Brazil is considering increasing the ethanol blending rate in petrol from 30 per cent to 32 per cent in the first half of the year, as rising global oil prices push the government to expand the use of domestic biofuels.
The proposed move is expected to lift demand for ethanol and divert more sugarcane towards fuel production. Industry estimates indicate that the share of cane used for ethanol could rise to around 54 per cent, compared to 51 per cent in the previous season, American AG Network reported.
Market experts said the timing of the proposal coincides with the start of the harvesting season, when mills decide how to split sugarcane between sugar and ethanol.
Mauricio Muruci of Safras & Mercado said current market conditions favour such a decision, as mills are still finalising their production plans.
With a higher share of cane expected to be used for ethanol, along with steady growth in corn-based ethanol, Brazil’s total ethanol output is projected to reach between 44 billion and 44.5 billion litres, marking a record and an increase of about 15 per cent over the previous season.
The proposal reflects Brazil’s broader strategy to cut dependence on fossil fuels while supporting its large sugarcane-based ethanol sector.
