Brazil’s Ethanol Sector To Get US $540M Boost

Last week, the Brazilian Innovation Agency, FINEP, and Brazil’s National Development Bank (BNDES) entered into a new partnership to promote ethanol development. As the two primary sources of government support to innovation in Brazil, FINEP and BNDES have established a program that will provide up to US $540 million in financing to the country’s biofuels sector.

With operations scheduled to begin on July 30, the project aims to promote innovation in the field of ethanol. Its goal is to invest in technology projects over the next three to four years, which would advance the use of sugarcane bagasse and straw, to produce ethanol and new products such as polymers, special oils and biodiesel.

This is an initial step toward the development of an industrial complex for ethanol in Brazil, following a similar model to that of Brazil’s petrochemical industry.

The goal of second generation ethanol is to double Brazil’s ethanol production capacity in the country without increasing the area necessary to plant sugarcane. Second generation ethanol – also called cellulosic ethanol – is a biofuel produced from sugarcane bagasse and straw that has potential to be a breakthrough in the sugar and ethanol sectors in the next five years, and is to be funded by BNDES.

Currently under analysis for economic viability, the technology for manufacturing 2G-ethanol is the subject of research worldwide, particularly in the United States. As the world’s largest producer of sugarcane, Brazil is also in the race to develop cellulosic ethanol, and experts say the country is poised to become a major player in this new market.

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