New corn ethanol projects will require around R$20 billion in investments, says Itaú BBA

By Itau Unibanco

November 14, 2024

This is a machine translation of the press release originally published in Portuguese.

The corn ethanol market in Brazil is expanding rapidly. From 2019 to the 23/24 harvest, its share of total production grew from 2% to 19%, with estimates of exceeding 22% in the next two years, if half of the projects evaluated by the Itaú BBA study come to fruition.

The report analyzes 22 new plants, including new projects and expansions, which, if fully implemented, will require more than 14 million additional tons of corn, requiring approximately R$20 billion in investments and an additional R$9 billion in working capital. This additional demand for the grain could put pressure on supply in some states, especially in the Matopiba region.

“Corn ethanol projects represent a significant opportunity for Brazil to consolidate itself as a leader in biofuel production, strengthen our energy matrix in a sustainable way and give more impetus to the economy,” says Guilherme Novaes, agribusiness credit manager at Itaú BBA.

In the case of ethanol, the entry of new plants would add more than 6 billion liters to the market, which, according to Itaú BBA's Agro Consultancy, should only absorb this additional volume in 2028. Itaú BBA analyst Lucas Brunetti also points out room for increased use of hydrated ethanol in the Otto Cycle (gasoline and ethanol), especially in the North and Northeast states, as well as the promotion of corn production in these regions, as happened in the off-season corn area in Mato Grosso.