Brazil Enters a New Phase of Ethanol Diversification
Brazil’s ethanol industry is beginning to expand beyond the sugarcane and corn feedstocks that have traditionally dominated domestic production.
New projects are exploring ethanol derived from wheat, barley, sweet potatoes, soy-processing residues, food waste and other locally available raw materials.
The shift represents a new phase in the development of one of the world’s largest biofuel industries.
Sugarcane remains the foundation of Brazilian ethanol production, while corn has grown rapidly over the past decade, particularly in the country’s central-western agricultural regions.
The emerging generation of projects is now looking at feedstocks that could support ethanol production in regions where neither sugarcane nor corn has historically provided the same industrial base.
Wheat-Based Ethanol Brings Production to Southern Brazil
One of the most significant projects is being developed by Brazilian biofuel producer Be8 in Rio Grande do Sul.
The company is investing approximately R$1.7 billion in a facility designed to produce ethanol primarily from wheat and other winter cereals.
The plant is expected to have annual ethanol production capacity of around 220 million litres when it begins operating, currently targeted for 2027.
Using winter crops creates an additional market for grain grown between major summer planting seasons and could strengthen the economics of agricultural production in southern Brazil.
The project also illustrates how ethanol expansion is moving geographically beyond the traditional sugarcane regions of São Paulo and the corn-processing centres of Mato Grosso.
New Feedstocks Could Reshape Brazil’s Biofuel Map
Other developers are examining raw materials ranging from sweet potatoes and food waste to soy molasses and agave.
The attraction is not simply technological diversification.
Different feedstocks can allow ethanol plants to operate in regions with distinct agricultural conditions, create additional value from residues and provide new markets for crops that currently have limited industrial demand.
Brazil’s higher ethanol blending requirements are also reinforcing the incentive to expand production.
The country temporarily raised the mandatory ethanol content of gasoline from 30 percent to 32 percent in July 2026, increasing domestic demand for ethanol from both established and emerging production routes.
Industry analysts cited by Reuters expect grain-based ethanol to account for a growing share of Brazilian supply in the years ahead, with some estimates suggesting grains could eventually represent as much as 45 percent of national ethanol output.
The expansion does not mean sugarcane is losing its central role.
Instead, Brazil is developing a more diversified biofuel system in which multiple crops, agricultural residues and waste streams can contribute to the same national fuel market.
That diversification could improve regional supply resilience while creating new agricultural and industrial opportunities across the country.
Sources
Reuters — Wheat, Trash and Sweet Potatoes: Brazilian Ethanol Is a Smorgasbord of Raw Materials, June 3, 2026
Brazil National Agency of Petroleum, Natural Gas and Biofuels — Ethanol Production Data, 2026
Brazil Ministry of Mines and Energy — National Ethanol Blending Policy