USDA FAS: Brazil’s ethanol imports to decrease in 2019

By Matt Thompson | September 05, 2019

USDA’s Foreign Agricultural Service’s annual Brazil Biofuels report estimates that the country will import less ethanol in the coming year. The report, which was released in August, says that the country’s 2019 ethanol imports “are projected at 1.2 billion liters, a decrease of 495 million liters relative to the previous calendar year.”

According to the report, the decrease in imports are a result of growing domestic production. “Total ethanol production for fuel use is estimated at 31.387 billion liters,” the report says, which is a 3 percent increase over 2018. The country’s demand for the fuel ethanol is estimated to be 33.93 liters in 2019, meaning the deficit will be made up by imports, most of which come from the U.S. Brazil recently announced it raised it’s tariff rate quota, allowing the import 750 million liters per year of U.S. ethanol that isn’t subject to the 20 percent tariff.

Brazil’s 370 sugar-ethanol mills give the country a hydrated ethanol production capacity of 43.105 billion liters. However, the report notes local conditions that prevent the country’s industry from producing at it’s full ethanol capacity. “… the industry responds to the ratio of 40:60 to switch between sugar and ethanol production or vice versa from harvest to harvest,” the report says. “Once producing units adjust their plants to produce a set ratio of sugar/ethanol in a given year, there is much less flexibility to change it during the crushing season.”

The report also outlines the country’s National Biofuels Policy, RenovaBio, which is expected to be implemented in December of this year. The policy will set annual carbon intensity reduction targets, issue decarbonization credits, and certify biofuels by efficiency in reducing greenhouse gas emissions, in order to meet the country’s commitments under the Paris climate agreement. Brazil mandates that gasoline be blended with 27 percent ethanol. The mandate has been in place since 2016.

View the full report here.