Brazil's corn ethanol output projected to nearly double by 2032 on industry expansion

Brazil's corn ethanol production is poised to nearly double to 16 billion liters by 2032, driven by rapid industry expansion and infrastructure development, according to a report from Citi Investment Bank.

Citi projects that Brazil will produce 6.3 billion liters of corn ethanol in 2023-24, with output rising to 9.5 billion liters in the current crop season. The National Corn Ethanol Union expects production this season to exceed forecasts by 200 million liters, pushing total output to approximately 8.2 billion liters.

Infrastructure boom and industry growth

Brazil currently has 22 operational corn ethanol plants and 12 additional plants are under construction, while nine more have received regulatory approval, according to Citi. The majority of these plants are concentrated in Brazil's Center-West region, with Mato Grosso leading production, followed by Goias and Mato Grosso do Sul.

Brazil's corn ethanol industry has seen remarkable growth since the country's first dedicated corn ethanol plant opened in Lucas do Rio Verde, Mato Grosso, in 2017. The production volumes have surged from 40 million liters in 2013/14 to over 6 billion liters today.

Mato Grosso dominates production with 69% of national corn ethanol output. Mato Grosso do Sul follows with 19%, while Goias contributes with 11%. By 2025-26, corn ethanol will represent nearly a third of Brazil's total ethanol production.

Strategic advantages over sugarcane ethanol

Corn ethanol holds key advantages over sugarcane-based ethanol. Its longer storage life and lower transportation costs enable production in remote areas, providing a more stable ethanol supply, especially during the sugarcane off-season.

"Corn ethanol helps balance Brazil's ethanol market by ensuring year-round availability," Citi noted. The rise in corn ethanol production is also linked to Brazil's increasing "safrinha" (second-crop) corn output, which has doubled over the past decade.

Brazil's biofuel landscape undergoing transformation

Corn ethanol is expected to account for nearly a third of Brazil's total ethanol production by 2025-26, strengthening Brazil's position as the world's second-largest ethanol producer. The expansion is expected to create economic benefits for Brazil's agricultural regions without requiring additional farmland, as it relies on second-crop corn production.

Brazil's growing corn ethanol capacity reflects the country's broader push toward renewable energy and its ambition to become a global leader in sustainable biofuels.

However, overall ethanol stockpiles in Brazil stood at 5.92 billion liters as of Feb. 15, down 14% from 6.87 billion liters two weeks earlier and 12% lower on the year, according to Brazil's agriculture ministry data released on Feb. 26.

Stocks of anhydrous ethanol, used for blending with gasoline, totaled 2.56 billion liters, 11% below the same time in 2024, while hydrous ethanol, sold as E100 at gas stations, accounted for 3.35 billion liters, 13% lower year on year.

The decline in stockpiles was primarily due to continued consumption of E100 at the pump and the completion of milling activities in Center-South Brazil, which includes key biofuel-producing states like Sao Paulo, Minas Gerais and Goias -- as the 2024-25 harvest season approaches its end.

Only 18 production units in the Center-South were actively processing feedstock during the first half of February, according to industry association UNICA. These included three units processing sugarcane, 10 companies producing ethanol from corn, and five flex plants. In the same period during the 2023-24 harvest, 16 production units were operational.