Sugar cane sweetens ethanol’s appeal

Ethanol took a beating in the U.S., and many parts of the globe, after government-mandated quotas for the bioderived fuel were linked to price spikes in basic foodstuffs. But those who think ethanol, which presents an alternative feedstock stream for chemicals/plastics, priced itself out of a role in our global energy future should visit Brazil. In 2008, ethanol actually represented a slim majority (51-52%) of the country’s fuel market for the first time, according to Jose Carlos Grubisich, president and CEO ETH Bioenergia. Speaking at Chemical Market Assoc. (CMAI; Houston) Global Petrochemical Conference, Grubisich said ethanol was pushed to that first-ever majority of the fuel market with the assistance of flex-fuel cars in Brazil, which can run ethanol or traditional petroleum-derived gasoline.

In 2009, ETH forecasts that 28 billion liters of corn-sugar-derived ethanol will be sold into Brazil’s domestic market—more than double the 12 billion liters of 2006. Grubisich said the market will double again by 2015, growing at an annual rate of 13.3%. As ethanol gains, oil is displaced, with biofuel replacing 1 million barrels/day of traditional oil in 2009, and growth rates nearly doubling that figure to 1.9 million barrels/day by 2015. Globally, ethanol consumption in 2008 was 70 billion liters, and by 2015, Brazil and the global market are expected to double, replacing 6.2 million barrels/day of oil consumption by that time.

Grubisich also discussed “green plastics” derived from sugar-cane ethanol, including polyvinyl chloride (PVC) and polyethylene (PE), which both utilize ethanol-generated ethylene as a building block. From 2009 to 2015, industrial demand of ethanol in Brazil, which includes plastics and chemical production, will expand 18%/yr, from 1.4 billion liters to 1.9 billion liters.

In the U.S., corn-based ethanol, and downstream products like polylactic acid (PLA), have also been dismissed on the basis of their cost relative to oil, especially after crude’s precipitous drop since last summer, but Grubisich said Brazil’s sugar-cane model is highly competitive with oil, and easily outclasses other routes to ethanol, including corn. In an index measuring cost and starting at 100 for Brazil’s sugar-cane ethanol, Thailand follows at 118 (manioc), with corn from the European Union (140) and the U.S. (142) a distant third and fourth.

On a per barrel basis, Brazil’s ethanol cost $45 in 2009, with investments expected to lower that figure to $39/barrel by 2015. Longer term, the plan is to burn sugar cane biomass for electricity generation and further reduce costs. Grubisich said Brazil began farming sugar cane in the 1500s, with much of that sugar output bound for Europe. During the 1970s' oil shock, sugar cane was redirected towards ethanol creation. Part of its advantage over other plants lies in the amount of ethanol that can be generated per hectare of crop. Last year, 6 million hectares of sugar cane produced 25 billion liters of ethanol. Grubisich stressed that rain forests are not being cleared for sugar-cane production, as too much rain hinders the plant's growth. If the country fully exploited the amount of land suitable for sugar-cane farming, it could have 32 million hectares generating 160 billion liters.
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