Brazilian agencies partner to bolster ethanol

Last week, the Brazilian Innovation Agency, FINEP (Research and Projects Financing), and Brazil’s National Development Bank (BNDES) entered into a new partnership to promote bioethanol 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 $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 bioethanol. Its goal is to invest up to $540 million in technology projects over the next three to four years, which would advance the use of sugarcane, particularly 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.

FINEP has also announced a credit line of $70 million for investment in new technologies for pre-salt oil development. The resources will be distributed in two public auctions to be held next week: one, for $54 million, for private sector partnership projects with science and technology institutions, focused on technology development for pre-salt oil exploration. The other $16 million will support the creation or enhancement of laboratories at science and technology institutions, to meet the demands of suppliers in the oil and gas production chain.

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 or bioethanol – 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.

SOURCE: Brazilian Innovation Agency and Brazil’s National Development Bank