Brazil ethanol output favours corn over cane
Brazil’s corn ethanol industry is booming, driven by higher fuel mandates (E30, B15) and abundant safrinha corn. Output reached 8.2 billion litres in 2024-25, set to nearly double by 2032. With 25 plants operating and more underway, rising domestic use may limit exports, tightening global feed grain supplies.
THE RAPID expansion of Brazil’s corn ethanol industry has become a critical component in meeting the South American country’s escalating demand for renewable fuel after the government raised the nation’s ethanol mandate yet again. While ethanol production from sugarcane, historically Brazil’s primary feedstock, has stagnated in recent years, corn-based ethanol output has surged on the back of growing domestic corn production.
The Dourados district of Mato Grosso is one of many where a swing into corn and out of sugarcane is being seen. Pictured is a crop of GALO VIP3 corn planted in February and grown by Jovelino Miranda.
On June 25, Brazil’s National Energy Policy Council (CNPE), a division of the Ministry of Mines and Energy, announced an increase in the mandatory blend of ethanol in petrol from 27pc to 30pc (E30), adding more than 1 billion litres of ethanol demand annually. The mandatory blend of biodiesel in diesel was also increased from 14pc to 15pc (B15), with both changes effective from August 1. The increased mandates aim to eliminate gasoline imports while reducing emissions and fuel prices. Expanded use of biofuels will also boost domestic biofuel producers.
Brazil is the world’s second-largest ethanol producer and third-largest biodiesel producer, and the new biofuels policy is expected to generate an exportable surplus of approximately 700 million litres of petroleum products annually. The move to E30 is also projected to stimulate more than 10 billion real (US$1.85 billion) of infrastructure investment and create more than 50,000 jobs. The transition to B15 is expected to generate more than 5 billion real (US$925 million) of new investment in soybean mills and crushing facilities, while creating more than 4000 jobs.
Ethanol boosts domestic use
While much of Brazil’s grain output has typically been exported to international consumers, the trajectory for corn is shifting. Although corn exports have risen over the past decade, domestic consumption has also increased, primarily driven by exponential growth in the corn-based ethanol industry. According to the corn industry ethanol group UNEM, corn ethanol currently represents 23pc of total ethanol production in Brazil, and it expects it to grow to around a third in 2025-26 and account for more than 40pc of national output over the next decade.
Consequently, the domestic corn crush for ethanol production has grown from 400,000t in the 2015/16 season to 18.3Mt in 2024-25, accounting for around 15pc of the nation’s total corn output. It has jumped by 85pc since the 2022-23 season, when the crush was only 9.9Mt. Brazil’s growing corn ethanol capacity reflects the country’s broader push toward renewable energy and its ambition to become a global leader in sustainable biofuels.
According to the domestic sugar and ethanol industry group UNICA, the nation’s ethanol production from corn rose nearly 31pc in the 2024-25 cycle, reaching 8.2 billion litres. And given the rapid rate of investment and infrastructure development, production is poised to almost double to 16 billion litres by 2032, pushing corn for ethanol demand to almost 36Mt. Meanwhile, sugarcane ethanol output has remained relatively flat since the start of the decade, sitting at around 28 billion litres annually, maintaining Brazil’s position as the world’s largest producer.
The construction of corn-based ethanol processing plants has primarily been concentrated in the centre-west states of Brazil, a region where the second-crop corn, or safrinha corn, production has skyrocketed over the past decade. In fact, the rapid growth in safrinha corn output has been a significant driver of the corn ethanol evolution and is expected to generate substantial economic benefits for the country’s agricultural regions.
Brazil has been producing corn-based ethanol since 2014, with the early offtake coming from sugar mills that had been modified to process corn when sugarcane was not available during the summer wet season. The country’s first dedicated corn ethanol plant opened in Lucas do Rio Verde, Mato Grosso, in 2017.
The industry utilises three types of plants: full plants, which are corn-only facilities, flex plants, which are adapted sugarcane mills that usually process sugarcane but switch to corn for about three months during the “inter-harvest” period, and flex-full plants, which can process both feed stocks simultaneously, allowing year-round operations.
More plants being built
There are currently 25 operational corn ethanol plants in Brazil, with an additional 15 facilities under construction. At least 12 more have reportedly received regulatory approval. The state of Mato Grosso leads production, followed by Goiás and Mato Grosso do Sul. Collectively, these three states account for around 60pc of the country’s annual corn output. Paraná and São Paulo are currently minor contributors to national corn ethanol capacity. Almost all of the corn-only facilities are located in Mato Grosso.
Corn ethanol holds key benefits over sugarcane-based ethanol. Its longer storage life and lower transportation costs enable regional refining, close to the main corn production areas. This provides a more stable ethanol supply, especially during the sugarcane off-season.
The increase in domestic demand for corn is not confined to the ethanol sector. Demand from the stockfeed industry, in particular the poultry sector, is robust. Brazil is the world’s second-largest poultry producer and the largest poultry exporter globally. Domestic corn consumption has risen from 57.5Mt in 2015-16 to 92Mt in 2024-25, an increase of 60pc. Utilisation by the stockfeed sector in 2024-25 was around 64.5Mt, or 70.5pc of total consumption, and this is forecast to increase to 65.5Mt in 2025-26, or 69.3pc of the total.
Retaining more corn in the local market, whether it be for ethanol production or the stockfeed industry, is shifting expectations for Brazil’s role in the global market. Brazil’s share of the international export pie has grown significantly over the past five years. With escalating domestic demand, a real outcome is likely to be a decline in Brazil’s exportable surplus of corn in the coming years, reducing competition for other major exporters in the global marketplace and potentially exerting upward pressure on global feed grain prices.
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Source : Grain Central
