Eucalyptus Plantations May Cost Corn Ethanol Industry Billions in Brazil
In Mato Grosso, Brazil, corn ethanol plants could require significant investments in eucalyptus plantations to meet their energy needs. According to Itaú BBA's calculations, planting eucalyptus to fuel the state's corn ethanol industry by 2030 would necessitate between R$7.6 billion and R$14.3 billion in investment over the coming years.
The estimates assume that native forest biomass will no longer be used after 2035, as per an agreement signed with the Public Prosecutor's Office in June. In a conservative scenario, where cogeneration units have low efficiency, 82,000 hectares of eucalyptus would need to be planted each year to meet the state's corn ethanol production of 12 billion liters by 2030.
To make up for this requirement, an additional R$14.3 billion in investment is needed, considering an average cost of R$35,000 per hectare over a 13-year period. However, if cogeneration plants have an average level of energy efficiency, the required eucalyptus area would be lower, and the investment needed would be around R$9.6 billion.