Low corn prices favor new type of ethanol in Brazil

July 18, 2014

Reuters, 7/18/2014

Low corn prices in Brazil following a bumper crop are worrying farmers but providing favorable margins for an incipient corn-ethanol industry, said the manager of Usimat, the first Brazilian mill to produce the corn-based biofuel.

Usimat, located in a remote, corn-producing part of Mato Grosso state in central Brazil, plans to increase corn-based ethanol output to 100,000 tonnes this year from 67,000 tonnes last year.

Sergio Barbieri, the mill manager, currently is buying corn for 15 reais ($6.73) per bag, and says it is more profitable to use the grain than to buy sugarcane at up to 18 reais per bag.

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Rousseff aims $2.5 billion at energy research: corporate Brazil

June 3, 2013

Stephen Nielsen – Bloomberg, 06/03/2013

Brazil will pour 6.1 billion reais ($2.85 billion) to fund renewable-power and biofuel technology research, accelerating its efforts to modernize its energy industry and shift away from a commodity-export based economy.

The country plans to triple funds for companies including Bunge Ltd. (BG) and Petroleo Brasileiro SA that are developing processes to turn sugar cane into high-margin chemicals and boost ethanol output, said Alexandre Tanaka, an official with Brazil’s research-financing agency Finep.

Brazil’s ambition is to lead development of the next generation of biofuels after a decade of hyperinflation stymied research budgets. The country is seeking to become a supplier of fuel-production technology and processes rather than purchasing them from other countries, Tanaka said. Its position as the world’s top producer of sugar cane may help it succeed with an approach some U.S. companies have abandoned.

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Brazil throws troubled ethanol industry tax breaks, credit

April 24, 2013

Alonso Soto, Reese Ewing – Reuters, 04/23/2013

Brazil’s government threw its sugar-ethanol industry a lifeline on Tuesday, by cutting taxes and sweetening credit for the struggling sector it hopes will resume investments in new biofuel plants to bolster output.

Finance Minister Guido Mantega, who announced the measures, said he expected a recovery in the ethanol industry could also help curb stubborn consumer inflation by bringing down fuel prices and reducing Brazil’s dependence on gasoline imports.

The reduction of the so-called PIS/Cofins – payroll and social security taxes – and interest rates on loans is expected to help ethanol groups such as Louis Dreyfus, Bunge , Cosan and others offset production costs that have risen steadily in the last decade.

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Sugar may need to drop further to spur Brazil to make ethanol

February 14, 2013

Isis Almeida – Bloomberg, 02/14/2013

Sugar may need to drop further to spur millers in Brazil, the world’s largest producer, to make more ethanol at the expense of the sweetener when the 2013-14 season starts there in April, according to Macquarie Group Ltd.

Futures traded on ICE Futures U.S. in New York, down 7.6 percent this year, may need to average 17 cents to 18 cents a pound when sugar cane processing starts in the center south, Brazil’s main growing region, Kona Haque, an analyst at the bank in London, wrote in a report e-mailed today. Sugar for May delivery was down 1 percent at 18.02 cents a pound.

Millers in Brazil use raw material sugar cane to make both the sweetener and the biofuel. The price of hydrous ethanol, the 100 percent biofuel used in Brazil’s flex-fuel cars, climbed above that of sugar on Feb. 7 for the first time since April 2011, according to Kingsman SA, owned by McGraw-Hill Cos. That spurred speculation millers would make more of the biofuel.

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End all trade barriers

January 18, 2013

Bob Dinneen – Ethanol Producer Magazine, 01/16/2013

As America’s ethanol industry continues to fight to expand the domestic market for ethanol through the increased use of E15, more flex-fuel vehicles (FFVs) on the road, and more consumer fuel choice at the pump, the global market for ethanol has been critical to maintaining the health and profitability of our nation’s ethanol industry.  Despite the arrival of the E10 “blend wall” for ethanol in the U.S, the ever-increasing demand for ethanol globally has helped the U.S. industry continue to grow and thrive at the same time it fights to combat an artificially constrained U.S fuel market.

While the U.S. ethanol industry historically only exported a small amount of its product every year, that all changed in 2009 when improving industry economics led to the U.S. ethanol industry becoming the lowest-cost producer on the planet. This ultimately led to a dramatic and sustained surge in U.S. ethanol exports around the globe. Amazingly, annual ethanol exports from the U.S. expanded from a meager 113 million gallons in 2009 to 397 million gallons in 2010 to a record 1.2 billion gallons in 2011. Although exports of U.S. ethanol in 2012 are not expected to be much higher than around 750 million gallons, this amount still represents the second-largest export total in U.S. history.

It is widely accepted that the reduction in U.S. ethanol exports in 2012 is in large part due to the sustained drought conditions suffered in the Midwest that have, in turn, significantly increased ethanol feedstock costs, and thereby hurt global price competitiveness. There is strong evidence, however, to suggest that the reduction of exports in 2012 is not solely the result of recent shifts in industry economics, but has been exacerbated by a recent effort by Brazil to erect new barriers to U.S. ethanol imports. While exports of ethanol to Brazil made up more than one-third of all U.S. ethanol exports in 2011, exports to Brazil have fallen significantly in 2012 due to new protectionist measures put in place over the past 18 months.

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Brazil doubles down on biofuels

January 2, 2013

Vinod Sreeharsha – IEE Spectrum, 01/02/2013

Later this year, northeastern Brazil will host one of the most ambitious biofuel experiments ever. There, in the small town of São Miguel dos ­Campos, surrounded by sprawling sugarcane fields, a commercial-­scale ethanol plant is expected to start operating in December. Unlike the nearby ethanol plants, which use sugarcane as feedstock, this new facility will consume the leftovers of those plants—bagasse and straw—to produce a holy grail of biofuel: ­cellulosic ethanol.

Ethanol produced from corn has gotten a bad reputation in recent years. Turning food crops into fuel might help drivers fill up their tanks, but it also raises food prices. What’s more, studies have shown that production of corn-based ethanol actually increases carbon emissions rather than reducing them. Because cellulosic ethanol is made from agricultural waste and nonfood crops, it has none of those drawbacks.

The prospect of transforming cheap raw materials like sugarcane bagasse, switchgrass, wood chips, wheat straw, and corn ­stover into fuel has led to a worldwide race for technologies that can make ­cellulosic ethanol commercially practical. But success has eluded big companies and start-ups alike. It costs more to make ethanol from cellulose than from corn or sugarcane because of the extra equipment, chemicals, and steps involved.

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Brazil said to plan higher ethanol blend as early as May

December 18, 2012

Mario Segio Lima – Bloomberg, 12/18/2012

Brazil, the world’s biggest sugar- cane grower, is considering raising the amount of ethanol mixed with gasoline as early as May as millers are forecast to process a record crop next year, a government official familiar with the plan said.

The mandatory ethanol blend in fuel sold at Brazilian service stations would rise to 25 percent from 20 percent now, said the official, who asked not to be named because he’s not authorized to discuss the plan publicly. Mills in the country process most of the sugar-cane crop into sweetener and fuel between April and November.

Petroleo Brasileiro SA (PETR4), Brazil’s state-run oil producer, has been importing gasoline and selling it below cost this year after fuel demand in the world’s second-largest emerging economy exceeded domestic supplies. Brazil lowered the ethanol blend to 20 percent from 25 percent in October 2011 after rainfall delayed sugar-cane harvesting and reduced crop yields.

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