Brazil’s corn ethanol expansion still has plenty of room to run, industry executives said, pointing to growing demand from sectors beyond road transportation as the next leg of growth for the biofuel.
Speaking at AGRO360, an event hosted by The AgriBiz and Brazil Journal, executives from FS, 3tentos and Vibra argued that ethanol is becoming increasingly attractive as countries seek lower-carbon fuels while grappling with energy security concerns and volatile fossil fuel markets.
“It’s a molecule that has repeatedly proven its versatility across different applications,” said Rafael Abud, CEO of FS.
While road transport remains ethanol’s largest market, executives expect demand to expand into shipping, sustainable aviation fuel (SAF), industrial applications and thermal power generation.
“If only part of those markets develops, it will support a long cycle of investment in new production capacity,” Abud said.
The optimistic long-term outlook comes despite a tougher environment this season. Corn ethanol producers are facing lower margins amid a supply glut, making scale and operational efficiency increasingly important.
“To preserve margins today, you need scale, logistics access, strong grain origination and efficient commercialization of co-products such as DDGs and corn oil,” Abud said.
Local Consumption
In the near term, executives see higher consumption of hydrous ethanol as a key outlet for excess supply, particularly in northern and northeastern Brazil, where usage remains relatively low.
Tax distortions and consumer habits remain barriers to wider adoption, according to FS and 3tentos.
Distribution is also part of the equation. Vibra has been using coastal shipping and the Northern Arc logistics corridor to integrate ethanol flows with existing petroleum-product routes, helping lower transportation costs and expand access to biofuels in underserved regions.
“Biofuels fit naturally into the infrastructure we already use for liquid fuels,” said Tomás Cardoso, Vibra’s supply chain and trading director. “The same transport modes, storage facilities and logistics networks can be used for both.”
SAF, the Next Major Growth Driver
Among the most promising opportunities is sustainable aviation fuel, as airlines face mounting pressure to cut emissions.
Brazil is particularly well positioned, executives said, because of its expanding supply of lower-carbon corn ethanol produced from the country’s second corn crop.
Summit Agricultural Group, the U.S. shareholder that controls FS, recently announced plans to invest $2 billion in a large-scale SAF plant in Paulínia municipality, in São Paulo state.
Abud said regulatory demand for SAF could outpace supply by the end of the decade. Today, SAF is produced primarily from vegetable oils, a feedstock with limited availability.
“Ethanol can provide the scale this market needs, and Brazil is the most competitive place to produce it,” he said.
FS will supply low-carbon ethanol to JetBio, Summit’s SAF venture, which also plans to source sugarcane, second-generation and wheat ethanol.
Several ethanol-based SAF projects are expected to begin operating by 2030, Abud said, though regulatory uncertainty remains a challenge globally.
In Brazil, a recent legislation introduced aviation decarbonization targets starting in 2027, initially requiring a 1% reduction in emissions.
Vibra has been preparing for that transition since 2024, becoming the first fuel distributor certified under ISCC CORSIA, the sustainability framework recognized by the International Civil Aviation Organization.
The company imported Brazil’s first SAF cargo in 2025 and has since been supplying two daily flights in Bahia with fuel containing a 10% SAF blend.
“We’ve been learning how the logistics work, how blending is done and how to safely deliver the product to customers,” Cardoso said. “Now the focus is understanding how the 2027 mandate will ultimately be regulated.”
