Brazil, the world’s second largest producer and consumer of ethanol after the US, increased its output but reduced exports in 2014, according to an analysis by the US Energy Information Administration (EIA) of the country’s energy sector, released this month.
Last year, Brazil produced 492,844 barrels per day (b/d) of ethanol, a rise by 4% compared to 2013 and above the previous record level registered in 2010, the analysis says, citing data by the Empresa de Pesquisa Energetica (EPE).
The Brazilian government started encouraging ethanol production in the 1970s in response to the country's reliance on oil imports and its sugar cane surplus. In February 2015, it lifted the ethanol blend requirement in gasoline to 27% and is now considering an increase to 27.5%. The ethanol industry, however, is struggling as the cost of land and labour is rising and the government’s gasoline price controls weaken the competitiveness of ethanol as an oil replacement, the analysis says.
In 2014, Brazil’s ethanol exports dropped 52% from the previous year to 24,125 b/d, with the US accounting for 52% of the total. The Asia-Pacific imported 9,554 b/d (up 9.6%), Africa 1,344 b/d (down 39.2%), Europe 388 b/d (down 88.2%) and Central and South America 101 b/d (down 97%).
Brazil also imported 7,789 b/d of ethanol last year, almost entirely from the US. While Brazil is a large ethanol producer, it also imports the product due to several factors, including droughts, the seasonality of sugar cane harvests and high sugar prices which could prompt a shift to the production of sugar rather than ethanol.
Total biofuel production in the country increased 5.5% last year to 16.7 million tonnes of oil equivalent. Biodiesel production was up 17.2% to 58,590 b/d.
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