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.
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.
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.
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.
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.
December 13, 2012
Brazil’s sugarcane production will rise 6.5 percent this year but ethanol output will slump 5.22 percent as a greater focus is put on exporting sugar, the agriculture ministry said Wednesday.
Data from the national crop-forecasting agency Conab said sugarcane production in the world’s leading producer could reach 595.13 million tons during the 2012-2013 harvest, up from 560.36 million in 2011-2012.
“Improved weather conditions from the second half of the year in the main producing areas, such as the central-south, makes possible an increased volume of sugarcane for the milling season,” an official report said.
November 6, 2012
EFE/Fox News Latino, 11/05/2012
Brazil’s Copersucar and U.S. company Eco-Energy announced Monday that they are linking their ethanol operations to create the largest biofuel marketer in the world.
The two firms together control 12 percent of the global market for ethanol, with a combined supply capacity of 2.6 billion gallons (10 billion liters) of biofuel per year, the partners said in a press release.
Brazil makes ethanol from sugar, while U.S. producers use corn as raw material.
November 2, 2012
Brazil’s trade ministry said the country’s exports of corn and ethanol rose in October as foreign buyers turned to Brazil after the worst drought in 50 years ravaged U.S. crops.
Sugar and iron ore exports surged in October from a year before as well, as weather at the main ports remained clear and global demand for the raw materials was strong, the ministry said on Thursday.
Brazil harvested a record corn crop of nearly 73 million metric tons (80.47 million tons) this past season, which surpassed its soy output for the first time in a decade. Corn exports last month reached a record 3.66 million metric tons to beat September shipments of 3.14 million and October year-ago exports of 1.52 million.
September 20, 2012
Reese Ewing – CNBC/Reuters, 9/20/2012
Brazilian ethanol is rushing back into the United States after a three-year ebb, drawn less by the severe drought that has inflated corn costs than by biofuel regulations that could more than triple next year’s shipments.
Even as corn prices shot to record highs above $8 a bushel while sugar futures languished at near two-year lows of 19 cents per lb, Brazil’s sugar-based ethanol production was still more costly than U.S. corn-based domestic supply, traders say.
Brazilian ethanol is competitive in the U.S. market, thanks only to credits from the U.S. Environmental Protection Agency, which requires that fuel companies use 500 million gallons (1.9 billion liters) of so-called advanced biofuels to blend into gasoline this year. The EPA recognized Brazilian ethanol as advanced in February 2010.
September 20, 2012
Stephan Nielsen – Bloomberg Businessweek, 9/19/2012
BNDES, Brazil’s national development bank, and the research-financing agency Finep plan to provide 2 billion reais ($988 million) for ventures developing new techniques to process sugar cane into fuel and specialty chemicals through 2014, double the initial plan.
The two government agencies may approve 300 million reais in loans and grants for projects this year, 700 million reais in 2013 and 1 billion reais in 2014, Carlos Cavalcanti, head of biofuels at Rio de Janeiro-based BNDES, said in an interview at a conference in Sao Paulo yesterday.
The agencies are expanding support for the research program in response to growing interest in converting cane residues into useful products, he said. Companies including Dow Chemical Co. (DOW), DuPont Co. and Braskem SA (BRKM5) have proposed projects worth more than 3 billion reais that have passed an initial selection phase.