Highlights

The Brazilian ethanol-use mandate remains unchanged at 27 percent (E27). The Ministry of Development, Industry and Commerce (MDIC)/Chamber of Foreign Trade (CAMEX) extended the zero import tariff for ethanol through December 31, 2021.In March 2016, President Dilma Rousseff sanctioned law №13,263/2016, which increased the biodiesel-use mandate from seven percent (B7) to ten percent (B10) in 2019, as follows: eight percent (B8) in March 2017; nine percent (B9) in March 2018 and ten percent (B10) in March 2019. Total ethanol production for 2016 is estimated at 30.372 billion liters/ Total ethanol exports for 2017 are forecast at 1.4 million liters, similar to 2016 (1.4 million). Fuel ethanol exports for 2016 are estimated at 750 million liters, mostly to the United States market. Biodiesel production remains regulated by the government. In 2016, total Brazilian biodiesel production is projected at 3.87 billion liters, down three percent compared to the revised estimate for 2015 (4.01 billion liters). The projections take into account the current recession of the Brazilian economy and the consequent decrease of diesel consumption, Natural Gas and Biofuels National Agency (ANP).

Executive Summary

Regional Producer Subsidy

The “Regional Producer Subsidy" is the only direct subsidy paid by the government of Brazil (GOB). The program was created decades ago to provide sugarcane producers from the north-northeastern states support to balance their cost of production with that of the most developed growing areas in center-south Brazil. Throughout the years the GOB has tailored this subvention program to the evolving reality of the sugarcane industry. No subsidy has been paid to producers as of July 2015 due to the current economic recession in Brazil.

Ethanol Use Mandate

The ethanol-use mandate has been mandatory since 1977 when the legislation required a 4.5 percent blend of ethanol to gasoline.The ethanol blend can vary from 18 to 27.5 percent and it is currently set at 27 percent (E27).

Tax Incentives for Ethanol-flex Fuel Vehicles

Tax incentives have played an important role in supporting ethanol consumption since the introduction of flex-fuel cars. The National Association of Motor Vehicle Manufacturers (ANFAVEA). reports that regardless of the engine power, the tax burden as a share of the suggested retail price is usually lower for flex-fuel than gasoline only powered vehicles.

Tax Incentives for Ethanol Fuel

The GOB has a complex tax system including several taxes at the federal, state, and municipal level. Depending on the economic and financial strategies pursued by policymakers, GOB can provide incentives for gasoline and/or ethanol at the pump. Currently, GOB provides preferential treatment for ethanol compared to gasoline under both its Contribution for Intervention in Economic Domain (CIDE) and Contribution to the Social Integration Program/Contribution for Financing Social Security (PIS/COFINS) programs. In addition, governments from several Brazilian states provide differential treatment for ethanol by using different state taxes for circulation of goods and services (ICMS) percentages for ethanol and gasoline.

Credit Lines

The National Bank for Social and Economic Development (BNDES) provides specific credit lines for the sugar, ethanol, and bioenergy industries to fund investments on sugarcane production, expansion of industrial capacity for sugar and ethanol, cogeneration, logistics, and multimodal transportation. Total financing for the industry in 2015 was R$ 2.74 billion, down 60 percent from 2014 (R$ 6.8 billion) due to financial constraints faced by the Brazilian government.

In May 2016, the Ministry of Agriculture, Livestock and Supply announced the Brazilian Agricultural Crop and Livestock Plan for 2016/17. A total of R$ 185 billion will be released to fund agricultural and livestock programs including Prorenova for sugar and PASS for ethanol. This represents a 1 percent reduction over the previous crop plan.

Prorenova is a credit line to finance the renewal and/or expansion of sugarcane fields. A total of R$ 1.5 billion should be available to finance the program. The annual interest rate is comprised at 75 percent of the “long term interest rate" (TJLP) plus 25 percent of the Brazilian Central Bank (BACEN) basic interest rate (SELIC). The payment is due within 96 months and there is an 18-month grace period. The amount of credit per beneficiary has not yet been decided, and the GOB has not yet given an indication when it will be determined.

The ethanol stock program also known as BNDES PASS program should release a total credit of R$ 2 billion. The interest rate has not been set yet. The payment is due within 270 days.

Ethanol Import Tariff

The import tariff for ethanol is 20 percent, however, since April 2010, the product has been included in Brazil's “list of exceptions" and the import tariff has been cut to zero.

Government Support Programs for Biodiesel

Biodiesel Use Mandate

The National Biodiesel Production Program (PNPB) was created in 2004 to promote domestic biodiesel production, to reduce petroleum import dependency, and to lower pollutant emissions and health related costs. In addition, PNPB was established to generate jobs and income and alleviate regional economic disparities by passing on benefits to family farmers, especially those in North and Northeast Brazil.

Biodiesel Import Tariff

According to the Secretariat of Foreign Trade, the import tariff applied to biodiesel is fixed at 14 percent.

Tax Incentives

The GOB sets federal tax exemptions and incentives, size of producer and region of production, in order to encourage the production of biodiesel and to promote social inclusion.

Gasoline and Diesel Use

Fuel consumption in Brazil, as reported by the Petroleum, Natural Gas and Biofuels National Agency (ANP). Gasoline consumption for January-June 2016 is 20.89 billion liters, similar to the same period in 2015 (20.44 billion liters). Hydrated ethanol prices have become not competitive with gasoline, resulting in additional gasoline consumption. Diesel consumption during January-June 2016 is 26.66 billion liters, down five percent compared to the same period in 2015 as a consequence of the current economic recession Brazil is experiencing.

Sales by fuel distributors as informed by ANP for 2015 and January-June 2016 are used as the baseline for ATO/Sao Paulo projections, which also assumed a –3.3 percent growth for the Brazilian Gross Domestic Production (GDP) for 2016 and a modest 1 percent growth for the 2017 GDP, as projected by the Brazilian Central Bank (BACEN) and the majority of the financial institutions. No diesel breakdown is available before 2014.

Projections as of 2018 were based on the “Ten-Year Plan for Energy Expansion – 2024" conducted by the Minister of Mines and Energy, Energy Research Enterprise (MME/EPE) and released in January 2016. Diesel use projections take into account the economic scenario, all means of transportation using diesel and more specifically the size of the fleets, specific consumption, average mileage/year, occupancy factor, number of passengers/mileage, tonnage/mileage, etc. Note that diesel use is strongly correlated with GDP growth.

Gasoline use projections take into account the economic scenario, number of automobile licensed for use, domestic ethanol supply, gasoline price in the domestic market; consumers choice between gasoline and ethanol; evolution of the vehicle efficiency; the ethanol blend to gasoline, among others.

Ethanol

Brazilian Ethanol Production, Supply and Demand (PS&D) Tables

Ethanol is an alcohol made by fermenting sugar components of plant materials such as corn and wheat starch, sugarcane, sugar beet, sorghum, and cassava. Sugarcane is virtually the sole source of feedstock for ethanol production in Brazil.

The official Brazil marketing year for sugarcane, sugar and ethanol production as determined by the Brazilian government is April-March 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.

No Brazilian government entity or trade source maintains production figures on use “for fuel" or “other uses." All ethanol production figures are reported solely as hydrous and anhydrous volumes. Ethanol plants produce different specifications of hydrous and anhydrous, but make no distinction between fuel and other uses. The actual use for fuels and other uses (industrial, refined, or neutral) are determined at end-use.

Ethanol Used as Fuel, Other Industrial Chemicals (Million Liters)

Calendar Year

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Beginning Stocks

4,829

5,783

4,048

5,916

6,891

7,094

8,195

9,367

7,452

9,551

Fuel Begin Stocks

4,468

5,422

3,683

5,549

6,488

6,690

7,790

8,913

6,985

9,064

Production

27,140

26,105

27,965

22,893

23,509

27,642

28,553

30,385

30,372

30,148

Fuel Production

23,58

2

22,20

1

24,51

6

20,21

2

20,73

9

24,37

7

25,58

5

27,55

2

28,02

2

27,77

8

>of which is cellulosic

0

0

0

0

0

0

0

2

6

8

Imports

0

4

76

1,136

554

132

452

513

550

550

Fuel Imports

0

0

74

1,100

553

131

403

500

530

530

Exports

5,124

3,296

1,906

1,964

3,055

2,917

1,398

1,867

1,400

1,400

Fuel Exports

3,044

1,118

562

1,083

2,500

1,952

780

1,184

750

750

Consumption

21,06

2

24,54

8

24,26

7

21,09

0

20,80

5

23,75

6

26,43

5

30,94

6

27,42

3

27,70

0

Fuel Consumption

19,58

4

22,82

3

22,16

2

19,29

0

18,59

0

21,45

6

24,08

5

28,79

6

25,72

3

25,98

0

Ending Stocks

5,783

4,048

5,916

6,891

7,094

8,195

9,367

7,452

9,551

11,149

Fuel Ending Stocks

5,422

3,683

5,549

6,488

6,690

7,790

8,913

6,985

9,064

10,642

Total Balance Check

0

0

0

0

0

0

0

0

0

0

Fuel Balance Check

0

0

0

0

0

0

0

0

0

0

Production Capacity, First Generation Ethanol

Number of

Refineries

407

426

430

418

408

399

383

382

383

383

Nameplate

Capacity

38,300

35,600

41,360

42,800

41,600

40,700

37,960

38,000

39,650

39,650

Capacity Use (%)

71

73

68

53

57

68

75

80

77

76

Production Capacity, Cellulosic Ethanol

Number of

Refineries

0

0

0

0

0

0

1

3

3

3

Nameplate

Capacity

0

0

0

0

0

0

82

127

127

127

Capacity Use (%)

0

0

0

0

0

0

0

2

5

6

Co-product Production for All Ethanol (1,000 MT)

Bagasse

113,0

85

108,7

71

116,5

19

95,38

8

97,95

4

115,1

75

118,9

71

126,0

08

125,9

42

125,0

00

Feedstock Use (1,000 MT)

Sugarcane

339,2

326,3

349,5

286,1

293,8

345,5

356,9

378,0

377,8

375,0

Bagasse from Sugarcane for Cellulosic Ethanol

0

0

0

0

0

0

0

0.011

0.033

0.044

Corn

0

0

0

0

0

0

0

343,9

341,4

341,4

Market Penetration (Million Liters)

Fuel Ethanol

19,58

4

22,82

3

22,16

2

19,29

0

18,59

0

21,45

6

24,08

5

28,79

6

25,72

3

25,98

0

Hydrous

13,29

0

16,47

1

15,07

4

10,89

9

10,65

0

11,75

5

12,99

4

17,86

2

14,44

3

14,58

7

Anhydrous

6,294

6,352

7,088

8,391

7,940

9,701

11,091

10,934

11,280

11,393

Gasoline (incl.

ethanol)

25,175

25,409

29,844

35,491

39,698

41,426

44,364

41,137

41,777

42,195

Blend Rate Anhydrous

25.0%

25.0%

23.7%

23.6%

20.0%

23.4%

25.0%

26.6%

27.0%

27.0%

Blend Rate Overall

77.8%

89.8%

74.3%

54.4%

46.8%

51.8%

54.3%

70.0%

61.6%

61.6%

Production

Production Estimates

ATO/Sao Paulo 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. ATO/Sao Paulo estimates the MY (April-March) 2016/17 Brazilian sugarcane crushing ranges between 670 and 680 million MT, up one percent compared to MY 2015/16 (667 million MT). The center-south region is expected to harvest 620-625 million MT of sugarcane, similar to previous season (618 million MT), due to a marginal increase in yields. Post projects north-northeast production for MY 2016/17 at 50-55 million MT, a one to six million MT increase compared to MY 2015/16, due to better weather conditions.

Total ethanol production for 2016 is estimated at 30.372 billion liters. Total ethanol for fuels production is estimated at 28.022 billion liters, up two percent from the previous calendar year.

Sugar-ethanol mills are expected to divert less sugarcane to ethanol production in the current crop approximately 55 percent of the sugarcane volume as opposed to 59 percent in 2015/16, due to favorable sugar prices in the international and domestic markets favored by the world deficit in sugar supply.

It is early to predict MY 2017/18 production. More accurate numbers should be available in the first quarter of 2017 with the development of feedstock from new sugarcane plantings and recovery from current harvested areas; in other words, 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.

Current production forecast is based on the assumption that regular weather conditions will prevail throughout the sugarcane production cycle in all producing regions, lower than average pace of sugarcane field renewals and that the world deficit in sugar supply will remain in 2017.

Post projects sugarcane production for MY 2017/18 stable at 680 million MT. ATO/Sao Paulo projects 2017 total ethanol production at 30.148 billion liters, down 1 percent from 2016. Ethanol for fuel production is forecast at 27.778 billion liters for 2017, a 1 percent drop over 2016.

Total cellulosic ethanol production for 2016 is forecast at 6 million liters from sugarcane bagasse, which represents an insignificant fraction of total ethanol production in Brazil. Total ethanol production from corn for 2016 is projected at 140 million liters, or 0.4 percent of total ethanol projected production. Post contacts expect production should come from a few plants in the states of Goias and Mato Grosso.

Industrial Capacity

Hydrated ethanol production capacity for 2016 is estimated at 39.65 billion liters, up 1.65 billion liters from 2015. This figure reflects the authorized hydrated ethanol production capacity of 214,470 m3/day as reported by ANP and an average of 185 crushing days.

Ethanol installed industrial capacity depends on annual 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 switch between 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.

New Investments/Shut Down of Ethanol Plants

The total number of sugar-ethanol mills in 2016 is estimated at 383 units, according to updated information from ANP.

Sugarcane and Ethanol Cost of Production and Prices Received by Producers

Sugarcane represents between 60 to 70 percent of the cost of producing ethanol. 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 São Paulo, the major producing state comprising roughly 60 percent of the center-south production.

Cumulative CONSECANA price (March-June 2016) for the state of Sao Paulo for the 2016/17 crop was R$0.5926 per kg of TRS or approximately R$73.24 per ton of sugarcane. Note that CONSECANA's prices are based on both sugar and ethanol prices in domestic and international markets.

Consumption

Total domestic demand for ethanol for calendar year 2017 is forecast at 27.7 billion liters, up 277 million liters relative to the revised figure for 2016 (27.423 billion liters), based on the current recession in the economy and expected negative growth of Brazilian GDP for 2016 and marginal GDP growth for 2017.

Brazil is an important user of ethanol for fuel consumption. Total ethanol consumption for use as fuel is estimated at 25.723 billion liters for 2016, down 3.07 billion liters compared to the previous year due the current recession in the economy and expected negative growth of Brazilian GDP for 2016.

Consumer 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).

As we can see ethanol and gasoline prices as well as the price ratio for selected states, cities, and months. Note that the 2016 harvest season started in April and the price ratio between ethanol and gasoline was favorable for gasoline in the majority of the selected areas even before the beginning of the crushing.

The size of the Brazilian light vehicle fleet also plays a role in encouraging ethanol consumption. The fleet is estimated at 35.3 million units in July 2016 and pure hydrous ethanol and flex fuel powered vehicles together represent approximately 72 percent (25.58 million units) of the total fleet.

Trade

Exports

Brazilian total ethanol exports for 2017 are forecast at 1.4 million liters, similar to 2016 (1.4 million). Fuel ethanol exports for 2016 are estimated at 750 million liters, mostly to the United States. Ethanol exports (NCM 2207.10 through 2207.20.19) for 2015 and 2016 (January-June), as reported by the Brazilian Secretariat of Foreign Trade (SECEX).

Brazilian Ethanol Exports (NCM 2207.10, 2207.20.11 & 2207.20.19, MT, 000 Liters, US$ 1,000 FOB)

CY 2015

CY 2016

Country

Volume

Weight

Value

Volume

Weight

Value

United States

925,801

732,292

451,034

447,893

353,998

231,503

South Korea

464,771

375,450

213,459

384,300

310,436

174,030

Japan

48,914

38,609

26,183

58,225

46,050

29,948

Netherlands

63,560

50,909

27,945

46,825

37,826

20,617

India

91,547

74,046

36,392

44,356

35,868

15,535

China

120,255

95,417

54,212

35,320

28,092

16,115

Nigeria

46,370

37,475

19,908

22,375

18,097

8,871

Turkey

19,317

15,557

9,026

12,859

10,348

6,157

United Kingdom

15,998

12,635

7,940

8,145

6,429

3,946

Angola

4,879

3,819

3,386

5,875

4,707

3,133

Other

65,786

53,200

30,990

17,250

13,999

10,237

Total

1,867,199

1,489,408

880,475

1,083,423

865,849

520,091

Beginning stocks for ethanol for Ethanol Used as Fuel and Other Industrial Chemicals, excluding ethanol for beverages and reflect all stocks at ethanol plants on January 1, 2006. Beginning stocks for ethanol “For Fuel Only" are 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 10.642 billion liters for 2017, up 1.578 billion liters from 2016. 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 season, while ethanol plants in the northeast are fully operating. As a result, 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).

Biodiesel

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.

Brazilian Biodiesel Production, Supply and Demand (PS&D) Table

Calendar Year

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Beginning Stocks

45

90

135

60

132

54

42

52

46

111

Production

1,167

1,608

2,386

2,673

2,717

2,955

3,460

4,010

3,870

4,400

Import

5

4

9

18

0

0

0

0

0

0

Export

1

3

8

6

0

39

40

12

0

20

Consumption

1,125

1,565

2,462

2,613

2,795

2,928

3,410

4,004

3,805

4,301

Ending Stocks

90

135

60

132

54

42

52

46

111

190

Balance Check

0

0

0

0

0

0

0

0

0

0

Production Capacity

Number Of Biorefineries

62

63

66

65

65

64

58

57

51

53

Nameplate Capacity

3,600

4,350

5,837

6,742

7,400

7,900

7,722

7,860

7,191

8,097

Capacity use %

32.4

37.0

40.9

39.6

36.7

37.4

44.8

51.0

53.8

54.3

Feedstock Use for Fuel (1, 000 MT)

Soyoil, crude

720

1,12

1,76

1,93

1,83

1,92

2,29

2,73

2,71

3,08

Animal Fat

198

247

317

352

461

586

702

724

668

759

Market Penetration (Million Liters)

Biodiesel, on road use

n/a

n/a

n/a

n/a

n/a

n/a

n/a

2,45

2,92

2,75

Diesel, on road use

n/a

n/a

n/a

n/a

n/a

n/a

n/a

43,28

41,81

39,41

Blend Rate %

n/a

n/a

n/a

n/a

n/a

n/a

n/a

5.7

7.0

7.0

Diesel, total use

44,764

44,298

49,239

52,264

55,900

58,572

60,032

57,211

54,364

54,908

Production

Feedstock

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. Soybean oil currently represents 78 percent of total biodiesel feedstock, followed by animal tallow (18 percent).

Production Estimates

Biodiesel production remains regulated by the government. Biodiesel production in 2015 was 4.01 billion liters, a 16 percent increase from 2014 supported by the increase of the biodiesel use mandate to 7 percent as of November 2014.

In 2016, total Brazilian biodiesel production is projected at 3.87 billion liters, down 3 percent compared to the revised estimate for 2015 (4.01 billion liters). The projections take into account the current recession of the Brazilian economy and the consequent decrease of diesel consumption. The agency reports a total 26.67 billion liters of diesel consumed between January and June 2016, down 5 percent from the same period in 2015. Biodiesel production for 2017 is forecast at 4.4 billion liters based on modest recovery of the Brazilian economy and the increase of the biodiesel use mandate to 8 percent as of March 2016.

Brazil has 51 plants authorized to produce biodiesel. According to ANP, The authorized industrial capacity for 2016 is estimated at 19.976 million liters/day or approximately 7.2 billion liters/year, based on a 360 day operation cycle. This represents approximately 1.9 times the mandatory biodiesel production to be blended in mineral diesel in 2016; and a four percent decrease compared to the authorized industrial capacity for the same period in 2015 (20.72 million liters/day).

ATO/Sao Paulo projects a total of 53 biodiesel plants for 2017 with an industrial capacity of 8.1 billion liters per year (22.49 million liters/day), up 13 percent from current industrial capacity. Projections are based on information for authorized plants and requests for authorization provided by ANP and industry sources.

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. Government sets the opening/reference price for different Brazilian regions and biodiesel producers bid for the lowest price. 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.

Industry sources report that raw materials represent approximately 80 percent of biodiesel production cost whereas other inputs such as methanol, additives and catalyzers represent 10 percent of the total cost. Given that over 78 percent of biodiesel production still results from the use of soybean oil, the profitability of the sector is highly dependent on oilseed prices.

The average crude price in the state of Sao Paulo is R$ 2,920/ton for January-June 2016, up 30 percent compared to the same period in 2015 (R$2,250/ton).

Consumption

Biodiesel domestic consumption remains regulated by GOB, thus the sector must comply with the biodiesel mandate which requires all mineral diesel to have a seven percent biodiesel blend (B7) as of November 1 2014. Based on industry estimates for mineral diesel domestic demand, ATO/Sao Paulo estimates total biodiesel domestic consumption for both 2015 and 2016 at 4 and 3.8 billion liters, respectively.

Biodiesel consumption for 2017 is forecast at 4.3 billion liters based on modest recovery of the Brazilian economy and the increase of the biodiesel blend to 8 percent (B8) as of March 2017.

Trade

No import has been registered under tariff code NCM 3826.00.00. Brazil virtually does not import biodiesel given that the country has systematically underused total domestic production capacity.

Stocks

ATO/Sao Paulo forecasts biodiesel ending stocks for 2017 at 190 million liters, up 79 million liters from 2016 (111 million liters), based on the difference between total supply and disappearance (consumption and exports).

Advanced Biofuels

Although Brazil started the production of advanced biofuels in 2014, it is not yet economically feasible to produce on a large scale due to the high cost of the technology to produce cellulosic ethanol, and the cost of the enzymes used in the process, among others. There are currently three cellulosic ethanol plants in Brazil: (1) Bioflex 1 in the state of Alagoas from Granbio (82 million liters production capacity); (2) Raizen – Costa Pinto Unit in the state of Sao Paulo (42.2 million liter production capacity); and (3) Centro de Tecnologia Canavieira (CTC) demonstration plant in the state of Sao Paulo (3 million liters production capacity). Raizen – Costa Pinto Unit is the only one producing at relatively large scale. Total production projected for 2016 is 6 million liters of cellulosic ethanol from sugarcane bagasse. Note that total cellulosic ethanol production is still an insignificant fraction of total ethanol production in Brazil.