Brazil. Biofuels Annual. Sep 2013 Nov. 10, 2013
1. Executive Summary
The present report includes the following sections: (1) Executive Summary; (2) Policy and Programs; (3) Bioethanol; (4) Biodiesel; (5) Advanced Biofuels; and, (6) Notes on Statistical Data.
2. Policy and Programs
2.1. Government Support Programs for Bioethanol
2.1.1. Regional Producer Subsidy
According to Provisional Measure (“Medida Provisoria”) # 615 from May 2013, small North-Northeast sugarcane growers affected by the drought during the 2011/12 crop are eligible for the Regional Producer Subsidy in the amount of R$ 12.00 per metric ton of sugarcane up to 10,000 metric tons/grower. Ethanol manufacturers are also eligible for R$ 0.20/liter of ethanol produced and marketed during the 2011/12 crop. Provisional Measure # 624 from August 2013 complements the aforementioned measure releasing R$ 148 million to 17,000 sugarcane growers affected by the worst drought in several years in Northeast Brazil.
2.1.2. Ethanol use mandate
According to Resolution # 1 from February 2013, of the Sugar and Ethanol Interministerial Council (CIMA), in May 2013, the percentage of ethanol blended to gasoline increased from 20 to 25 percent, due to expected higher sugarcane crop and higher availability of the product. According
to Provisional Measure (Medida Provisoria – MP) #532 of April/2011, the percentage of ethanol blended to gasoline can vary from 18 to 25 percent.
2.1.3. Tax incentives for ethanol
A. Tax incentives for ethanol-flex fuel vehicles
Note that taxes on flex cars are lower than taxes on gasoline powered cars, especially with regard to the IPI. No changes have been made in the tax structure for 2012.
B. Tax incentives for ethanol fuel
The CIDE (Contribution for Intervention in Economic Domain) value remains unchanged at zero for both ethanol and gasoline. Therefore, the GoB does not provide preferential treatment for ethanol under CIDE as it did prior to June 2012 when CIDE for gasoline was set to zero. CIDE funds are used to finance infrastructure works and maintenance of the transportation system, as well as finance environmental projects related to the oil and natural gas industry and; to pay subsidies, if determined by specific legislation, to ethanol, natural gas and oil derivates prices or distribution.
PIS/COFINS (Contribution to the Social Integration Program/Contribution for Financing Social Security) federal taxes are charged together. For gasoline, PIS/COFINS are set at R$0.2616/liter. In May 2013, through Provisional Measure # 613, the GOB created a PIS/CONFINS presumed credit for the ethanol industry which in practice dropped to zero the R$0.12/liter (R$0.048/liter on producers and R$0.072/liter on distributors) that applies to the product.
No changes have been made to the ICMS - State tax for circulation of goods and services. There are different tax regimes depending on the Brazilian state. ICMS charged on ethanol varies from 12 to 27 percent, with most states charging 25 percent. ICMS for gasoline varies from 25 to 31 percent.
2.1.4. Credit Lines
In March 2013, BNDES announced the continuity of the Prorenova, a credit line of R$4 billion (approximately US$ 1.75 billion) available until December 31, 2013, to finance the renewal and/or expansion of sugarcane fields. The interest rate dropped from 8.5-9.5 percent in 2012 to 5.5 percent in 2013. The payment is due within 72 months and an 18-month grace period.
In April 2013, the GOB through Resolution # 4,612 from the Brazilian Central Bank (BACEN) created a R$ 2 billion (approximately US$ 0.87 billion) credit line with a 7.7 percent interest rate to support ethanol storage. The reference price is set at R$ R$ 1.37/liter of anhydrous ethanol and R$ 1.21 for hydrous ethanol.
2.1.5. Ethanol Import Tariff
No changes have been made to the ethanol import tariff. In December, 2011, the GoB, through Resolution #94 of the Ministry of Development, Industry and Commerce (MDIC)/Chamber of Foreign Trade (CAMEX) extended the zero import tariff applied to ethanol with less than one percent water from December 31, 2011 to December 31, 2015.
Note that according to the Mercosul (Common Southern Market) agreement, the import tariff for ethanol is 20 percent, however, since April 2010, the product was included in the “list of exceptions” and cut to zero percent.
2.1.6. Ethanol Supply Contracts
The National Agency of Petroleum, Natural Gas and Biofuels (ANP) has regulated the ethanol sector since April 2011 with the enactment of Provisional Measure #532. Through Resolution # 67 of 2011, ANP began to monitor the marketing trade of anhydrous ethanol between producers and distributors as of April 2012.
Fuel distributors are required to adopt a yearly supply contract to meet purchasing targets. The target is equivalent to 90 percent of total gasoline C (gasoline blended with ethanol) sales from the previous year and will be enforced in the beginning of every crop year (April 1). If distributors choose not to set a supply contract and buy the product on a monthly basis (direct purchase), they are required to have stocks on the last day of the month equivalent to the volume of gasoline C marketed in the subsequent month of the previous year.
ANP summarized the operations for the 2012/13 sugarcane/ethanol crop as follow: 54 fuel distributors which represent 90 percent of the domestic market chose the yearly supply contract option whereas 78 distributors (10 percent of the market) opted for the direct purchase system. Note that all large distributors as well as many small ones where able to meet the requirements for the contract option.
2.2. Government Support Programs for Biodiesel
2.2.1. Biodiesel use mandate
The biodiesel use mandate has been set at 5 percent (B5) since 2010. Several industry proposals have advocated the gradual increase of the blend to 10 percent along the next few years. The National Agency of Petroleum, Natural Gas and Biofuels (ANP) reports that the National Council for Energy Policy (CNPE) has studied the possibility to increase the current blend to 7 percent in the recent future. No decision has been taken yet.
2.2.2 Biodiesel Stocks
In April 2013, the Ministry of Mines and Energy (MME) through “Portaria” # 116 set a new regulation to biodiesel stocks. The main feature is the introduction of the “option to buy” contract in which the buyers (basically, Petrobras) contract the right to pick up the product at any time at the biodiesel plant. The stocks will be mostly held at the plants. This measure aims to avoid the degradation of the product when stored at long periods by Petrobras.
2.2.3. Biodiesel Import Tariff
According to the Secretariat of Foreign Trade, the import tariff applied to biodiesel (NCM 3826.00.00) is set at 14 percent.
2.3. Biofuels in the Current Brazilian Energy Matrix
Environmental concerns make energy produced from biomass a key element toward sustainable development. The Ministry of Mines and Energy (MME) has set the increase of biofuels’ share in the Brazilian energy matrix as one of the policy directives for the sector.
Recent data reported by the MME show that the domestic supply of energy in 2012 was 283.7 million metric tons petroleum equivalent (tpe), a 4.1 percent increase compared to 2011 (272.4 million tpe).
Brazil remains the worldwide leading supplier of energy from renewable sources with 42.4 percent of the energy matrix from renewable sources in 2012 whereas it represents 8 percent of the total for the Economic Cooperation and Development (OECD) countries.
MME also reports that the total domestic consumption of energy in 2012 was 236.7 million tpe, a 3.4 increase compared to 2011 (228.7 million tpe), due to higher industrial activity. Industrial use (83.08 million tpe) and transportation (74.1 million tpe) represent the largest shares of energy use with 35.1 and 31.3 percent of the total, respectively.
Hydroelectric energy remains the major source of electric energy, making up to 77 percent of total supply.
2.4 Transport Fuel Consumption
Transport fuel projections assume a 3 percent growth rate in the Brazilian Growth Domestic Product (GDP). No information is available for diesel use breakdown.
Bioethanol is an alcohol made by fermenting the sugar components of plant materials such as corn and wheat starch, sugarcane, sugarbeet, sorghum, and cassava.
3.1. Brazilian Bioethanol Production, Supply and Demand
Sugarcane is virtually the exclusive source of feedstock for bioethanol production in Brazil. ATO/Sao Paulo has historically reported all figures related to the sugar-ethanol industry in marketing years (MY) and, therefore, made all necessary adjustments to convert from marketing to calendar years. The Brazilian official marketing year for sugarcane, sugar and ethanol production, as determined by the Brazilian government, remains May-April for the center-south producing states, although sugarcane crushing has started as early as late March in past years. The official marketing year for the North-Northeast is September-August.
Note: no Brazilian government entity or trade source maintains production figures on use “for fuel” or “other uses”. All bioethanol production figures are solely reported as hydrous and anhydrous volumes. According to post contacts, ethanol plants produce different specifications of hydrous and/or anhydrous, but make no distinction between fuel/other uses. The use for fuels/other uses (industrial, refined or neutral) are determined at the consumer level.
A. Production Estimates
Post projections are based on industry sources. To be in accordance with the actual feedstock production cycle, the following narrative describes sugarcane and ethanol production in marketing years (MY). Note that all necessary adjustments were made to convert production figures from MY to calendar years.
The Agricultural Trade Office (ATO)/Sao Paulo estimates the MY 2013/14 Brazilian sugarcane production at 640 million metric tons (mmt), up 48.1 mmt from MY 2012/13. The center-south (CS) region is expected to harvest 585 mmt of sugarcane, a 10 percent increase relative the previous crop (532.6 mmt), due to expected higher agricultural yields as a result of good weather conditions and adequate renewal of sugarcane stocks. ATO/Sao Paulo forecasts the North-Northeastern (NNE) production for MY 2013/14 at 55 mmt, down 3.5 mmt from the revised figure for MY 2012/13 (58.5 mmt) due to weather related problems (drought) that affected growing regions.
Total sucrose (total reducing sugar, TRS) content destined for sugar and ethanol production during MY 2013/14 is estimated at 48 and 52 percent, respectively, as opposed to an equal split of 50/50, respectively for MY 2012/13. Sugar-ethanol mills are likely to increase ethanol production due to an expected increase in the ethanol content blended with gasoline.
It is still too early to project MY 2014/15 production figures. More precise numbers should be available in the first quarter of 2014 with the development of feedstock from new sugarcane plantings and recovery from current harvested areas; e.g., sugarcane from second, third, fourth, fifth and older cuts; as well as projections for sugar and ethanol demand in both the domestic and international markets. The current production forecast is based on the assumption that regular weather conditions will prevail throughout the sugarcane production cycle.
Post projects sugarcane production for MY 2014/15 at 690 mmt, a 8 percent increase compared to the current crop, assuming historical stock renewal rates and agricultural yields.
ATO projects the 2014 total bioethanol production at 28.9 billion liters, up 9 percent from the 2013 estimate (26.6 billion liters). Ethanol for fuel production is forecast at 26.6 billion liters for 2014, a 2.3 billion liters increase over 2013 (24.3 billion liters).
B. Industrial Capacity
ATO/Sao Paulo has adjusted total industrial capacity for sugarcane crushing to 3.42 million metric tons/day, down 5 percent from previous crops, to reflect the reduction in the number of ethanol and sugar-ethanol plants in operation.
Ethanol production capacity for 2014 is forecast at 40.7 billion liters, equivalent to 2013. This figure reflects the lower number of ethanol and sugar-ethanol plants in operation. Ethanol installed industrial capacity depends on yearly decisions made by individual plants to produce sugar and/or ethanol. Post contacts report that the industry responds to the theoretical ratio of 40:60 to change from sugar to ethanol production or vice versa from harvest to harvest. 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.
Ethanol production capacity estimated in this report was based on production figures reported by UNICA. Post took the highest ethanol production figure in a given 15-day period, and extrapolated to the entire Center-south crushing season. A similar procedure was followed for Northeast production based on MAPA reports. Sugarcane crushed for ethanol production was calculated based on the actual production breakdown for sugar/ethanol as described in previous GAIN reports. On average, one metric ton of sugarcane produces 80.5 liters of ethanol.
C. New Investments/Shut Down of Ethanol Plants
The graphs below show revised data for the evolution of new/closed ethanol and sugar-ethanol plants as of MY 2005/06 as reported by UNICA. Investments in new greenfield projects remain scarce. UNICA estimates only three new plants for 2013/14.
Concurrently, several units have been closed in the past couple of years. UNICA projects that 12 units should close operations this season due to high debts, lack of profitability and the difficulties in getting credit. Note that some of the units have been acquired by larger and financially healthy groups.
Total number of sugar-ethanol mills in 2013 is estimated at 399 units, whereas total operating units for 2012 was 408.
D. Sugarcane and Ethanol Prices received by Producers
Sugarcane prices received by third party suppliers for major producing states are based on a formula that takes into account prices for sugar and ethanol prices both in the domestic and international markets. The State of Sao Paulo Sugarcane, Sugar and Ethanol Growers Council (CONSECANA) was the first to develop this formula for the state of Sao Paulo, the major producing state comprising roughly 60 percent of the Brazilian production.
The average CONSECANA price for the current crop (MY 2013/14) for the April-July 2013 period is R$0.4429 kg of TRS, or approximately R$55.81 ton of sugarcane. CONSECANA reports that the average sugarcane price for the state of Sao Paulo for the 2012/13 crop is R$0.4728 per kg of TRS, or R$64.10 per ton of sugarcane. The Ethanol Indexes released by the University of Sao Paulo’s College of Agriculture "Luiz de Queiroz" (ESALQ) follow. The Indexes track anhydrous and hydrous ethanol for fuel prices received by producers in the domestic spot market.
Brazil is an important user of ethanol for fuel consumption. Total domestic demand for ethanol for calendar year 2014 is projected at 26.1 billion liters, a 10 percent increase relatively to 2013 (23.8 billion liters), based on likely higher supply, attractive ethanol prices at the pump and the continued steady sales of flex-fuel vehicles in the market. Total ethanol consumption for use as fuel is estimated at 23.7 billion liters for 2014. Ethanol consumption for other uses is projected at 2.4 billion liters, up 150,000 liters compared to 2013 (2.25 billion liters) due to steady demand from the chemical industry.
The size of the Brazilian light vehicle fleet was estimated at over 30 million units in 2012 and pure hydrous ethanol and flex fuel powered vehicles represent together approximately over 55 percent of the total fleet. Industry projections report that the share of flex fuel vehicles is likely to reach over 80 percent by 2020.
Sales of FFV currently represent over 95 percent of total monthly vehicle sales.
The steady sales of flex-fuel vehicles do not solely guarantee a higher demand for ethanol given that consumers’ decisions are driven by the ratio between ethanol and gasoline prices. The 70 percent ratio between ethanol and gasoline prices is the rule of thumb in determining whether flex car owners will choose to fill up with ethanol (price ratio below 70 percent) or gasoline (price ratio above 70 percent). Note that the crushing period in the center-south started in April/May, but gasoline prices still remained competitive in June 2013 in several Brazilian states.
Fuel consumption in Brazil, as reported by the Petroleum, Natural Gas and Biofuels National Agency (ANP), follows. The figures take into account the product sales by distributors and do not include illegal sales, which were common in the past for hydrous ethanol due to tax differentiation between both types of ethanol. As a result of measures taken by ANP to avoid tax evasion, figures as of 2008 better reflect total hydrous ethanol consumption.
Brazilian total ethanol exports for 2014 are forecast at 3.65 billion liters, slightly up from 2013 (3.4 billion liters). Total 2014 fuel ethanol exports are projected at 3 billion liters.
Brazilian total ethanol imports for 2014 are projected 250 million liters, almost exclusively for fuel use.
3.5. Ending Stocks
Beginning stocks for the bioethanol for “All Uses” is based on information from MAPA and reflect all stocks at ethanol plants on January 1, 2006. Beginning stocks for the bioethanol “For Fuel Only” is estimated based on historical average use of bioethanol for fuel/other uses.
On average, ethanol for fuel has represented 87 percent of total ethanol disappearance (consumption and exports), therefore Post assumed this percentage to calculate the theoretical beginning stocks for fuel in January 1, 2006. All other stock figures were calculated based on the difference between total supply and disappearance.
ATO/Sao Paulo projects ending stocks for fuel ethanol at 5.75 billion liters for 2014, down 524 million liters from 2013 (6.28 billion liters). Ending stocks measured on December 31 of each year do not actually reflect the supply and demand balance. In general, ethanol plants in the center-south are nearing the end of the crushing, whereas ethanol plants in the northeast are fully operating. As a consequence, stock levels are expected to be high.
Stock figures measured on April 1, after subtracting the disappearance (consumption and exports) during the first quarter of the year, will likely show a more realistic picture about product availability in the beginning of the new crop season (April).
In August 2013, Logum Logistica inaugurated the first 207 kilometers of a pipeline which will move ethanol from Ribeirao Preto up to Paulinia, both located in the state of Sao Paulo in the major Brazilian sugarcane growing area. The operation will be held by Transpetro, a subsidiary from Petrobras. This is part of a major investment made by Logum which will connect the sugarcane/ethanol producing areas in the states of Goias, Mato Grosso do Sul and Minas Gerais to the ports of Sao Sebastiao in Sao Paulo and Rio de Janeiro in the state of Rio de Janeiro
3.7. Market for Ethanol Used as Other Industrial Chemicals
No Brazilian authority or trade source maintains production figures on use “for fuel” or “other uses”. All bioethanol production figures are solely reported as hydrous and anhydrous volumes. According to post contacts, ethanol plants produce hydrous and/or anhydrous ethanol and make no distinction between fuel/other uses. The use for fuels/other uses (industrial, refined or neutral) are determined at the consumer level.
Ethanol for “other uses” is used by companies for chemicals, cosmetics, etc. It is common that “ethanol refineries” purchase hydrous/anhydrous ethanol to reprocess and resell to smaller businesses. During the reprocessing, these plants change the original specifications of the product to meet the requested demand.
Biodiesel is a trans-esterified vegetable oil also known as fatty acid methyl ester produced from soy oil, cottonseed oil, rapeseed, oil, other vegetable oils, animal fats, and recycled cooking oils.
Biodiesel can be produced from several raw materials such as soybeans, cottonseed, animal fat, castor seed (Ricinus communis), African palm oil (“dendê”), “pinhao manso” (Jatropha curcas), sunflower, peanut, fried oil or others.
According to updated information reported by the Petroleum, Natural Gas and Biofuels National Agency (ANP), despite the variety of feedstock which can potentially be used to produce biodiesel, soybeans still represents 73 percent of total biodiesel feedstock, followed by animal tallow (20 percent) and cottonseed (3 percent).
B. Production Estimates
Biodiesel production remains regulated by the government. In 2014, total Brazil biodiesel production is forecast at 2.946 billion liters, a 2 percent increase compared to the revised forecast for 2013 (2.877 billion liters), assuming that the mandatory biodiesel mixture remains unchanged at 5 percent.
Biodiesel production in 2012 was 2.72 billion liters, as reported by ANP. Cumulative January-May 2013 production is approximately 1.16 liters.
ANP reports that as of June 2013, Brazil has 69 plants authorized to produce biodiesel. Current authorized industrial capacity is estimated at 22.24 million liters/day or approximately 8 billion liters/year, based on a 360 day operation cycle. This represents approximately 2.8 times the mandatory biodiesel production to be blended in mineral diesel (B5) in 2013; and a 14 percent increase compared to the authorized industrial capacity for the same period in 2012 (19.53 million liters/day).
ATO/Sao Paulo projects industrial capacity for 2013 and 2014 at 69 and 70 plants, respectively, or 8.2 billion liters per year. Projections are based on information for authorized plants and requests for authorization provided by ANP and industry sources.
C. Cost of Production and Market Prices
The biodiesel market remains regulated by the government through a public auction system which gives preference to producers with the Social Fuel Stamp. The Social Fuel Stamp provides incentives for poorer farmers (family farmers) in disadvantaged areas.
Biodiesel prices received by producers are determined by the public auction system. Producers are not allowed to change the sales price set at the auctions and consequently must search for low cost raw material or hedge their activities to offset risk.
The average crude price in the state of Sao Paulo is R$2,418. 83/ton for January-June 2013, a 4 percent drop compared to the same period in 2012 (R$2,513.75/ton).
Biodiesel domestic consumption remains regulated by GoB, thus the sector must comply with the biodiesel mandate which requires all mineral diesel to have a five percent biodiesel blend (B5) as of 2010. Based on industry projections for mineral diesel domestic demand, ATO/Sao Paulo forecasts total biodiesel domestic consumption for 2013 and 2014 at 2.851 and 2.936 billion liters, respectively.
Biodiesel consumption for 2012 is estimated at 2.795 billion liters based on mineral diesel consumption of 55.9 billion liters and the mandatory mixture of five percent (B5) during 2012.
Export figures by country of destination for biodiesel (NCM 3826.00.00) for the years 2012 and 2013 (July-June), according to SECEX, are shown below. No import has been registered under tariff code NCM 3826.00.00.
ATO/Sao Paulo forecasts biodiesel ending stocks for 2014 at 90 million liters, similar to 2013 (80 million liters), based on the difference between total supply and disappearance (consumption and exports).
5. Advanced Biofuels
Brazil has no commercial use of advanced biofuels. In June 2013, the National Bank for Social and Economic Development (BNDES) announced a R$ 1 billion (approximately US$ 400 million) credit line named “Paiss Agricola” to fund agricultural research and development for the sugar-ethanol sector, mostly for investments in advanced biofuels.
Updated information from the industry reports the following second generation projects in Brazil from 2013 through 2015:
A. Three commercial plants in operation:
• In 2014 – one plant in the states of Alagoas with projected annual production of 82 million liters);
• In 2015 – one plant in the state of Sao Paulo with projected annual production of 40 million liters);
• In 2015 – one plant in the state of Goias with projected annual production of 40 million liters);
B. Two demonstration plants:
• In 2014: one plant in the state of Sao Paulo with projected production of 3 million liters
• In 2015: one plant in the state of Mato Grosso do Sul with projected production of 3 million liters
C. Three pilot plants:
• In 2013: three plants in the state of Sao Paulo with experimental batch volumes.
6. Notes on Statistical Data
Beginning stocks for the bioethanol for “All Uses” is based on information from the Ministry of Agriculture, Livestock and Supply (MAPA) and reflect all stocks at the ethanol plants as of January 1, 2006. Beginning Stocks for the bioethanol “For Fuel Only” is estimated based on historical average use of bioethanol for fuel/other uses. On average, ethanol for fuel has represented 87 percent of the total ethanol disappearance (use), therefore Post assumed this percentage to calculate the theoretical beginning stocks for fuel in January 1, 2006. All other stock figures were calculated based on the difference between total supply and disappearance (consumption and exports).
Bioethanol production estimates for “All Uses” were provided by MAPA and are consistent with previous ATO/Sao Paulo GAIN reports submitted by marketing year. Production estimates “For Fuel Only” are taken as the difference between “production for All Uses” minus estimates for “disappearance for other uses” (domestic consumption and exports) given that all Brazilian official publications and industry sources report production in hydrous/anhydrous ethanol only.
Trade figures were based on the Brazilian Secretariat of Foreign Trade (SECEX). SECEX breaks down trade numbers in four categories as described below:
• NCM 2207.10.10 – undenatured ethylic alcohol with ethanol content equal or over 80 percent. With water content equal or below 1 percent vol. Undenatured alcohol is defined as pure ethanol with no additives and suitable for consumption.
• NCM 2207.10.90 - undenatured ethylic alcohol with ethanol content equal or over 80 percent. Others. Undenatured alcohol is defined as pure ethanol with no additives and suitable for consumption.
• NCM 2207.20.11 - denatured ethylic alcohol with any ethanol content. With water content equal or below 1 percent vol. Denatured alcohol is defined as ethanol with additives which make it poisonous and/or unpalatable, thus, no suitable for human consumption. Denatured alcohol is used as a solvent and as fuel for spirit burners and camping stoves. Different additives like methanol are used to make it difficult to use distillation or other simple processes to reverse the denaturation.
• NCM 2207.20.19 - denatured ethylic alcohol with any ethanol content. Others. Denatured alcohol is defined as ethanol with additives which make it poisonous and/or unpalatable, thus, no suitable for human consumption. Denatured alcohol is used as a solvent and as fuel for spirit burners and camping stoves. Different additives like methanol are used to make it difficult to use distillation or other simple processes to reverse the denaturation.
There are no figures for ethanol exports for fuel and/or other uses. Post estimated ethanol “for fuel” based on the type of ethanol that is usually imported by the final destination, as reported by UNICA. Thus, the United States, the Caribbean countries and Sweden usually import ethanol for fuel; whereas Japan, Korea and several other importing countries, including the European Union import ethanol for industrial and other uses.
Domestic consumption figures were taken from information provided by Datagro, the Petroleum, Natural Gas and Biofuels National Agency (ANP) and UNICA.
The number of biorefineries were taken from MAPA and UNICA. Ethanol production capacity was based on production figures as reported by UNICA. Post took the highest ethanol production figure in a given 15-day period, as reported by the institution, and extrapolated to the entire Center-South crushing season. A similar procedure was performed for Northeast production based on MAPA reports.
Sugarcane crushed for ethanol production was calculated based on the actual production breakdown for sugar/ethanol as described in previous GAIN reports. Note that on average, one metric ton of sugarcane produces 80.5 liters of ethanol.
Production numbers are based on figures reported by ANP and forecasts are based on projections for diesel consumption and the results from the public auctions. Biodiesel market continues to be regulated by the government through a public auction system which sets the volume of biodiesel that should be produced and delivered to fuel distributors in a particular period.
Consumption figures are based on mineral diesel consumption and the mandatory mixture of biodiesel (B2, B3, B4, B5) in mineral diesel set by Brazilian legislation.
Trade figures were based on the Brazilian Secretariat of Foreign Trade (SECEX), as reported below:
• From 2006 through 2011 - NCM 3824.90.29 – Other industrial fatty acid derivatives, mixtures and preparations containing fatty alcohols or carboxylic acids or their derivatives.
• As of 2012 – NCM 3826.00.00 – biodiesel and their blends.
The number of biorefineries and production capacity are based on ANP reports. Feedstock use for biodiesel consumption is based on the following conversion rates:
• 0.875 metric ton of biodiesel = 1,000 liters of biodiesel
• 1 metric ton of biodiesel = 1.03 metric ton of soybean oil
• 1 metric ton of biodiesel = 1.00 metric ton of cottonseed oil
• Extraction rate for soybean oil = 0.1919
• Extraction rate for cottonseed oil = 0.1649
• 1 kg of animal fat = 1.064 liters of biodiesel