Corn-Based Ethanol Gains 19% Market Share in Brazil

Traditionally, ethanol in Brazil has been produced from sugarcane, but corn-based ethanol continues to grain market share in Brazil and the future looks bright except for the fact that the sector lacks adequate grain storage capacity.

The production of corn-based ethanol in Brazil increased from 520 million liters in 2017/18 to 4.5 billion liters in 2022/23 according to the National Confederation of Industries (CNI). Corn based ethanol is expected to account for 19% of the ethanol consumed in Brazil in 2023/24 according to the National Corn Ethanol Union (UNEM).

Mato Grosso, which is the largest corn producing state in Brazil, is also the largest corn ethanol producing state with 70% of the total capacity. There are 18 corn ethanol facilities in Brazil with 16 located in the center-west region of Brazil. Eleven new corn ethanol facilities are in the planning stage with seven existing facilities undergoing expansion.

For the sector to continue growing, more emphasis is needed on increasing the grain storage capacity, especially in the center-west region of Brazil. In Mato Grosso for example, the grain storage capacity deficit in 2021/22 was 57 million tons. Due to the deficit, much of the safrinha corn production is stored temporarily in the open air during the dry season.

A temporary solution to the grain storage deficit is the use of silo bags, which has been gaining in popularity especially in the center-west where the deficit is the greatest.

Bazil is chronically short of grain storage and if the ethanol sector is to prosper long-term, more permanent grain storage must be constructed. The Brazilian government has pushed for more storage construction, but high interest rates, a lack of capital, and bureaucracy has slowed the process.

The ethanol sector is touted as a sustainable way to produce biofuels. According to the USDA, ethanol emits 30% less greenhouse gases compared to gasoline and corn-based ethanol offers other advantages such as dry distillers’ grain which is used for animal rations.

Instead of using diesel, natural gas, or electricity to power the corn ethanol facilities, reforested eucalyptus is used instead. Sugarcane ethanol facilities utilize sugarcane biomass to generate the power needed to operate the facility with excess electricity sold into the grid.

According to Sueyde de Oliveira Braghin, market intelligence director for silo bag maker Silox, corn ethanol offers a promising development of a more sustainable “green” future for Brazilian agriculture.

Tags: corn, Brazil, Production, Market, еthanol, sugarcane