Crude Oil vs. Ethanol – in Brazil?

by | Nov 30, 2012 | Industrial Energy & Onsite Utilities, Industry

Jim Cahill

Jim Cahill

Chief Blogger, Social Marketing Leader

Global market forces continue to cause change in the energy mix. Emerson’s Alan Novak, leader of the alternative energy industry team, looks at the market forces on Brazilian ethanol producers.

Brazil has long been a supporter of ethanol as a motor fuel, ranking second to the US in both global production and consumption.


Source: Oil & Gas Journal

Brazil’s ethanol market has been driven in large part by relatively inexpensive production from sugarcane (which has a lower cost of production than corn-based ethanol) and an auto fleet that has the highest percentage of ethanol capable (flex fuel) vehicles in the world.

Source: ISI Emerging Markets Blog

Brazil has also recently become a significant exporter of sugarcane ethanol to the US as corn ethanol comes under increasing margin pressures due to high corn prices.

Against this backdrop, it is surprising to see the Brazil ethanol market under pressure. Even given its ready supply and available fleet, domestic demand is dropping…

Source: SciTech Daily

And even the Brazilian national oil company, Petrobras, is hinting at substantially reduced spending with a re-focus away from ethanol and toward development of recent pre-salt oil fields as noted in a recent Bloomberg Businessweek article, Petrobras Ethanol Pipeline Pullback Raising Fuel Price.

If ethanol is facing headwinds such as these in one of its strongest markets, what does it mean for its global future as a motor fuel? Only time will tell.

Popular Posts


Subscribe for Updates

Follow Us

We invite you to follow us on Facebook, LinkedIn, Twitter and YouTube to keep up to date on all the latest news, events and innovations to help you take on and solve your toughest challenges.

Want to re-purpose, reuse or translate content?

Please do, Just link back to the post and send us a quick note so we can share your work. Thanks!

Our Global Community

Emerson Exchange 365

The opinions expressed here are the personal opinions of the authors. Content published here is not read or approved by Emerson before it is posted and does not necessarily represent the views and opinions of Emerson.