Brazil could double ethanol output by 2014

Aug 04, 2006 02:00 AM

Brazil could nearly double sugar cane-based ethanol production to 31 bn litres in 2014 by planting more cane and using new technology, the President of Sao Paulo's Cane Agroindustry Union said.
Sugar cane-based ethanol helps power Brazil's growing fleet of flex-fuel cars that run on ethanol, gasoline, or a blend of the two, helping the country become energy self-sufficient.

Ethanol's appeal is growing as motorists around the world seek a cheaper, cleaner fuel than gasoline, whose global price has soared 285 % in three years. Brazil is the world's biggest ethanol exporter, yet only 15 % of its output is exported.
Eduardo Pereira de Carvalho said $ 10 bn in investment was planned for 92 greenfield cane mills. These will include 17 in the northeast and 75 in the centre-south, with 44 of those in Sao Paulo state, Brazil's main cane grower.

Brazil could double production if about two-thirds of the planned projects are executed, Carvalho told after he addressed a Hart fuels and refining conference in Rio de Janeiro. Carvalho said some 5.5 mm hectares were planted with sugar cane in Brazil, compared with a total crop area of 60 mm ha and 300 mm ha of livestock pasture.
"Over the next 15 years, an extra 100 mm hectares could be planted with cane, primarily on pasture land," Carvalho said, adding that the expansion would not involve felling trees. Sao Paulo state alone has some 10 mm hectares of pasture that could be converted to sugar cane, he added.

Ethanol yields are also seen rising due to the planting of new varieties and use of new technology to process cane bagasse, or waste. The ratio of cane crushed into ethanol is seen rising to 58 %, from an estimated 50 % in 2006/07, to meet strong world and domestic demand.
Carvalho said Brazilian ethanol shipments to the United States have risen sharply over the past three months, despite a 54 cents-per-gallon import tariff. Brazilian cane-based ethanol shipped to the US West coast is about half the cost of US corn ethanol and much moreenergy efficient, according to Unica.

Although US ethanol production is surging, the United States still imports ethanol to meet surging demand after refiners phased out production of methyl tertiary butyl ether (MTBE), a widely used fuel additive that pollutes water. The US is importing 103.5 mm gallons of ethanol a year under the Caribbean Basin Initiative which allows up to 7 % of the US's total import needs duty free, according to Brazilian ethanol exporter Coimex.
Coimex, along with other companies such as Brazil's Crystalsev and the US's Cargill have built ethanol distilleries in the region to supply the growing US market.

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