Brazil to increase corn ethanol share to 30% in 2026/27 season

Corn-based ethanol production in Brazil continues to accelerate and is projected to reach 30% of total ethanol output in the Centre-South region in the 2026/27 season. This will amount to roughly 10.6 billion litres — a 14% year-on-year increase — with hydrous ethanol accounting for 65% of the mix. The rise is driven by the rapid expansion of ethanol mills in the Central-West and booming second-crop corn production.

The segment’s growth stems from abundant corn supplies — Brazil is the world’s third-largest producer — and strong cost competitiveness. Ethanol mills primarily rely on second-crop corn, which made up 80% of Brazil’s total grain output in 2024/25. This provides processors with a steady feedstock base without competing with the food sector.

Corn ethanol also benefits from lower production costs: on average BRL 1.85/litre compared with BRL 2.45/litre for sugarcane ethanol. Valuable byproducts, including DDG and vegetable oil, further enhance profitability. One tonne of corn yields 420–460 litres of ethanol, 260–300 kg of DDG, and 15–20 kg of oil — supporting additional revenue and reducing feed costs in intensive livestock production.

Despite strong growth, the industry faces challenges, particularly its dependence on biomass — mostly wood chips — for steam generation. As the sector expands, feedstock availability is becoming a concern. Some mills are testing alternative biomass sources, such as animal waste, but efficiency remains below expectations.

The Central-West remains the hub of corn ethanol: 20 of the 22 operating mills are located in Mato Grosso, Goiás, and Mato Grosso do Sul, which together account for 60% of Brazil’s second-crop corn output. A further 31 projects announced between late 2024 and 2025 could add another 10 billion litres of capacity. Brazil currently operates 13 standalone corn-only mills and nine flex-fuel mills using both corn and sugarcane. Unlike cane mills, corn-based plants operate year-round, adding to the sector’s competitiveness.

Tags: Brazil, ethanol, corn