçúcar-PB, anhydrous ethanol is reaching Paraíba at R$0.20 per liter less than locally produced fuel, even after accounting for over 1,000 kilometers of freight costs.
Although Paraíba hosts eight sugarcane mills, the state still depends on ethanol imports from other regions to meet local demand. Distributors are now reportedly favoring corn ethanol from Maranhão over sugarcane ethanol produced nearby, according to the news report.
Datagro president Plínio Nastari explained that the ongoing expansion of corn ethanol production in Brazil’s Central-West and Matopiba regions will sharply reduce the Northeast’s supply deficit. “We estimate that by 2030, 85% of the region’s deficit will be eliminated,” he said.
