The Powerful Brazilian Ethanol Market Becomes Key Player for Industry in Transition to Vehicle Electrification

Brazil, The Largest Global Producer of Ethanol and The Third in Corn Production, Will Be a Key Player in The Industry for The Transition to Electric Cars

Every day, the powerful Brazilian market in ethanol production has gained more ground in the Brazilian territory. In the 2019/2020 harvest, the National Supply Company (Conab) recorded the largest ethanol production in history, with a total of 35.6 billion liters derived from sugarcane and corn.

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This increase of 7.5% compared to the previous year shows how ethanol has gained ground in the country and gives you the chance to position yourself amid this expressive movement of ethanol in order to seek astronomical profits.

Brazil: The Largest Global Producer Of Ethanol

Brazil is the world’s largest producer of sugarcane and therefore stands out significantly in ethanol production. The country holds a very important position in the global production of the fuel, ranking second worldwide. It produces, on average, 400 thousand liters of fuel per day.

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In July 2021, positive data regarding this production was released. A survey coordinated by the National Center for Energy and Materials Research (CNPEM) announced that sugarcane ethanol produced in Brazil pollutes less than previously thought.

Compared to earlier data, the study found a 19% reduction in the total emissions of the biofuel.

And it’s not just in ethanol from sugarcane that the country stands out! After all, Brazil is a major player in commodities.

Brazil Is The Third Largest Global Producer Of Corn

Corn has also gained significant ground in the production of biofuel. Brazil is the third largest global producer of corn. IBGE released a total production forecast of 103.5 million tons of corn for 2021, achieving a record harvest.

Synchronizing with these numbers, plants that use corn for ethanol production have increased their outputs, along with new investments.

In the new harvest, ethanol production is expected to be 3.38 billion liters.

The National Corn Ethanol Union (Unem) believes that this sector will expand by 200% by 2028, reaching 8 billion liters of ethanol per harvest.

Countries Like India Are Studying To Expand The Use Of Vegetable Fuel And Brazil Will Be The Protagonist

The Indian government’s announcement that the country will invest in replacing fossil fuels with ethanol (which there costs between R$ 4.20 and R$ 4.35 per liter) as its automotive energy base, has created a real stir in the sector here in Brazil.

Brazil can transfer its expertise in ethanol use to India, which is currently the fifth largest vehicle producer in the world (3.4 million units between passenger and light commercial vehicles in 2020) and one of the fastest-growing markets in the world (over 28% just in the first quarter of this year), creating a furor.

Although the plan announced by the Indians has just one goal: to prepare the sector for electrification, reducing dependence on fossil fuels as electric cars take larger and larger shares. Brazilian ethanol has become a light at the end of the tunnel for the turning point in the industry during the transition to vehicle electrification.

The latest report from BloombergNEF indicates that while electric models will reach a 30% share of the global market as early as 2030, the same will only occur in India a decade later.

By then, the country should have already implemented a renewable energy model. “In five years, we will have modern electric platforms, while cars with combustion engines will gradually be phased out,” explains the administrative vice president of Mahindra, Anish Shah.

The addition of 20% ethanol to Indian gasoline, by the 2023/24 biennium, is a stopgap measure, which also aims to curb inflation amid rising oil prices.

Today, Indian gasoline already contains 10% alcohol. “Starting April 1, 2023, our gasoline will include 20% alcohol, and for the exclusive use of ethanol, we are creating a complete production chain, generating jobs for farmers and in industrial facilities,” said the Indian Oil Secretary, Tarun Kapoor, to the Indian Times newspaper.