The cars navigating Brazil’s crowded streets currently powered by sugarcane or corn-based ethanol could before long run on a cornucopia of fuels made from grains, tubers and other exotic feedstocks.
A new wave of biofuel innovation is sweeping the nation, with developers in unexpected corners of the country’s farm sector encroaching on decades of domination by sugarcane producers in ethanol markets, betting on everything from staple crops including wheat or barley to waste products such as discarded foodstuffs.
“The future of the energy transition is not a world of ‘ors,’ it’s a world of ‘ands,’” said Alexandre Breda, low carbon technology manager for Shell’s Brazil unit, which is researching the viability of agave as a biofuel.
Photo: Reuters
“We need the sugarcane and the corn and the agave and the wheat and all the different biomass. One single feedstock will not bring the answer,” Breda said.
Brazil’s roughly US$20 billion ethanol industry is second only to the US, and it has long been known for its fleet of “flex-fuel” passenger cars that can run on a 30 percent mandatory blend of ethanol mixed into gasoline, or ethanol alone.
The country’s “third wave” of biofuel innovation from major industry producers and start-ups promises even more variety than the sugarcane and corn inputs that have dominated fuel production. The activity is bolstering production of crops such as sorghum, and could do the same for wheat and other products just as ethanol plants have done for Brazilian sugarcane and corn.
About 28.5 billion liters, or 71 percent, of Brazilian ethanol would come from sugarcane this year, while 11.2 billion liters will come from corn, the Energy Research Company said.
The country’s biggest biodiesel producer, Be8, is investing 1.7 billion reals (US$328.61 million) in a plant to produce wheat-based fuel. The biorefinery in Rio Grande do Sul is expected to launch in March next year, becoming Brazil’s first large-scale plant using wheat and other winter grains as biofuels, with a goal to produce 220 million liters per year.
“Rio Grande do Sul was left out of both the first wave of ethanol production, which was sugarcane, and the second wave, which was corn,” Be8 founder and CEO Erasmo Carlos Battistella said at the company’s biodiesel plant Passo Fundo. “Now a third wave is coming, driven by developing technologies that will use the raw materials we have here.”
In Brazil’s north and northeast, where corn ethanol has grown quickly, sugarcane ethanol producers are wary of new feedstocks and overproduction in general as they struggle with sugar prices near six-year lows.
“Now is not the time for expansion and investment in raw materials for ethanol,” said Renato Cunha, chief executive of regional cane-ethanol producers’ association NovaBio.
The disorderly growth of corn ethanol had hurt the market, Cunha said, adding: “You can’t just think you’re going to produce ethanol and sell it all.”
Other observers said the government’s rising biofuel mandate and broader adoption of 100 percent ethanol pumps serving Brazil’s flex-fuel passenger cars would support production.
The government is expected to boost the mandatory percentage of ethanol in gasoline to 32 percent this month, which would boost annual ethanol demand by about 1 billion liters, industry group UNICA said.
Bioenergia Brasil head Mario Ferreira Campos Filho predicted that 40 percent to 45 percent of Brazil’s ethanol production could come from grains in five to six years.
“Not even half of the municipalities in Rio Grande do Sul have ethanol-only pumps,” he said. “The possibility of having your own production allows you to open the market up.”
Be8 expects to meet 23 percent of gas station ethanol demand in the state once its plant is operational.
Biofuel demand is squeezing extra income out of previously unloved products in Brazil’s economy.
Using wheat and other winter cereals for ethanol might encourage more plantings for crops with historically limited commercial appeal, said Giovani Stefani Fae, head of technology transfer in state research agency Embrapa’s wheat unit.
Wheat ethanol, like corn, produces a key coproduct after fermentation and evaporation. The protein-rich leftovers, called dried distiller grains, are used for livestock feed, giving those producers an additional revenue stream that sugarcane ethanol cannot provide.
Be8’s plant is expected to produce 155,000 metric tonnes of dried distiller grains and 27,000 tonnes of wheat gluten. Producers in Sao Paulo state have discovered a similar process for turning excess sweet potatoes into ethanol and animal feed.
Currently, those potatoes “are effectively left in the field because it isn’t even viable to harvest them,” Agropecuaria Vista Alegre industrial manager David de Carlo Fernando Junior said, adding that the industry helps guarantee that whatever is planted would be harvested.
Major soybean processors such as Caramuru and CJ Selecta are squeezing more profit out of Brazil’s top crop by making ethanol from the soy molasses that results from processing soymeal.
Even food bound for the garbage heap is included. Environmental services company Ambipar is using food waste such as unwanted soft drink syrups and other discarded items to produce about 2.4 million liters of ethanol annually, although that is a fraction of the country’s 40 billion liter output.
In Brazil’s semi-arid north, Shell is investing 100 million reals to research whether agave, used to make tequila and mezcal, could be a feedstock.
If successful, the project could unlock new biofuel opportunities in similar regions worldwide, Breda said.
“If you can produce tequila, you can produce ethanol,” he said. “Everything ferments to something.”
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