Brazilian Ethanol Sector Ready to Increase Gasoline Blend: “The Timing is Right”

A potential confirmation of the Brazilian government's intention to increase the anhydrous ethanol blend in gasoline from 30% to 32% in the first half of this year would come at an opportune moment for the ethanol sector, which is on track for record production. Although the 2026/27 sugarcane harvest in Brazil's Center-South region began earlier this month, the industry would have time to adjust its raw material mix—also used for sugar—to produce even larger volumes of biofuel, according to sector associations and specialists. This assessment follows Minister of Mines and Energy, Alexandre Silveira's, statement this week that the government aims to raise the ethanol blend in gasoline to 32% by the first half of the year. The announcement comes as Brazil faces challenges in the petroleum-derived fuel sector due to rising prices stemming from the conflict in Iran. “It’s a great time for this decision because we are at the beginning of the harvest. Mills are in the initial phase of defining their production mix,” said Mauricio Muruci, a sugar and ethanol analyst at Safras & Mercado consultancy, commenting on the minister’s declaration. An increase in the ethanol blend in gasoline is expected to boost the percentage of sugarcane processed for biofuel production in Brazil. Consequently, the consultancy estimates that the mix for ethanol would climb to 54%, one point higher than the forecast before the minister's announcement, compared to 51% in the previous harvest.