UNCTAD sees Brazil producing 10 billion liters of second-generation ethanol by 2025

A new report by the United Nations Conference on Trade & Development assesses Brazilian global potential in this sector (image: detail of UNCTAD report cover)

To meet the targets presented at the United Nations Climate Change Conference (COP21) in December 2015 in Paris, Brazil must achieve a 37% reduction in greenhouse gas (GHG) emissions by 2025.

To do so, it should invest in increasing the share of biofuel from sugarcane in its energy mix, prioritizing second-generation ethanol, says a report just out from the United Nations Conference on Trade & Development (UNCTAD).

According to the report, entitled Second Generation Biofuel Markets: State of Play, Trade and Developing Country Perspectives, Brazil has the potential to produce 10 billion liters of second-generation ethanol by 2025. The report, UNCTAD’s second on the subject, presents a global overview of challenges and opportunities based on a compilation of assessments by experts from many countries around the world.

The main focus is an analysis of how the market opportunities arising from growing production of second-generation (2G) biofuels and technology transfer can be leveraged by developing countries to fulfill the commitments announced at COP21.

“By mapping cellulosic ethanol initiatives and recent policy lessons worldwide, UNCTAD’s report offers public administrators and private enterprise a macro-picture of advanced biofuels produced from biomass, also known as 2G biofuels, which have become a commercial reality, an alternative source of energy that doesn’t compete with food,” said Laís Forti Thomaz, who participated in the production of the report and is a researcher at the National Institute of Science & Technology for Studies of the United States (INCT-INEU) in Brazil, supported by the National Council for Scientific & Technological Development (CNPq) and FAPESP.

UNCTAD’s first report, issued in 2007, highlighted the biofuel sector’s outstanding potential but showed how far it still was from the markets. With the country commitments announced at last year’s UN summit, and with commercial-scale production of 2G biofuels finally taking off, the challenge now is to make the most of market opportunities.

The report therefore presents suggestions for responsible development of the 2G biofuel industry, such as creating regulatory frameworks for advanced bioenergy tailored to national circumstances and existing local demand, promoting cooperation between domestic organizations and foreign companies for joint ventures to facilitate technology transfer, and pursuing ways and means to avoid blocking industrial development in specific sectors or technologies, such as biomaterials.

It also advocates flexibility for market players that operate biorefineries so that they can target multiple markets, including materials, feed, food and energy, both domestically and internationally.

“These suggestions are important. For example, we need to avoid the emergence of a wide technological gap between first-generation land-intensive feedstocks and second-generation capital-intensive biofuels in developed and developing countries. It’s also crucial to promote a technical dialogue among the different regions that produce 2G biofuels to assure compatible standards for feedstocks and promote trade in advanced biofuels,” Thomaz said.

Liter by liter

The world leader in production of cellulosic ethanol is the US, with an installed capacity of 490.37 million liters per year, or 34% of the total, followed by China with 340.19 million liters (24%), Canada with 303.45 million liters (21%), Brazil with 177.34 million liters (12%), and the European Union with 130.83 million liters (9%).

According to UNCTAD, to reach the 10 billion liter mark by 2025, Brazil will need to crush more sugarcane while modernizing and integrating mills that produce 1G and 2G ethanol, in addition to building new plants dedicated to producing 2G ethanol.

The modernization of 81 mills, representing a combined milling capacity of 275 million tons of cane per year, would enable Brazil to produce 5 billion liters by 2025. The remaining 5 billion liters should come from 100 million tons per year of extra milling capacity by 80% of the industry, adding 1.5 billion liters, and production of a further 3.5 billion liters by new mills.

The complete UNCTAD report, Second Generation Biofuel Markets: State of Play, Trade and Developing Country Perspectives, can be downloaded from unctad.org/en/PublicationsLibrary/ditcted2015d8_en.pdf. In addition to Thomaz, representatives of other Brazilian institutions such as the University of São Paulo (USP), the Brazilian Sugarcane Industry Association (UNICA) and the Brazilian Association for Industrial Biotechnology (ABBI) also contributed to the report.