Brazilian companies start larger use of energy cane

Big sugar and ethanol groups intend to kickstart in the next crop season, for 2017/18, the use of “energy cane” on an industrial scale at some of their traditional mills. This type of sugarcane, considered by its advocates as a “disruptive” technology for the industry, was initially developed to be the main raw material for the production of cellulosic ethanol and electricity from biomass.

Companies including GranBio, Odebrecht Agroindustrial and Raízen Energia have been developing sugarcane plantations with the new species in the last few years. Even though energy cane may have a lower yield than conventional sugarcane when it comes to producing ethanol or sugar, it has the advantage of having a much higher agricultural productivity, concentrating twice as much biomass per hectare as a conventional cane crop.

Owner of one of the two cellulosic ethanol mills in Brazil, GranBio has already conducted an “industrial-scale test” of energy cane processing in the 2014/15 harvest at its Usina Seresta, located in Teotonio Vilela, Alagonas, but the business will only gather traction in the next season.

With the 1,000 hectares of energy cane that it will conclude planting in Alagoas next year, the company in September leased a mill in the region of Coruripe, called Usina Guaxuma, which belongs to the assets of bankrupt group João Lyra, and intends to resume its activities in the next season using the new raw material.

“The goal is to show you can use energy cane to produce first-generation ethanol and have biomass,” Bernardo Gradin, CEO of GranBio, told Valor. He estimated that the investment to recover equipment that was deteriorating and begin the production would be R$15 million.

If the energy cane productivity in its first 1,000 hectares stays within the average, GranBio will harvest 140,000 tonnes – still below Guaxuma’s capacity, of 1.8 million tonnes per harvest.

To ensure the plant’s viability, in the beginning, Guaxuma will also operate with conventional cane, but the idea is to use only the new species when there is enough supply. For that, over the next three years GranBio will progressively plant its energy cane in the half of Guaxuma’s farming space, also leased, of 6,000 hectares. The other half was leased by Usina Coruripe.

The beginning of industrial-scale adoption of energy cane is also largely associated to the growth strategy of Vignis, a company focused on genetic improvement of sugarcane that in the next season will harvest energy cane for Odebrecht and Raízen Energia, with which it has long-term supply contracts.

Odebrecht Agroindustrial’s mill in Rio Claro, Goiás, is likely to process 250,000 tonnes of energy cane in the next cycle, Celso Ferreira, vice president of operations and engineering, told Valor.

This will only be possible because of the deal made with Vignis in 2014, which since then planted 2,000 hectares of energy cane to supply Odebrecht. “We made tests last year, when the cane plantation was in its growth phase. We have to make some adjustments at the mill because of the larger fiber content, but nothing exceptional. With the industrial facility we have, we will continue milling perfectly,” Mr. Ferreira said.

The goal is to reach 2019/20 processing 600,000 tonnes of energy cane at the Rio Claro mil, complementing with conventional sugarcane. Mr. Ferreira said that other plants, such as Morro Vermelho, might also process the new species, but the position is still one of caution.

“The next crop is decisive. Then we will be able to evaluate the industrial processing, the farm productivity, if it makes sense to expand the crushing of energy cane at Rio Claro and if it is worth taking it to other plants,” he said.

As for Raízen Energia, in the next harvest it will receive 400,000 tonnes of energy cane from Vignis, the first harvest of the type to be processed at industrial scale at the company’s mills. Until then, Raízen will only crush energy cane as a test. Contacted by Valor, the company declined to comment because it is in a quiet period.

If it is up to Vignis, the adoption of energy cane will expand in the following seasons. “This year, we harvested 200,000 tonnes of energy cane. In the next, we expect to harvest 1.5 million tonnes. We are ramping up quite aggressively,” said the CEO of Vignis, Luis Rubio, who said he was negotiating with more mills to establish supply contracts. Among the company’s clients, Zilos is likely to take one more season to process energy cane. Vignis will begin planting the new variety next year.

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