Corn ethanol’s next frontier is ships, jets and a bigger fuel mandate

Brazil’s corn ethanol expansion still has room to run, even as tighter margins begin to test the economics of new projects.

That was the message from executives at 3tentos, FS Fueling Sustainability and Vibra during a panel at Agro 360, an event organized by Brazil Journal in partnership with The Agribiz. The discussion pointed to a market whose growth is being driven not only by Brazilian drivers, but also by global transport sectors under pressure to cut emissions.

The potential demand pool is widening. Brazil and other countries are weighing higher mandatory ethanol blends in gasoline. Shipping companies are assessing lower carbon fuels for maritime routes. Airlines are moving into SAF, sustainable aviation fuel, a market that remains small but is attracting capital and regulatory attention.

For Brazilian producers, that combination could support a long cycle of new investment, provided the supply chain can keep up.

Demand is moving beyond the car tank

Rafael Abud, chief executive of FS Fueling Sustainability, said governments and companies across Asia, Latin America and Europe are discussing larger compulsory biofuel blends. That matters for Brazil because any shift in blending rules can quickly translate into industrial demand for ethanol.

“If even a fraction of those markets materializes, we will have a long investment cycle,” Abud said.

The aviation market is another possible source of growth. SAF, or sustainable aviation fuel, is designed to reduce the carbon footprint of air travel and can be produced from different biological inputs. While the source article does not specify which feedstocks would dominate, the executives identified the segment as one of the demand engines that could lift Brazil’s biofuel industry.

Shipping is also entering the conversation. Maritime transport is difficult to decarbonize, and fuel suppliers are looking at alternatives that can be scaled. For ethanol producers, the possibility of serving vessels as well as cars and planes changes the scale of the opportunity.

Inside Brazil, Vibra sees additional demand still available in the domestic market. Tomás Cardoso, Vibra’s director of supply and trading, said ethanol consumption has more room to grow, especially in the North and Northeast, where ethanol’s share of the fuel mix remains low.

Brazil’s agricultural edge meets logistical limits

João Marcelo Dumoncel, chief executive of 3tentos, said Brazil’s competitive advantage begins in the field. The country’s farming system allows producers in many regions to grow more than one crop on the same land in a single year, a feature that supports the supply of corn for ethanol plants.

“Brazil is practically the only country that can produce two crops in the same area,” Dumoncel said, highlighting the country’s capacity to expand corn output.

That agricultural base is one reason corn ethanol has grown quickly in Brazil, complementing the country’s more established sugarcane ethanol industry. Corn plants are often tied to grain producing regions, where ethanol production can add another source of demand for farmers and create byproducts used in animal feed.

But the panelists also made clear that the sector’s expansion is not automatic. Two bottlenecks stood out. The first is logistics. As production moves deeper into Brazil’s grain belt, ethanol must still reach consumer markets, ports and industrial users at competitive cost. Transport infrastructure can determine whether a plant looks attractive on paper and viable in practice.

The second is biomass from planted forests. The executives said mills need secure access to this supply to sustain expansion. Biomass is important for the energy needs of industrial plants, and insufficient availability can complicate plans for new capacity.

These constraints are arriving at a more delicate moment for project economics. Lower margins for grain producers, combined with the need for infrastructure and biomass, are raising questions over whether all plants now being built will prove viable.

The Agro 360 event was sponsored by Vibra Energia, Agrolend, Banco Original and FS Fueling Sustainability. Videos from the event’s other panels are available on Brazil Journal’s website.

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