BRAZILIAN GOVERNMENT EXPECTS TO HARVEST 1 BILLION TONS OF SUGARCANE BY 2015

(Note: a good back of the envelope calculation to compare oil and sugarcane ethanol is that one ton of the feedstock produces the energy equivalent of one barrel of oil. This figure does not take into account the bagasse and the straw, which account for 2/3 of the plant’s total energy content).

Henrique Oliveira

In order to raise output to meet rising world demand for ethanol, Brazilian agents, in the public and private sectors, are contemplating both the expansion of cultivated area and enhanced efficiency in the sugarcane-growing and ethanol-producing processes.

There is an abundance of land for sugarcane, which yields eight times more energy than corn. To understand by just how much Brazil can increase its output, look no further than the example of Sao Paulo state, which produces 60% of Brazil’s ethanol – and occupies just under 3% of the country’s territory.

Government agents, however, have not been counting solely on an expansion of planted area to increase output. They have also been committing larger sums to R&D in agronomy, with institutions such as the ESALQ (the acronym, in Portuguese, for the Luis de Queiroz Higher School of Agronomy) garnering international attention (the institution’s agents, incidentally, conduct weekly reviews of ethanol prices and have become the de facto setters of the commodity’s price in Brazil). Among other activities, ESALQ develops new strains of sugarcane.

Refineries have also learned to reduce costs by burning the sugarcane after it has been crushed and its juice, extracted. The crushed sugarcane, known as bagasse, today accounts for 8% of a refinery’s revenues, as the excess power generated can be sold to the national electricity grid.

And Brazilian government agencies have been working with foreign institutions to help other countries produce sugarcane at industrial levels. This mitigates the risk inherent to relying on sugarcane for ethanol and boosts confidence in the fuel’s capability to meet international energy requirements.

Brazil’s IEA (Agricultural Economics Institute), an institute within the Agriculture and Supply Secretariat of the State of Sao Paulo, has projected that the country will bring in close to one billion tons in the 2015-16 harvest, which is expected to cover an area of 12.2 million hectares.

Factors taken into account include the development of technologies to produce ethanol through the hydrolysis of bagasse and sugarcane straw, a process which may reduce the pressure to expand the use of land. Changes in the labor structure within the industry, which is increasingly mechanized, may also contribute to reduced expansion (and increased conservation of impacted ecosystems).

Other factors contemplated by IEA in its forecast include domestic delays in implementing ethanol programs, protectionist barriers in the U.S. and Europe, and demand for sugar on international markets. More information is available on IEA’s website.

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