July 11, 2018 / 5:30 PM / 9 months ago

Brazil ethanol output could double by 2030 -gov't study

RIO DE JANEIRO, July 11 (Reuters) - Brazil’s ethanol production could double by 2030, boosted by growing investments in the sector due to the government’s RenovaBio program aimed at boosting the use of renewable fuels, according to a government study.

RenovaBio, which Congress approved in December, mandates that fuel distributors gradually increase the amount of biofuels they sell each year, helping the ethanol industry recover from years of competition with subsidized gas prices.

The study on prospects for ethanol by state energy think tank EPE is due to be published on Friday. José Mauro Coelho, EPE’s head of oil, gas and biofuel research, shared its findings in an interview.

According to the study’s most optimistic forecast, Brazil’s annual ethanol capacity could rise to 54 billion liters by 2030, from 27 billion today. Less optimistic scenarios forecast production of 43 billion and 49 billion liters by 2030.

To hit EPE’s most ambitious capacity target, the study said 26 new sugarcane mills would have to come online in the next dozen years. That would mean reversing a trend of mills going dormant or bankrupt in recent years as sugar prices fell to multi-year lows and ethanol struggled to compete at the pump.

Brazil’s ethanol production is largely based on sugarcane although some is produced from corn. EPE forecast an expansion of corn ethanol production to 3.4 billion liters by 2030.

“Corn ethanol is here to stay, especially in the country’s midwest,” said Coelho. “Flex mills using both corn and cane should expand in Brazil. It offers advantages to producers, because the harvests are in different periods.” (Reporting by Rodrigo Viga Gaier Editing by Frances Kerry)

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