In 2018, Brazil produced 431 million liters (113.9 million gallons) of corn ethanol. For the 2024-’25 crop year (April to March), the country is expected to produce north of 6 billion liters (1.6 billion gallons). Corn ethanol now accounts for 18% to 20% of Brazil’s total ethanol production, up from about 2% in 2018.
“It’s a remarkable growth—stunning growth,” says Hagan Rose, director of international sales and marketing for Eco-Energy.
The expansion is not relegated to just corn ethanol, as Brazil has also increased its sugarcane ethanol production from 25 billion liters (6.6 billion gallons) to 33.5 billion (8.8 billion gallons) in the same time period. Rose says that’s also “good growth.”
Brazil’s Ministry of Mines and Energy says the country saw a 48% increase in production capacity between 2018 and 2023 alone. “With the approval by the National Congress of the RenovaBio Law, the receptivity on the part of the productive agents and the expectation of an increase in market share brought the favorable environment for new investments in the expansion of the production capacity of biofuels in the country,” the MME wrote in a response to questions from Ethanol Producer Magazine.
Rose has theories for ethanol’s growth in Brazil, as does David Lococo, president and CEO of Katzen, a U.S.-based technology design and engineering firm that recently completed the world’s largest dry mill corn ethanol plant for Brazil’s largest corn ethanol producer, INPASA (Industria Paraguaya de Alcoholes S.A.). Both emphasize agricultural prowess and volatile sugarcane prices.
All that increased production will be necessary, as Brazil boosts its blending mandate to 35% under RenovaBio. Still, both Rose and Lococo say they remain bullish on U.S. ethanol for world exports, with no concerns that Brazil’s new supply will edge the U.S. out of the world market in the near-term.
New Development
INPASA’s new production came online at its Sinop, Mato Grosso, location in 2024, boosting its capacity to more than 6,000 cubic meters per day, 2.1 billion liters annually (554.7 MMgy), Lococo says. “That makes it the largest dry mill corn ethanol plant that we know of, anywhere.”
Katzen initially began working with INPASA in Paraguay a few years ago to help design a retrofit for its distillation system, to include a molecular sieve. “That project was very successful, they were pleased with our performance and they asked us to build a brand new standalone plant in Paraguay. From that, we co-developed a strategy for fermentation and distillation and evaporation that was very profitable and worked very well. And they decided that the future of ethanol was bright for them, but the future of ethanol in the short-term was Brazil, so they opened operations in Brazil.”
INPASA has 14 plants in Brazil and accounts for more than 50% of the country’s corn ethanol production capacity. Katzen has three more corn ethanol projects in the works with INPASA, as well as a project with a company out of southern Brazil named 3tentos that is expected to come online in November 2025. Even new producers are reaching out to Katzen, interested in traditional corn ethanol.
“We’re actively pursuing expansion in Brazil because Brazil is definitely growing its market for corn ethanol,” Lococo says. “The market is growing tremendously.”
In addition, the Brazilian Development Bank (BNDES) recently announced financial support for two corn ethanol plants, together boosting production capacity by 130 MMgy. BNDES will contribute R$500 million ($87.86 million) to a project under development by Alvorada Bioenergia, part of the Alvorada Agricultural Group, in Canarana, Mato Grosso. Another R$500 million will go toward a Campo Mourão, Paraná, facility under development by Coamo Agroindustrial Cooperativa.
RenovaBio
“I think RenovaBio is having an impact,” Lococo says of ethanol expansion in Brazil. “It’s driving dollars into that marketplace.”
Brazil’s RenovaBio legislation was implemented in 2017, a result of the Paris Agreement. The initial goal was to reduce greenhouse gas emission by 37% in 2025, 43% in 2030, from a 2005 baseline.
“The policy takes into account the relationship between energy efficiency and the reduction of GHG emissions in order to assist in the decarbonization of the Brazilian transport matrix, also contributing to energy security, market predictability and the development of the green economy in Brazil,” MME wrote to EPM.
“It should be noted that, after the institution of RenovaBio, the Brazilian government increased its ambitions in relation to decarbonization,” MME added. “The latest commitment, signed in Baku (Azerbaijan) during COP29 provides for the reduction of emissions between 59% and 67% in 2035, taking into account 2005 emissions, which reinforces the role of biofuels in the decarbonization of the transport sector.”
During the COVID-19 pandemic, adverse prices and reduction in ethanol consumption prompted a decrease in blending biodiesel with mineral diesel, MME added. “With the resumption of normality in agricultural markets, the production and consumption of biofuels grew again in 2023 and we are back on the trajectory necessary to meet the goals set for 2030.”
‘Two-Fold Story’
While RenovaBio might be helping to drive development, Rose says Brazil’s corn ethanol boom is largely a “two-fold story:” year-round opportunity for ethanol from corn; and pressure on the sugarcane/ethanol mix based on weather, crop conditions and prices.
Brazil now does a two-crop rotation each year—largely soybeans and corn. “It’s a real success story for Brazilian agriculture to find that second crop over soybeans—find a use for the material to keep it domestic.”
The construction of traditional U.S. ethanol plants in Brazil allows year-round processing of corn. “Without ethanol, it would be very difficult to grow the corn and move the corn on its own,” Rose says, adding the agricultural infrastructure there is challenging, with high costs to move corn to port and export.
Corn is also stable as an ethanol feedstock. “The price of sugar overrides the market in determining what you’re going to make,” Rose says of sugarcane as a feedstock. “Most processors make the decision at the beginning of the season.
“What stands out to me is sugar ethanol has always been the baseload in Brazil and is still by far the largest production of ethanol in Brazil. However, the crop changes,” he adds. “The conditions change and provide more or less sugarcane for ethanol every year.”
The consistent supply of corn ethanol lends confidence to support the higher blend.
“They have the most aggressive blend in the world and certainly want to support their ag community and become more self-sufficient for their energy,” Rose says.
Lococo also emphasizes the traditional U.S. corn ethanol plants in Brazil gaining a foothold and showing profitability, as well as the benefit of a two-crop rotation. “Their productivity is greater compared to U.S. plants supported by the same amount of land. It also drives down their carbon intensity score, so their corn ethanol plants look better when evaluated against global carbon intensity metrics.”
Rose avoids the word “better” when discussing Brazil’s corn ethanol CI. “The fact that Brazil runs two crops in a year does allow them to provide some opportunity for the feedstock for corn ethanol to have a sharp score. I won’t say that it’s better.”
But neither Rose nor Lococo anticipate Brazil’s corn ethanol will move to the world market in significant quantities.
Bullish on U.S. Ethanol
Only recently has the world market seen Brazilian corn ethanol, headed to the European Union, Rose says. “We have seen that happen over the last two crop years.” Brazil’s main markets for its sugarcane ethanol have been the U.S. and the EU.
“We do anticipate that Brazil will be less of an exporter to the world,” Rose says. “The U.S. market has found cheap feedstock and lower prices on ethanol than we’ve seen in the last several years. … I think the U.S. is in a great position for the next crop year as Brazil sees a challenged sugar crop, a smaller sugar crop, and still has a growing corn market.”
Lococo agrees. “I’m bullish on U.S. ethanol still. I think, depending on administration and politics, I think the U.S. demand is going to go up for ethanol, especially as there’s more pressure to use E15 throughout the year. … I don't see Brazil’s exports going up for a while anyway, because of their new legislation and future law increasing ethanol blending to 35%, which is going to increase their internal demand.”
Lococo says Brazil is projected to have 50 billion liters (13.2 billion gallons) of internal demand, with production hovering around 35 billion to 40 billion liters (10.6 billion gallons) for this crop year.
In addition, Brazil’s Chamber of Foreign Trade in October rejected a request from the U.S. Grains Council and Brazilian Association of Fuel Importers to remove an 18% import tariff on U.S. ethanol, further encouraging use of domestic ethanol to satisfy the increased blend mandate.
“Corn ethanol continues to grow and will continue to grow in Brazil,” Rose says. “The economics make sense and the market can absorb to a great extent the ethanol being produced in Brazil. I expect to see this continue to grow.”
Lococo adds, “I think the government is recognizing the benefit ethanol is having for farmers and for Brazil to have its own energy source and agricultural support, and that’s kind of the story of ethanol wherever it goes.”
Brazil’s ethanol sector will face its own challenges as it expands, but Lococo sees potential there. “It represents exciting opportunities for companies like Katzen, because we get to figure out the solutions to those problems.”
“Do I think that the growth of Brazilian corn could eventually pressure world exports? I believe world demand will grow to keep both the U.S. and Brazil in the game,” Rose says.
