ComBio, Brazil’s largest supplier of renewable heat energy to industrial users, expects its revenue to triple to around 2.4 billion reais (about $430 million) over the next five years, driven mainly by rising demand from corn ethanol producers, a senior company executive said on Monday, reported Reuters.
Ricardo Blandy, commercial director at ComBio, said Brazil currently has about 25 corn ethanol plants in operation. Another 18 plants are being built, while 19 more are still in the planning stage. He said the fast growth of the sector is putting pressure on the supply of biomass, which is used to generate energy for ethanol production.
Blandy said the shortage of biomass has become a bigger concern than corn availability or ethanol prices, especially in Mato Grosso, the country’s largest corn ethanol-producing state. He said some regions are already facing a serious lack of biomass needed to run steam boilers at ethanol plants.
The rapid expansion of the corn ethanol industry, combined with limited biomass supplies, has drawn the attention of authorities. In October, a Reuters report said state prosecutors in Mato Grosso began looking into whether some producers were illegally using wood from deforested areas to fuel their plants.
Although ComBio currently serves about 10 industrial clients from different sectors, it has not yet signed any corn ethanol producers. Blandy said this is likely to change soon, as discussions with major players in the sector are at an advanced stage. He said the company has held talks with around 30 leading ethanol producers or project developers and expects to announce its first contracts in the coming weeks.
To meet future demand, ComBio plans to plant eucalyptus trees on around 10,000 hectares in Mato Grosso over the next few years. This would help secure a steady supply of biomass for corn ethanol plants.
ComBio also invests in renewable power projects and manages the operation of biomass-based power units. Blandy said these energy systems can make up as much as 30 per cent of the total cost of building a corn ethanol plant, which usually costs between 1 billion and 1.5 billion reais.
He added that while industrial energy projects typically require investments of 150 million to 300 million reais, the forestry side of the business can require up to another 300 million reais, depending on the size of the project. He said ComBio may invest up to 600 million reais in total to cover both industrial facilities and plantation development.
