Apr 01, 2024
New Ethanol Facility in Rio Grande do Sul, Brazil to Utilize Wheat
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
The Brazilian company Be8 and the mayor of the city Passo Fundo in northern Rio Grande do Sul signed an agreement last week to build an ethanol facility in the municipality that will be operational in 2026. The R$ 1 billion facility will be unique because it is the first large ethanol facility in the state and the first in Brazil to use primarily wheat to produce ethanol.
Wheat will be the primary grain utilized to produce ethanol, but the facility will also be able to use tractile, corn, and other small grains. The facility will utilize 525,000 tons of grain annually to produce 209 million liters of ethanol.
Rio Grande do Sul currently imports nearly 100% of its ethanol from other Brazilian states and this new facility is expected to supply approximately 20% of the ethanol consumed in the state. Two byproducts of the facility will be DDG's (dried distiller's grains) for the livestock sector and gluten. Currently, Brazil imports nearly 100% of its gluten needs.
The facility is expected to support wheat prices in the state and provide an incentive for farmers to increase their wheat production. Winter wheat is the most popular second crop in the state since it is too cold for safrinha corn production. Rio Grande do Sul is Brazil's largest wheat producing state.
The facility will generate its own electrical needs by burning biomass with the excess electricity distributed to the city. The project will provide 800 construction jobs and 175 permanent jobs. The project will be financed through the Brazilian National Development Bank (BNDES).