Positioning Brazil for biofuels success

Food & Agriculture, Strategy & Analysis Article, Brazil biofuels success

Article at a glance:

As higher oil prices drive global demand for biofuels, Brazil’s well-established ethanol industry—including both local and multinational companies—seems well positioned for profitable growth.
Although annual global ethanol exports now total only about 6.5 billion liters, McKinsey research suggests that by 2020 they could reach 50 billion to 200 billion liters.
To supply that demand, Brazil’s companies will have to ramp up their export capacity significantly, which would require investments of as much as $100 billion in land, distribution infrastructure, and new mills.

Note: This article includes translations in Portuguese and Spanish.

This article contains the following exhibits:

Exhibit 1: To make ethanol, Brazil uses sugarcane as the raw material—the main differentiator in production costs.
Exhibit 2: Expansion of ethanol production in Brazil would be enough to supply the export market, and the impact on land use would be limited.
Exhibit 3: By 2020, the cost to produce a liter of ethanol in Brazil and ship it to Western Europe could be far lower.

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Abstract

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