Eucalyptus Boom in Mato Grosso Driven by Corn Ethanol Demand
The demand for biomass in Mato Grosso, Brazil is driving interest in eucalyptus cultivation as companies and farmers seek to meet the energy needs of corn ethanol plants. According to Fausto Takizawa, chairman of the Mato Grosso Reforestation Association (Arefloresta), investment funds, agribusiness companies, farmers, and traditional eucalyptus producers are now targeting the biomass market.
The state government has set a target of expanding eucalyptus plantations to 700,000 hectares by 2040, requiring more than a fourfold increase in cultivated area. However, achieving this expansion will require investments of R$8.5 billion, or about R$610 million annually through the end of the next decade.
Some companies are already taking action, with JFI Silvicultura signing a contract to plant 3,000 hectares annually starting in 2026 for at least three years with Inpasa, Brazil's largest corn ethanol producer. Marcelo Schmid, managing partner at Grupo Index, estimates that more than 60% of the biomass consumed by medium-sized and large agribusiness companies in Mato Grosso comes from native forests.