Brazil: Biofuels Digest’s 10 Top Trends For 2014

by Jim Lane (Biofuels Digest's) ... 1. Feedstock diversification.
If you thought it was all cane, cane, cane, think again. There’s a lot of movement on sorghum, and castor beans — and even some on corn.
Sorghum. The biggest news of late was from NexSteppe, which reported this week that it sold more than 1,000 hectares (2,500 acres) of its Palo Alto high biomass sorghums for biopower in Brazil this past growing season. This makes it the market share leader in the fast-growing market for bioenergy sorghums in Brazil, with 65% market share.
Yields vary by location, but NexSteppe CEO Anna Rath told the Digest that “50-60 wet tons or ~25 dry tons per hectare is a conservative expectation under “ordinary” conditions.”
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Corn. ...
Castor bean. ...
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2. Soaring sales
Ethanol. Domestic sales during 2013/14 reached an all-time high of 23.07 billion liters, compared to 18.68 billion liters during the previous season. Hydrous ethanol sales saw more than a 16% increase while anhydrous sales jumped nearly 36%.
Biodiesel. The ANP’s bimonthly biodiesel auction held on Friday saw 463.8 million liters sold to supply the country’s B5 blending mandate. A total of 735.2 million liters were offered at auction with more than 98% of it complying with the social seal standard even though only a minimum of 80% of the volume had to comply with the standard. The average price was BRL1.88 per liter, 23% lower than the reference price.
3. Higher blends
Heading for 27.5%? Earlier this week, the agriculture ministry has confirmed that it is looking to increase the blend of anhydrous ethanol in gasoline to 27.5% from the current 25%. Such a move is expected to reduce Petrobras’ fuel imports, helping to offset some of its losses. The Brazilian stock exchange BOVESPA responded favorable to Petrobras on Friday after the confirmation was announced.
4. Exports and Imports
US market? Soaring ethanol prices due to rail bottlenecks across the country has led the US to buy ethanol from Brazil rather than vice-versa as has become common during the latter’s inter-harvest period. About 5.3 million gallons of Copersucar ethanol is set to be loaded this week in Santos, arriving in Tampa a few weeks later.
EU imports? In February, we reported that multi-year low prices for ethanol in Rotterdam has traders looking to export to Brazil, where the inter-crop season typically leads to shortages from January through April. Dry weather may lead to a later-than-usual start to the crush which could extend the demand period for ethanol imports.
5. Finance.
Last month, the Commerzbank, Inter-American Development Bank and Banco Pine S.A. closed a $115 million syndicated A/B loan to expand access to financing for environmentally sustainable projects in Brazil. The Green Line Finance Partnership entails a $75 million A loan from the IDB and $40 million B loan from Commerzbank.
With the demand for energy for both domestic and industrial purposes expected to expand 60 percent by 2021, Brazil’s energy matrix will likely shift toward a higher concentration of renewable energies, most notably energy from sugar cane derivatives and other renewables such as wind energy, small hydroelectric plants and biomass.
The Green Line Finance Partnership with Banco Pine will increase access to adequate financing for transactions, particularly in renewable energy sectors that promote environmentally sustainable initiatives and reduce the impact on climate change in Brazil.
6. Consolidation
In December, we reported that another 20 sugarcane mills are expected to shut down in the next few years, following in the footsteps of the more than 50 that have been shuttered since 2007, even though the government agreed to boost gasoline prices by 4%. The move to reduce subsidies on gasoline isn’t expected to be enough to boost demand for ethanol sufficiently to save the mills.
7. Engines. In December, we reported that the Sao Paolo Research Foundation FAPESP and Peugeot Citroën approved a proposal for the creation of a Research and Engineering Center focused on the development of biofuel-powered combustion engines.
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8. Restarts. ...
9. Climate Change. ...
10. 3 new monster advanced biofuels & renewable oils plants