Brazil Could See Big Biofuel Investment Between 2025 and 2034

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Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--Brazil's Energy Ministry and the Energy Research Company (EPE) have published a report suggesting that investments into the biofuel sector will surpass 1 trillion Brazilian reals (US$166 billion) between 2025 and 2034.

Overall, almost 100 billion reals (US$16 billion) is expected to be invested in capital projects, with the remaining 924 billion reals (US$149 billion) for continued operations. The study contemplates a higher production of ethanol, biodiesel, biomethane and sustainable aviation fuel (SAF) as well as innovations in green diesel and biogenic carbon capture and storage.

Brazil's energy minister, Alexandre Silveira, said, "We are beginning a new era for the Brazilian energy sector with the fuel of the future. The figures prove the transformative potential of biofuels, not only to boost the economy but also to place Brazil at the forefront of the global energy transition. We will continue to combine our unparalleled vocation for producing green fuels with environmental responsibility and sustainable growth."

Most investments are planned for ethanol production operations, accounting for 59%. From those, 62.1 billion reals (US$10 billion) will be spent on capital projects, while the remaining 771.3 billion reals (US$128 billion) will be destined for operations.

In the next 10 years, ethanol production is expected to increase to 48.5 billion litres, based on EPE's projections. Most of the Brazilian ethanol is produced from sugarcane, accounting for 384.2 million tons by 2034, or 53% of the total ethanol output.

Ethanol is used in Brazil as an alternative type of fuel, and it is also part of the mandatory blend of gasoline. The current government announced the increase of ethanol blending in gasoline from 22% to 27%, with a projection to increase to 30% by 2030.

For its part, investments into biodiesel could reach 14.5 billion reals (US$2.3 billion) in capital spending and 77.5 billion reals (US$12.9 billion) in operational expenses until 2034. Meanwhile, according to EPE, biodiesel output is expected to increase to 83.5 billion litres by 2034.

Biodiesel, which is also mixed with diesel to create a special blend, is expected to reach a mandatory level in Brazil's diesel of 20% by 2030.

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