Brazil’s BNDES Bank Offers $1 Billion to Ethanol R&D.
Brazil’s behemoth development bank, BNDES, offered $1 billion to the Brazilian Innovation Agency to fund research and development into second generation ethanol, the bank said late Tuesday.
The money goes to support companies working on turning sugarcane biomass and sugarcane ethanol for use in diverse industrial applications over the next three years.
The loans would be part of the government’s Joint Plan to Support Industrial Technological Innovation in the sugar-based Energy and Chemical Sectors.
Brazil is the world’s largest sugarcane producer and that is where all of its ethanol comes from. In Brazil, ethanol is used both as a gasoline additive (20% to 22% blend) or as a pure motor fuel (100% ethanol). Ethanol is also being used in co-generation power facilities, which are expanding as part of Brazil’s energy matrix. Industry heavyweights like Cosan (CZZ) are also researching ways to make fuel ethanol friendly for jet fuel, and turn sugarcane bagasse, the leafy waste of the cane stalks after they are crushed into sugar molasses, into second generation ethanol, as well.
In Brazil’s total energy supply matrix, which includes electric power and transportation, sugarcane ethanol accounted for 13% in 2005 and is expected to rise to 20% in the next decade, according to a 2010 study by Deloitte & Touche called “Brazil’s Energy Matrix and Prospects for Energy Integration with South America.”
This past weekend, March 19-20, the governments of Brazil and the US signed a memorandum of understanding whereas the two countries would increase the transfer of technology and R&D know-how in the growing biofuels market.
The joint innovation portfolios of BNDES and the Brazilian Innovation Agency in ethanol and its derivates totals R$ 413.5 million ($247 million). BNDES is responsible for R$169.1 million ($101 million) through financing and the agency for R$ 244.4 million ($146.1 million). The pledge of the $1 billion Tuesday effectively doubles the number of currently available resources in the sector and brings Brazil near the investment levels of the US. |
