Inside Brazil’s Fastest-Growing Ethanol Market: Mato Grosso’s Billion-Liter Leap

Brazil's Mato Grosso state is poised for a significant surge in ethanol production, with projections indicating a 16% increase to 8.44 billion liters in the 2026/27 harvest. This expansion is primarily driven by the growth of corn ethanol and the establishment of new industrial plants within the state, according to a forecast by the Mato Grosso Bioenergy Industry Union (Bioind-MT) and the Mato Grosso Institute of Agricultural Economics (Imea).

The anticipated growth follows a robust 2025/26 season, which saw the state's ethanol output rise by 8.52% to 7.27 billion liters, while national production remained largely stable with a modest 0.22% increase. Mato Grosso currently holds the second position in Brazil's ethanol production ranking, trailing only São Paulo.

Corn ethanol is expected to be the main catalyst for the 2026/27 expansion, with production from the cereal projected to climb by 18.67% to 7.33 billion liters. Sugarcane ethanol, by contrast, is set for a more moderate increase of 1.42%, reaching 1.11 billion liters. Silvio Rangel, president of Bioind-MT and the Federation of Industries of Mato Grosso (Fiemt), highlighted the state's dominance in corn ethanol, noting that Mato Grosso accounts for 62% of national cereal ethanol production.

Wellington Andrade, executive director of Bioind-MT, attributed this growth to both the expanded capacity of existing facilities and the inauguration of new industrial units. He cited approved financing for ALD Bioenergia and RRP Energia, Inpasa's plant expansion, and new projects from 3tentos and Evermat as key drivers.

The Imea survey also forecasts an 18.52% increase in corn milling for ethanol production, rising from 13.81 million tonnes in 2025/26 to 16.36 million tonnes in 2026/27. By-products of corn ethanol are also expected to see double-digit growth, with DDG and DDGS production increasing by 16.14% to 3.41 million tonnes, and corn oil by 12.9% to 338,900 tonnes. In the sugarcane sector, milling is projected to remain stable at 18.61 million tonnes, while sugar production is expected to decline by 1.42% to 579,700 tonnes.

Long-term projections from Imea suggest continued bioenergy expansion in Mato Grosso, with the state potentially reaching 15.02 billion liters of ethanol production by the 2033/34 harvest, more than double the 2025/26 estimate.

In related developments, Bosch is piloting a technology that combines diesel and ethanol in sugarcane harvester engines. This retrofit system aims to replace up to 60% of fossil fuel use without compromising engine power. The solution, initially developed for large mining trucks, is currently being tested in six sugarcane mills across Brazil. Matheus Pintor, commercial head of Bosch's dual-fuel division, emphasized the economic rationale behind the retrofit, stating that it accelerates decarbonization by utilizing existing machinery rather than waiting for fleet replacement, which can take years.

Meanwhile, Atvos, a Brazilian clean energy company, is advancing its second corn ethanol project in Mato Grosso do Sul. The company has committed to paying R$3.284 million in environmental compensation for a new industrial unit in Costa Rica, with an estimated investment of R$669 million and a production capacity of 150 million to 800 million liters. This new unit will be integrated into Atvos' existing sugarcane ethanol plant in the municipality. The company also announced a similar project near the Santa Luzia plant in Nova Alvorada do Sul, with an investment exceeding R$1 billion, aiming to integrate sugarcane and corn operations and use sugarcane bagasse for energy generation.

Mato Grosso do Sul's corn ethanol industrial park currently operates with three units (two from Inpasa and one from Neomille) and is set for further expansion. Planned projects include an expansion of Inpasa's Sidrolândia plant by 300 million liters and a new plant in Jaraguari with an estimated capacity of 200 million liters per year. The state, a national leader in DDG production, saw approximately 1.40 million tonnes produced last year, with 1.15 million tonnes exported to countries like New Zealand, Turkey, Vietnam, and Spain.

Brazil Bets Big on Biomethane: Atvos Plans 7 New Plants to Slash Diesel Use by 88%

Brazilian energy company Atvos announced ambitious plans to construct seven new biomethane production plants across the country, which will enable the company to expand its renewable fuel portfolio while decreasing diesel consumption. The initiative shows Brazil's increasing dedication to energy transition which occurs during unpredictable international market conditions.

The first of these facilities, located in Mato Grosso do Sul, has already commenced industrial operations. The facility will create about 28 million cubic meters of biomethane during each harvest period by processing sugarcane waste. Atvos will use this renewable fuel to operate its own fleet which aims to achieve 100 percent diesel replacement for all operations within the next few years. Atvos will achieve production capabilities of 137 million cubic meters through the seven plants, which will result in more than 88 percent reduction of diesel emissions.

Governor Eduardo Riedel of Mato Grosso do Sul highlighted the project's alignment with the state's decarbonization and sustainable development strategies. Secretary Jaime Verruck emphasized biomethane's importance to the state's bioenergy policy and its 2030 carbon-neutral target. The project involved an investment exceeding R$350 million in Nova Alvorada do Sul, which serves as a critical milestone for diversifying the state's energy sources while boosting the competitiveness of its sugar-energy industry.

The Brazilian agricultural sector undergoes its second major advancement after biomethane expansion. The global cotton market is experiencing pressure from commodity price fluctuations which result in higher demand for less expensive synthetic fibers. An executive from Abra stated that global logistics systems face operational disruptions because the Strait of Hormuz remains blocked which adds to production expenses and creates medium-term price declines for cotton.

The results from commodity markets displayed different performance patterns. Chicago corn prices increased by 0.4% to reach $4.70 per bushel for the May contract because of rising oil prices. The price of corn has increased by 8.26% during the last month. The New York exchange experienced a 0.7% decline in raw sugar prices while cocoa registered a 0.3% increase. The rising oil prices will shift Brazilian sugarcane production toward ethanol production which will decrease global sugar availability. Brazil will produce approximately 4 billion liters more of ethanol during the 2026/2027 harvest which will create a new record for the country which holds the title of largest sugarcane producer: 36,66 billion liters.

The National Monetary Council approved a R$7.4 billion allocation for FUNCAF in 2026 which will support coffee supply chain processes from cultivation to commercialization and damaged crop recovery. The national budget already includes this funding. A court in Paraná confirmed its earlier decision which prevents Bela Agrícola from merging its R$2.2 billion unsecured debts into one extrajudicial recovery plan. The Chinese-controlled group needs to modify its approach.