The Group, which has a crushing capacity of 24 million tons of sugarcane, will invest in biogas production

The São Martinho Group intends to carry out a investment of R$ 160 million in the biogas sector, with the objective of expanding its productions from sugarcane, informed Felipe Vicchiato, the company's financial director, through a conference call with analysts and investors held on Tuesday, 21 Also, the executive reported that he is studying profitable business models and technologies to decide whether the Group will, in fact, invest in the biogas sector by the end of this year.

As regards increases in sugarcane production costs in future quarters, Vicchiato says it is “very difficult to know” if they will remain in the market. For the director, particularly, he says he does not see the price of fertilizer fall in the following year, what happens is the opposite, the price of fertilizer usually rises.

He also reports that the company's strategy for investing in biogas is to depend as little as possible on fertilizers in sugarcane production, making it more assertive in its use and application. With regard to biodiesel, the executive observes that the price of biofuel may start to decline as soon as oil starts to fall. “But, for better or for worse, ethanol follows suit.”

Furthermore, the Group's director also says that currently the diesel spread is high and rising "much more" than gasoline, not only in Brazil, but worldwide. For Vicchiato, the plants that are far from the Port of Santos need to bear the cost of high freight to the place where it is established.

“It is getting too expensive. In these cases it is better to produce ethanol. Freight can reach R$ 200, R$ 250 per ton of sugar cane.” For him, the tendency is for costs to stop rising in the medium term. “But I don’t know if they will fall that much.”

Biogas and biomethane are in vast demand for investments

The biogas sector, developed from sugarcane, continues to expand at an accelerated pace in Brazil. The publication Panorama do Biogás no Brasil shows that in 2017 there were around 271 biogas plants in operation in Brazil, of which 51 plants were new. In the year 2021, in turn, the sum of biogas plants in operation increased to 755, with a total of 102 new plants.

Based on this same period, the production of biogas, made from sugarcane, increased from 1,12 billion to 2,35 billion cubic meters in Brazil. However, as it is an extremely attractive source of energy from an environmental point of view, since it is a source of energy from sugarcane, numerous initiatives and measures have recently been declared to provide the necessary security and encourage each more investments in the sector.

Investments in biofuel are increasingly favorable

According to Broadcast, the business case for investments in the biogas sector is becoming increasingly beneficial. Law nº 14.134/2021 (New Gas Law) and its regulation, Decree nº 10.712/2021, establish that any gas that is not defined in the definition of natural gas as dictated by the law has equivalent treatment, provided that it adheres to the established specifications by ANP, thus generating legal certainty for businesses and investments that can use the legal and regulatory basis of natural gas, produced from sugarcane.