Biogas: New Energy for Brazil's Cane Sector?

Brazil's cane industry is already a showcase for sustainable agribusiness – it currently uses over 50% of the sugarcane it processes for the production of fuel ethanol, while almost all of the fibrous waste from milling, bagasse, is used for the generation of steam and electricity.

However, leading companies are now showing clear signs of interest in a third technology, biogas generation. Biogas generation will, at the very least, further enhance the sector's capacity to generate energy. Moreover, if its potential were to be fully realised, it could dramatically reduce the carbon footprint of cane production.

Cane is already a green business...

In recent years, over half the cane produced and milled in Brazil has been used to produce ethanol, some 90% of which enters the country's fuel distribution system where it is used either as an additive in gasoline (all gasoline contains 27% ethanol) or is sold in pure form at the pump as a substitute for gasoline. Some 70% of light vehicles on Brazil's roads today are flex-fuel, meaning that they are able to run on pure ethanol, or pure gasoline, or any mixture of the two. UNICA, the representative body of the cane industry, calculates that from 2003 (the year flex-fuel cars were introduced) to 2019, the use of ethanol as an additive and a substitute for gasoline in Brazil has reduced greenhouse gas emissions by a total of 553m metric tons of CO2 equivalent.

In addition, all of Brazil's mills are self-sufficient in energy generation – operations are powered by the burning of bagasse, the fibrous waste produced after cane milling, in the mill's boilers. Furthermore, 40% of mills produce more electricity via this system than they consume, and this surplus is sold to the grid, contributing an estimated 3.5% of national electricity supply in 2018.

Thus, via ethanol and electricity, the cane industry is already a significant contributor to Brazil's renewable energy supply. And it may be about to take a significant further step forward.

...and biogas could take it to a new level

Several of the industry's most progressive players (including Raízen, Adecoagro, São Martinho, Cocal and Jalles Machado) are either investigating, or already investing in, the generation of biogas from underutilised waste products of cane processing. The most common of these is vinasse, the liquid waste generated by ethanol production. Vinasse is produced in considerable volumes – for each litre of ethanol produced, there will generally be 10 to 14 litres of vinasse generated. It is generally returned to the cane fields as a low-grade fertilizer substitute. However, owing to its bulk and low nutrient density, it is costly to transport vinassse over long distances, and it can present some technical as well as economic challenges. It is a very acidic product, so it may affect soil pH, and it can smell unpleasant and attract flies, making it impractical to apply on fields near residential areas.

Other waste products that can be used to produce biogas are filter mud, a solid residue from the milling process, also usually returned to the field, and cane leaves that are removed at harvesting and normally left in the field.

Biogas is produced from these raw materials in a biodigestor, where organic matter is anaerobically converted (i.e. in the absence of oxygen) by bacterial activity to a mixture of methane and CO2. This biogas is suitable for burning to power electricity generators. However, there is also an option to further purify the biogas into 95% methane. This can then be used as a substitute for natural gas for industrial and household use – indeed, one of the projects announced involves the collaboration between a milling company, Cocal, with a gas distribution company, in order to produce methane at a mill and then distribute it to users in two cities in the region.

A future fleet of (bio)gas guzzlers?

Looking further ahead, the truly revolutionary development is the possible use of methane generated in this way as a substitute for diesel in the tractors and trucks involved in cane production. It is estimated that to produce a ton of cane and bring it to a mill for processing, around 4 liters of diesel are consumed in field cultivation and cane transport. Diesel is often the single biggest input cost for a cane mill, and the potential savings on fuel costs are projected to be substantial. Moreover, the greenhouse gas emissions reduction associated with such a change in fuel are also enormous.

How far-fetched is it to imagine substituting diesel fuel with methane? Gas-powered light vehicles are already a reality in Brazil, but only account for some 4% of the total fleet. And major manufacturers of trucks and tractors, such as Scania and New Holland, have already developed gas-powered prototypes. They have joined the effort to develop the market, together with potential methane producers.

What are the chances of this taking off? It is very early to evaluate, but the alliance between leading sugar and ethanol players with major tractor and truck manufacturers provides credibility. Meanwhile, Brazil's new policy to boost transport sector emissions reductions, RenovaBio, which enters into force in 2020, will provide financial incentives for emissions reductions associated with biofuel production and with electricity generation. It currently remains unclear how much of a boost RenovaBio could bring to any project aimed at substituting diesel with biogas, because the pricing of carbon emissions reductions under the new scheme is complex and will be subject to market forces.

However, for project developers, any extra revenue coming from RenovaBio is seen as icing on the cake. The economic logic that will drive projects stems from the significant cost savings and fuel independence associated with replacing purchases of diesel with a waste-derived alternative produced at the mill itself. So yes, it is early days – but this is an initiative that is definitely worth watching.

  • Andy Duff

    Head of RaboResearch Food & Agribusiness - South America; Global Strategist - Sugar
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