Mato Grosso corn ethanol may require R$ 14.3 billion in eucalyptus investment

The corn ethanol industry in Mato Grosso, Brazil, may require significant investments in eucalyptus cultivation to meet its energy needs. According to estimates from Itaú BBA, the required investment for biomass to power factory boilers could range between R$ 7.6 billion and R$ 14.3 billion over the coming years.

In a conservative scenario where energy cogeneration units are less efficient, the projected production of 12 billion liters of corn ethanol in the state by 2030 would require approximately 82,000 hectares of eucalyptus forest annually. Given that eucalyptus takes seven years to reach its first harvest cycle, Mato Grosso would need 572,000 hectares planted by 2028 to meet demand. As of the end of last year, the state had 165,000 hectares of the species planted, according to the Mato Grosso Institute of Agricultural Economics (Imea).

In a base-case scenario involving medium energy efficiency, the required biomass area would be lower, necessitating 440,000 hectares of eucalyptus with annual harvests of 63,000 hectares. The higher investment estimate of R$ 14.3 billion is based on an average cost of R$ 35,000 per hectare over a 13-year period, covering planting and maintenance through multiple harvest cycles.