Corn-based ethanol opportunities in South America continue to grow

Companies seek to capitalize on growth in region.

Encouraging news continues to flow from South America, especially as Brazil outlines its national biofuel policy, known as RenovaBio. RenovaBio aims to reduce greenhouse gas (GHG) emissions by 43%, driven by the commitment made at the 2015 Paris Climate Conference. The policy is an important step for the local biofuel industry as GHG emission reduction certificates will place a higher value on fuels with a lower carbon intensity than petroleum.

The objectives of RenovaBio include increasing renewable energy use, adding economic value to emission reductions, driving technological innovation and providing predictability for investments as well as an overall drive for greater sustainability. Current industry forecasts estimate domestic ethanol demand to increase 60% in 2018. By 2030, RenovaBio could result in domestic demand for up to 40 billion liters of ethanol.

South America is home to some of the largest ethanol producers in the world, and it has a long tradition of running on biofuels. As renewable energy policies in the region continue to evolve, companies like ICM Inc., an industry leader in the development and optimization of ethanol technologies, intend to provide solutions and services to address the growing demand.

ICM’s capabilities in corn-based ethanol processing include various technologies, engineering solutions, proprietary equipment and customized services. As such, ICM said it is enthusiastic about the opportunities in South America.

In 2017, Brazil produced an estimated 27.7 billion liters (7.32 billion gal.) of ethanol. There is currently a gap of approximately 3 billion liters between ethanol demand versus the production level. This gap, which is currently filled by imports, is expected to grow to 5 billion liters by 2022. Brazil’s recent increase in the taxation of imported ethanol should stimulate growth in local production.

Argentina has several ethanol plants in operation that use corn and sugarcane as feedstocks. The country produced 889 million liters of ethanol in 2016 and 1 billion liters in 2017 -- an increase of around 13% -- while industry analysts forecast record production of 1.12 billion liters in 2018.  Argentina’s economy has shown resilience and positive signs of recovery, including the biofuel industry.

Paraguay is another example of a South American country with a favorable biofuel program that utilizes sugarcane and corn feedstocks. Paraguay is expanding local ethanol production, which is expected to have a vast positive impact on its economic growth.

ICM is already actively engaged in supporting the expanding ethanol markets in Argentina, Brazil and Paraguay. The company’s technologies and equipment solutions are currently used in: ACA Bio Cooperative Ltda. (ACA Bio), a facility with nameplate capacity of 400 cu. m per day (40 million gal. per year) in Villa Maria, Cordoba, Argentina; FS Bioenergia, Brazil’s first stand-alone corn ethanol plant, which has nameplate capacity of 530 cu. m per day (50 million gal. per year) in Lucas do Rio Verde, Mato Grosso, Brazil, plus several other bolt-on integrated technologies in Paraguay.

“ICM’s experience in South America, backed by years of knowledge in the industry, provides the ability to enhance existing facilities,” the company said. “Traditional sugarcane ethanol plants can integrate corn feedstock into their business model. The addition of corn ethanol processing can significantly increase profitability.”

ICM’s grain-based ethanol biorefineries also produce several other differentiated products, including a high-protein dried distillers grains that for use in poultry, aquaculture and swine rations.

“We see this technology bringing a sustainable benefit to the entire ethanol industry by maximizing the value of each hectare of corn,” said Steve Hartig, vice president of technology development at ICM.

Adding new plants or improving efficiencies in existing facilities promotes economic growth in the region while advancing renewable energy and diminishing dependence on hydrocarbons, diversifying the energy matrix and reducing the impact on the environment.

“South America has some of the highest corn-producing regions in the world. The advantages that corn-based ethanol brings to the region can be beneficial socially and economically,” ICM said, adding that its regional office in Sao Paulo, Brazil, is strategically located to support its growing customer base in South America.

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