Rio de Janeiro — Brazil's production of biodiesel and sugarcane-based ethanol advanced year on year in September, maintaining a record-setting pace as demand for the two fuels continues to grow, according to data released Friday by the National Petroleum Agency, or ANP.
Biofuels output continued to benefit after Brazil implemented the RenovaBio program to boost consumption, reducing the country's dependence on imported fuels and meet targets to cut greenhouse-gas emissions. Brazil is one of the world's leading producers and consumers of renewable fuels.
Biodiesel output set another fresh record high in September after Brazil bumped the volume of the biofuel that is blended with diesel and sold at the pump to 11% from 10% on September 1. The increase was the latest in a series of annual bumps that will eventually push the mandate to 15% by 2023, according to the Mines and Energy Ministry.
Brazil produced 558.3 million liters of biodiesel in September, an increase of 15.8% from 482.3 million liters in September 2018, the ANP said. September's biodiesel output also advanced 10.9% from the previous record of 503.1 million liters set in August, the ANP said.
Each 1% increase in the biodiesel-diesel blend sold at the pump represents about 600 million liters of additional production per year, according to the Brazilian Biodiesel and Biokerosene Union, or Ubrabio, and Brazilian Vegetable Oil Industry Association, or Abiove. The two trade groups represent biodiesel producers in Brazil.
The government, meanwhile, expects the 15% mandate to increase Brazil's biodiesel output to an annual rate of 10 billion liters by end-2023.
About 77% of biodiesel production comes from soybeans, with 17% produced from animal fats and the remaining amount from raw materials such as cotton and recycled cooking oil.
SUGARCANE HARVEST SLOWS
Ethanol output, meanwhile, continued to advance year on year in September, but fell back from the record high registered in August as the sugarcane harvest slowed, the ANP data showed.
Sugar mills produced 4.75 billion liters of ethanol in September, an increase of 13.1% from 4.20 billion liters in September 2018, the ANP said. September's ethanol production, however, was down 9.7% from the record-setting 5.26 billion liters registered in August, the ANP said.
Brazil's ethanol production will continue to trend lower in coming months as the harvest season fades, although the outlook for the biofuel remains bright. Sugar mills have continued to direct more of the cane crush toward ethanol rather than sweetener in 2019 amid stable international sugar prices and strong demand for the fuel from Brazilian motorists.
About 90% of all new cars, trucks and light vehicles sold in Brazil are flex-fuel, meaning they can operate on hydrous ethanol, gasoline or any combination of the two fuels.
Ample supplies of the biofuel have also made hydrous ethanol prices more attractive to consumers. Motorists typically favor hydrous ethanol when the price for a liter of the biofuel falls to 70% or less than the price of a liter of gasoline, which offsets the lower energy content of the hydrous ethanol.
Sugar mills produced 3.44 billion liters of hydrous ethanol in September, up 14.7% from 3.0 billion liters in September 2018, the ANP said. But hydrous ethanol output declined 7.5% from 3.72 billion liters in August, the ANP said.
Anhydrous ethanol output expanded 10.0% year on year in September to 1.31 billion liters versus 1.19 billion liters in September 2018, the ANP said. September's anhydrous ethanol output was down 14.9% from August's 1.54 billion liters, the ANP said.
Gasoline sold at the pump contains 27% anhydrous ethanol.
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