Corn Ethanol Expands, but Sustainability Remains a Challenge

by Mario Camera (Globo Rural — São Paulo/Valor International) The expansion of corn ethanol has brought environmental and social concerns. In Europe, the “food or fuel” movement questions the use of land to produce biofuel—including encroachment on forested areas—while in Brazil there are concerns that wood from illegal deforestation may be used to fuel plant boilers.

Analysts note that, unlike Europe, Brazil produces two crops a year, reducing competition for land and food production. Corn ethanol primarily uses second-crop corn, generally planted on the same land after the soybean harvest. The biofuel also produces an ingredient for livestock feed: dried distiller’s grains (DDG), a protein-rich meal left over from corn processing. Its use allows more animals to be raised on less land, reducing the need for pasture.

Marcos Jank, coordinator of Insper Agro Global, argues that the Brazilian model shows crop and livestock production can grow together through their integration and the use of the second crop. Soybean and corn output has increased alongside ethanol production without requiring a proportional expansion of cultivated land, he noted.

FS, Brazil’s second-largest corn ethanol producer and an industry pioneer, was founded after U.S. businesspeople visiting farms in Mato Grosso in 2011 were surprised to see part of the local corn crop rotting along roadsides.

“The corn was worth one-third of what it cost to ship it to Santos,” FS President Rafael Abud said, explaining that a bag of corn could be worth as little as R$8 while transportation cost R$25. The federal government had to subsidize freight to assist farmers.

For investors accustomed to producing corn ethanol in the United States, it made sense to build plants near the farms and turn the surplus into fuel. Brazil now has 29 biorefineries in operation and nearly 30 new projects that have either been authorized or are planned, according to a survey by the National Corn Ethanol Union (Unem). Some of the new plants can process both sugarcane and corn, allowing year-round production.

The industry has also expanded its supply of animal-feed ingredients beyond DDG by using the portion of the grain not converted into fuel.

In October, global logistics giant Maersk fueled a vessel with bioethanol in Singapore in the largest operation of its kind to date. After a pilot operation in July, the Port of Santos announced last week that it would begin regularly fueling ships with ethanol. The Santos Port Authority said 159 vessels can already use the biofuel and another 450 are expected to be delivered by 2030.

Adoption of the biofuel, however, still depends on factors such as production costs and international rules for reducing maritime transportation emissions. In aviation, ethanol can be used to produce sustainable aviation fuel (SAF), but its still-high price compared with conventional jet fuel is hindering expansion.

In Paulínia, São Paulo, JetBio, which is linked to FS’s controlling group, plans to produce renewable fuels from ethanol in a project involving $2 billion in investment and processing capacity of up to 1.8 billion liters a year. “This refinery will be able to produce either 100% SAF or 100% renewable diesel from ethanol,” Abud said. An investment decision is expected in 2027.

Entering international markets may also require tighter controls over the origin of the corn and the emissions associated with its production. In aviation, sustainability rules consider the entire supply chain, from raw-material cultivation to final use, including potential changes in land use. Alice Thuault, executive director of Instituto Centro de Vida (ICV), noted that Brazil has systems for monitoring deforestation but still lacks agreements among the sectors involved and access to information about suppliers’ environmental compliance.

The Mato Grosso State Prosecutor’s Office is investigating the possible clearing of native vegetation to supply wood for plant boilers. The Mato Grosso Reforesters Association said more than half of the firewood the industry consumes comes from native vegetation and is sold for as little as half the price of planted eucalyptus. Jank argues that this dependence undermines the fuel’s environmental premise. “Cutting down a forest to produce biofuel is an enormous contradiction.”

An Itaú BBA report says supplying plant furnaces could require about 440,000 hectares of planted eucalyptus by the end of 2026. That area could nearly double by 2030 if the industry relies solely on this biomass source. READ MORE