Profitability in the focus of the corn ethanol industry

Towards the second wave of development of the corn ethanol industry in Brazil, it is important to highlight the need for investors to increase the efficiency of their operations and the importance of considering other indicators in addition to ethanol yield to measure the performance of this industry. Although ethanol yield per ton of corn is the most widespread efficiency metric on the market, the shortest path to achieving greater profitability in an industrial corn ethanol plant involves increasing the solids content in the process, maximizing ethanol production. , DDGS and oil without necessarily requiring investment in increasing capacity.

Despite the growth shown by the sector in recent years, corn ethanol plants need to be prepared to deal with externalities that can impact the results of the operation. Challenging political and economic scenarios impact the business environment, commonly resulting in fluctuations in commodity prices, changes in public policies for biofuels and changes in the regulatory and macroeconomic environment. Such impacts on the market can challenge the industry's operational results, and strategies are needed that maximize the profitability of assets in order to protect the profitability of the operation.

To demonstrate the potential results of the operation with a high solids content, the graph below simulates the operation of a corn ethanol plant of approximately 450 million liters/year. The simulation result indicates that a 2 percentage point increase in fermentation solids can maximize results by 37 million reais (net profit). On the other hand, to achieve this same result by increasing ethanol yield, it would be necessary to increase performance by up to 20 liters per ton. This means an increase in yield of more than 4%, a challenge that can come up against the limits of the process and the raw material.

In this way, it is worth challenging the current paradigm in the corn ethanol industry, which strictly correlates profitability to the ethanol yield per ton of corn. Taking into account the solids content in the process as a preferred path, it is possible to leverage the plant's production capacity and increase its economic result.

However, operating with a high solids content demands biotechnological solutions that support the conditions of this operating strategy: higher levels of lactic acid and acetic acid, and elevated temperature. Under these conditions, advanced yeasts become the profitability differentiator for plants, especially in assets that are already working at their maximum capacity, delivering the binomial yield and robustness for the operation. These yeasts provide an increase of between 5% and 7% in the ethanol yield per ton of corn, an increase of between 15% and 20% in oil extraction and a reduction in the consumption of urea as a source of nitrogen.

Ethanol profile in Brazil

One of the most promising sources of ethanol is corn. Brazil leads the production of corn ethanol in Latin America and has become fertile ground for the sector's expansion in less than a decade. The expansion of the segment in the country is due to the emergence of new plants in the last five years, whether dedicated plants that produce ethanol only from cereals, or the expansion of plants that process sugar cane and start using corn in the off-season.

Today, corn ethanol already represents 15% of the entire volume of ethanol consumed in the country. Of 30 to 32 billion ethanol, corn represents 5 billion liters. By 2030, it is expected that at least this volume will reach 10 billion ethanol, 20% of that consumed in the country, according to the National Corn Ethanol Union (UNEM). Still according to the institution, Latin America has 30 corn ethanol plants (Argentina, Uruguay, Paraguay, Bolivia and Brazil), 18 of which are in operation in Brazil, with emphasis on the states of Mato Grosso, Mato Grosso do Sul and Goiás, in addition to 9 plants under construction throughout the national territory, including the North and Northeast regions.

The biofuels industry has enabled a new path towards renewable and more sustainable energy, and the biological solutions industry continues to invest in technologies to optimize operation performance and boost the competitive advantage of corn ethanol plants, providing greater productivity, quality and optimized production flows. In this way, the corn ethanol industry will continue to increase its efficiency and contribute to the construction of a more sustainable society.