Brazil’s corn ethanol boom lifts domestic demand and supports record grain output

Corn processing rises more than thirtyfold

Brazil’s corn ethanol industry has become a major source of domestic grain demand within a decade. According to Valor Econômico, 22.2 million tonnes of corn were allocated to ethanol production in the 2025/2026 season, compared with 630,000 tonnes in 2016/2017. The country currently has 29 biorefineries operating, while 13 have construction authorization and another 14 are planned, based on data from the National Union of Corn Ethanol.

The expansion began in the Center-West, where abundant grain supplies and previously weak local demand created favorable conditions for processing. Corn use by ethanol plants stood at only 230,000 tonnes in 2014/2015. Lucílio Alves, a researcher at the Center for Advanced Studies in Applied Economics, told Valor Econômico that plant efficiency and profitability exceeded initial expectations, encouraging further investment.

The new industrial demand has altered the economics of Brazil’s second corn crop. Unlike soybeans, Brazilian corn prices are determined largely by domestic supply and demand because exports are not the crop’s primary destination. Ethanol plants provide a firmer regional buyer, reduce reliance on overseas sales and improve liquidity for producers, particularly in the Center-West and North.

Record harvest meets record demand

Brazil harvested 141.7 million tonnes of corn in 2024/2025, an increase of 23.6% from the previous season, according to the Brazilian Institute of Geography and Statistics. Production doubled over ten years while planted area increased by about 38%, indicating substantial productivity gains. Farmers subsequently expanded the planted area by roughly 4% this year.

The National Supply Company projects a slight decline in production and yields for 2025/2026, mainly because of weather conditions. Nevertheless, strong demand has partly offset higher expenses for fertilizer, transport, insurance and financing. Felipe Junqueira of Scot Consultoria said the excellent 2024/2025 harvest coincided with record demand led by corn ethanol plants. As a result, the additional supply did not drive prices lower.

Ethanol production also creates dried and wet distillers grains, known as DDG and WDG. These protein- and fiber-rich coproducts are used in cattle feed and have potential applications in dairy farming and pig production. Their availability links grain processing more closely with Brazil’s animal-protein sector and can reduce local feed costs.

Carbon capture and aviation fuel open new markets

FS, Brazil’s first corn ethanol producer, plans to inaugurate a carbon capture and storage facility in Lucas do Rio Verde, Mato Grosso, in September. The BECCS system will collect carbon from corn fermentation tanks, pressurize it and inject it underground. Valor Econômico reports that the project is intended to make FS the country’s first producer of carbon-negative fuel.

Aviation and maritime transport could provide the industry’s next sources of demand. Current global jet-fuel consumption is almost 400 billion litres, while sustainable aviation fuel production totals 2 million tonnes—only 0.6% of worldwide demand, or less than four days of aviation operations. Sustainable aviation fuel can reduce fossil-fuel carbon emissions by as much as 90%, according to Ana Lígia Lenat of the Brazilian Confederation of Agriculture and Livestock.

Summit Agriculture Group, FS’s founding shareholder, has announced JetBio, a company intended to produce sustainable aviation fuel from ethanol in Brazil. The project involves investment of up to US$2 billion and is scheduled to begin production from 2030. These initiatives could connect Brazil’s expanding corn-processing base with global decarbonization targets, although their development will depend on investment, technology deployment and demand for lower-carbon fuels.