The 2020/2021 harvest of sugarcane in the Center-South of Brazil is heading towards closure, with the main advance being the successful implementation of the National Biofuel Policy - RenovaBio. Currently, 65% of ethanol producing companies in the country participate in the program and are certified and able to issue decarbonization credits (CBios) - these companies represent about 85% of national ethanol production.

Up to December 11, 2020, more than 17 million CBios had been registered and more than 80% of the bonds had been acquired to meet the targets by the distributors. The Union of the Sugarcane Industry (SINGLE) estimates that by December 31 the sum of CBios generated should reach 18 million. In the 2020/2021 harvest, which runs until March 31, this number may reach 23 million.

"Even with the challenges of this year, we managed to make RenovaBio a reality. Thus, we delivered to Brazilian society a new level of transparency and measurability of the carbon footprint, unparalleled in the world", analyzes Evandro Gussi, president of UNICA. "We need to highlight the serious work carried out by the Ministry of Mines and Energy, the National Agency of Petroleum, Natural Gas and Biofuels, the National Congress and the National Energy Policy Council in implementing the policy", he adds.

Currently, 215 ethanol producing units, 22 biodiesel producing units and 1 biomethane producer are certified. The National Biofuels Policy - RenovaBio was designed to achieve part of the goals for reducing greenhouse gas (GHG) emissions set by Brazil under the Paris Agreement. The program compares the carbon footprint of the different biofuels in their life cycle (from production to combustion in the vehicle) to measure the emission reduction provided compared to the fossil alternative and sets ten-year decarbonisation goals, which are met with increased use of renewable fuels and the trading of carbon credits (CBIO).

2020/2021 harvest records record in sugar supply 

Data obtained until December 1, 2020 confirm the 2020/2021 harvest as the cycle in which sugarcane grown in the Center-South region most offered raw material for products (sugar and ethanol). The amount of total recoverable sugars (ATR) produced by the companies until the beginning of December, totaled 86.33 million tons, surpassing the final data recorded in previous harvests. The projection for the end of the 2020/2021 cycle is 87.54 million tons of ATR accumulated from April 2020 to March 2021.

Essa condição decorre da maior moagem de cana-de-açúcar e, principalmente, da melhora na qualidade da matéria-prima processada. De fato, até 1º de dezembro a moagem acumulada atingiu 594,88 milhões de toneladas (+3,32%) e a concentração de açúcares na planta alcançou 145,13 kg de ATR por tonelada de cana-de-açúcar (+4,24%).

By the end of the 2020/2021 harvest, the amount of raw material processed should reach 605 million tons, with a quality index of 144.70 kg of ATR per ton of sugarcane.

"In the 2015/2016 cycle, the crushing of sugarcane reached a record of 617.71 million tons, but the quality of the raw material was only 130.51 kg of ATR per ton of cane. In that year, the volume was lower, but the quality was much higher. The higher concentration of ATR in the 2020/2021 cycle would be equivalent to processing almost 30 million tons of sugarcane more with the quality within the average of the last years ", explains the technical director of UNICA, Antonio de Padua Rodrigues.

Ethanol and sugar production 

UNICA estimates that 46.04% of the sugarcane processed in the 2020/2021 harvest will be used for sugar production, compared to 34.33% observed in the previous cycle. As a result, the expected sugar production for the current cycle is 38.40 million tons, registering an increase of 43.49% in comparison with the previous harvest.

"The exceptional quality of the raw material that year allowed for a significant increase in sugar production. For the next harvest, indications of a lower supply of sugarcane and the restoration of quality to the historical level should cause a retraction in the supply of sugar. sugar, "explained Rodrigues.

Ethanol production is expected to reach 30.44 billion liters in the current agricultural cycle, down 8.45% compared to the volume observed last season (33.26 billion liters). Of the total produced in the current cycle, 9.76 billion liters must be anhydrous ethanol and 20.69 billion hydrated ethanol.

The production of ethanol from corn, in turn, should reach 2.65 billion liters in the 2020/2021 harvest. This is an increase close to 63% in relation to the volume produced in the last agricultural year (1.62 billion liters).

Ethanol market 

Since the beginning of the harvest until December 1, the production units in the Center-South have sold 20.47 billion liters of ethanol. Of this total, 2.04 billion liters were directed to the foreign market and 18.43 billion liters to the domestic market.

In the domestic market, sales of hydrous ethanol reached 12.71 billion liters and those of anhydrous ethanol 5.71 billion liters.

"The fall in consumption of light fuels was very intense at the beginning of the pandemic, but it is beginning to show signs of recovery now at the end of the year. We are working with a 7% drop in the total demand for fuel from the Otto cycle in the 2020 / 2021 ", explained the UNICA executive.

International 

The Brazilian sugar-energy sector has once again demonstrated its strategic value to Brazil's commercial partners, providing products with competitive prices and a value chain that protects the environment and its workers. From January to November 2020, we exported 28 million tons of sugar, an increase of 70% over the same period of the previous cycle.

"We had smaller harvests in large producers, such as Thailand and India, and the flexibility of production in the Brazilian industry allowed us to take advantage of this opportunity. We observed an increase in demand and prices", analyzes Eduardo Leão de Sousa, executive director of UNICA. As previously mentioned, ethanol shipments also advanced and reached 2.4 billion liters, an increase of 36% from January to November.

Brazil's performance in foreign trade was intense. In May, after negotiations, China allowed the safeguard policy created in 2017 to expire without renewal, which even raised the import tariff on sugar to 95%. With that, the Brazilian product returned to be competitive in the Chinese market, with the 50% entry tax.

The panel at the World Trade Organization (WTO) initiated by Brazil against India had its first hearing postponed due to the pandemic and held in December, with the participation of representatives from Guatemala and Australia, who also have actions against sugar subsidies. .

Costa Rica has also become the target of Brazilian retaliation due to protectionism in the sugar market, with an increase in the import tariff from 45% to 80%. Finally, in the absence of a more advantageous agreement for the export of Brazilian products to the United States, the government did not renew the quota for the entry of imported ethanol exempt from the Common External Tariff of Mercosur, which benefited the Americans in particular.

At the same time, UNICA identified a growing interest from countries in relation to the benefits of ethanol for the reduction of greenhouse gases, local pollution and the decrease in the use of fossil fuels. "We found in countries in Latin America, Africa and Asia, which have a tropical and subtropical climate, favorable conditions for the production of biomass competitively and for the use of this biomass for energy", explains the executive director.

Bioelectricity 

The generation of bioelectricity from sugar cane should reach 22.6 thousand GWh offered to the National Integrated System (SIN) in 2020, showing a growth of around 1% in relation to 2019. The amount equivalent to 5 % of annual electricity consumption in the country or serving 12 million homes, providing a reduction of 7 million tons of CO2, a mark that would only be achieved with the cultivation of 49 million native trees over 20 years.

"It is worth mentioning that in September Law 14,052 was approved with the objective of resolving the judicialization of hydrological risk in the monthly financial settlements in the Short Term Market, which has been going on since 2015 and greatly affects bioelectricity, with a judicialized debt of R $ 10, 3 billion ", analyzes Zilmar de Souza, bioelectricity manager at UNICA. It is estimated that the sugar-energy sector will have to receive around R $ 500 million of this debt.

Agenda for the bioelectricity sector for the year 2021 includes: advancing the project to modernize the Electric Sector in Congress; debt agreement on hydrological risk with first payments scheduled for April; expansion of the free market to include free consumers with a demand of more than 1,500 kW (currently, 2,000 kW is required); and opportunities to sell new bioelectricity and biogas projects in four new energy auctions.

Donations during the pandemic 

Alcohol 70 has become an essential input in combating the spread of the coronavirus. With the start of the pandemic, companies associated with UNICA agreed to donate 1 million liters to contribute to the supply of public health units, free of charge. Nine states received donations: Ceará, Bahia, Tocantins, São Paulo, Rio de Janeiro, Rio Grande do Sul, Espírito Santo, Paraná and Santa Catarina.

"The donation of large volumes to the state departments is just one action among countless ones developed by the associated companies in the municipalities and states where the production units are located", explains Evandro Gussi, president of UNICA. "To keep the population supplied with essential products, ethanol, sugar, bioelectricity and alcohol for asepsis, the sector has adopted strict health and safety rules to guarantee the health of employees", he adds.

A donation of 332 thousand liters of 70% alcohol was also made for use during this year's elections, in a partnership with the Superior Electoral Court (TSE). The input was intended for the manufacture of alcohol gel for voters and the disinfection of surfaces.