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Perspectives for Ethanol in Brazil
Demand for ethanol in Brazil - one of the world's largest producers - is set to grow by 150 per cent over the next decade, writes Chris Harris, Senior Editor, TheBioenergySite.According to a report from the state owned Energy Research Company - Empresa de Pesquisa Energétic - demand that reached 25.5 billion litres this year is set to jump to 63.9 billion litres by 2017.
The report, Perspectives for Ethanol in Brazil, shows that the increase in demand will mainly come from the automobile sector and it says that this sector alone will account for 80 per cent of ethanol use by 2017, because of the large numbers of vehicles that will use flex-fuel - ethanol petroleum mix - rather than diesel.
EPE assessed the growth in demand by examining the increase in tax revenue from the country's light vehicle fleet. By looking at more than 88 per cent of the vehicles sold with engines using flex-fuel, EPE saw that there was an annual growth of 4.8 per cent in tax.
The report shows that the number of light vehicles on Brazil's roads will pass 23.2 million this year and reach 37.5 million by 2017.
During this same period, the demand for flex-fuel is forecast to rise from 29.6 per cent to 73.6 per cent.
The report says that alcohol based fuel for these vehicles will continue to be the preferred fuel and demand for this is anticipated to grow at a rate of 11.3 per cent annually up to 2017 rising from 20.3 billion litres this year to 53.2 billion litres in the 10 years.
The report also anticipates that exports of ethanol will increase at a similar rate from 4.2 billion litres this year to 8.3 billion litres in the next 10 years.
At present, the USA is the main destination for most of Brazil's ethanol exports, but the US is expected to import less as Japan gains its share of the Brazilian exports. Over the next decade, Japan's imports of ethanol from Brazil are expected to increase by 36.2 per cent to 3 billion litres.
EPE says that it expects Brazil to remain a leader in the ethanol export market and trade should grow along with the growth in the country's production and the industry's infrastructure. However, the report adds that there is also anticipated a worldwide growth in the production of ethanol, which will be building a base market in each producing country.
EPE says that in order to meet this increased domestic and global demand for ethanol, the industry in Brazil will have to grow and it expects that there will be a total of 246 plants in operation over the next 10 years.
At present 44 per cent of the necessary plants - 114 plants - are either under construction or are already in operation. There are 23 plants in the planning stage that could be operational by 2010 and EPE estimates that there will be a need to build another 109 plants between 2011 and 2017 if Brazil is going to meet the expected rise in demand.
The reports shows that Brazil has the perfect natural resources to produce ethanol as there is plenty of arable land available - about 100 million hectares that could be turned over to agriculture without touching the rain forest areas of the Amazon. It adds that it also has the perfect growing conditions for its main source of ethanol - sugar cane. With the land and climate conditions being suitable for ethanol sugar growing, together with advanced technology, the use of the land for ethanol does not impact on any other aspect of food production and at the same time it has the capacity to create a large number of agricultural jobs.
EPE says that Brazil's production of ethanol from sugar cane goes a long way to helping in the fight against greenhouse gas emissions and it is also cost effective in comparison to the production of petroleum/gasoline. Ethanol production also has further uses other than fuel in the polymer industry.
"This had been achieved through technological advances achieved by the sugar-ethanol sector both in the agricultural and industrial regions alongside improvements in management along the production chain," the report says.
"These factors have kept the Brazilian industry competitive in world markets."
The full report, Perspectives for Ethanol in Brazil, is available on the Empresa de Pesquisa Energétic website in Portuguese.
