Brazil’s ethanol producers push back on EVs

Brazil's ethanol industry is working with the automotive industry to develop hybrid and hydrogen fuel-cell cars that run on the biofuel, bucking a global trend toward plug-in electric vehicles.

"There's a lot of talk about electric cars – they have good marketing," says Andre Rocha, president of Goias state ethanol industry association Sifaeg. "But we need to redirect these discussions because ethanol is the future."

Brazilian ethanol experts say plug-in EVs in the US and EU are often charged with fossil fuel-based power generation such as coal, and emissions are higher.

According to European data, the average EV produces 92 grams of CO2/km, says Plinio Nastari, founder of agricultural analysis group Datagro. "And we are not even talking about the mining, production and disposal of batteries or the additional infrastructure needed for building charging stations."

In comparison, current flex-fuel combustion engines widely used in Brazil using hydrous ethanol produce 58g/km of CO2. Even if the car is fueled with gasoline blended with only 27pc anhydrous ethanol, emissions are still lower than an EV at 87g/km, Nastari said.

Toyota is already producing Corolla and Corolla Cross models in Brazil with ethanol, non-plug-in hybrid technology. Toyota recently invested R1bn ($178.5mn) to adapt its plant in Sao Paulo state to produce the Corolla Cross.

On average, hybrid engine technology fueled by ethanol produces only 29g/km of CO2, Nastari said.

Brazilian energy and logistics conglomerate Cosan, which controls Brazil's biggest sugar and ethanol milling group Raizen, compared its sugar cane operations to the carbon sequestration of EV leader Tesla.

"In the 11 years of its existence, Tesla has reduced carbon emissions by 3.7mn t of CO2, while Raizen reduced emissions by 5.7mn t in just the last year," Raizen chief executive Ricardo Mussa said.

Even Brazil's EV association ABVE says plug-in-only vehicles are unlikely to gain significant market share in Brazil because of the high cost of electricity and greater potential for hybrid and fuel-cell vehicles that use ethanol.

EV sales in Brazil jumped by 66.5pc year on year in 2020, but the bulk were hybrids. Brazil currently has just 350 EV charging stations, according to ABVE.

Longer term, the ethanol industry is betting on hydrogen fuel cell batteries. Brazil's ethanol industry is working with automakers, including Nissan and Toyota, to launch a first commercial hydrogen fuel cell vehicle soon, with prototypes already undergoing tests to run on ethanol.

"People are confusing electrification of cars with lower CO2 output, and this is false," Nastari said, adding that ethanol can be converted into hydrogen in a fuel cell twice as efficiently as gasoline.

The infrastructure to produce, store and distribute hydrogen is not necessary, he said. "The ethanol is converted in the car's fuel-cell into hydrogen."

With a 30-liter tank, prototype fuel cell-powered cars travel up to 700km, Nastari said.

In a recent study by the government's energy research agency Epe, Brazil would need to invest up to $300bn for a smart grid needed to develop a plug-in EV industry.

Island case The case for ethanol over EVs got a boost last week from the World Wildlife Fund, which recommended the use of ethanol cars over EVs for Fernando de Noronha island, a tourist destination off Brazil's northeastern coast that aims to zero out carbon emissions.

"The cheapest and most viable alternative in the short term is the adoption of biofuels: analyzes have shown that replacing gasoline with ethanol reduces greenhouse gas emissions by 77pc, while the adoption of electric vehicles would reduce emissions by 52pc today," WWF said about the island and other remote areas of the country.

Brazil is among the world's biggest ethanol producers , using cane and increasingly corn to produce 29.8bn liters (514,000 b/d) of ethanol in the 2020-21 season.

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