Higher Brazil ethanol blend would take extra 3,5% sugar from market -Citi.
The Brazilian government’s proposal to increase ethanol blending in gasoline to 30% from 27% currently would lead to using an additional 3.5% of the country’s recoverable sugar to make ethanol, a study by Citi Research showed.
The government is about to send a draft bill on the proposal to Congress. It is likely to pass as the ethanol industry has the support of the powerful agricultural caucus.
Citi’s analyst Gabriel Barra said that if approved, the legislation will likely increase ethanol consumption in Brazil by 1.2 billion liters in the 2024/25 season to 36 billion liters.
🔥 What about we co-host a webinar? Let's educate, captivate, and convert the biofuels economy!
Biofuels Central is the global go-to online magazine for the biofuel market, we can help you host impactful webinars that become a global reference on your topic and are an evergreen source of leads. Click here to request more details
To cope with that increase, mills would need to use 3.5% more of the total recoverable sugar (TRS) from the sugarcane crop, reaching 62 million tonnes of TRS.
Around 90% of Brazilian ethanol is made from sugarcane, with the rest coming from corn. Mills use sucrose extracted from sugarcane to produce sugar and ethanol. The proportion will depend on the market.
A higher mandate for ethanol blending would limit sugar production. Other countries boosting biofuel use also face the same issue.
BMI, a research unit of Fitch Solutions, said in a report earlier this month that India’s ethanol program will cap the country’s future sugar exports. (Reporting by Marcelo Teixeira; Editing by Richard Chang)
READ the latest news shaping the biofuels market at Biofuels Central
Higher Brazil ethanol blend would take extra 3.5% sugar from market -Citi, July 19, 2023
