Parked biofuel, a ditch for investment

Ecuadornews:

In the new inertia of seeking resources or adjusting expenditures where possible, the sugarcane sector comes out to remind the government that the project to boost biofuels to save on imported gasoline has been halfway through. With Rafael Correa as president, the sugar industry was forced to incorporate in its production line, apart from sugar and ethyl alcohol that is used for human consumption, the anhydrous.

It was then incorporated 5% of that type of alcohol, also called ethanol, to extra gasoline creating the new ecopais, which required 17% less imported fuels, since ethanol has a high octane rating and compensated for the low gasoline national base. According to Gustavo Heinert, director of the Association of Alcohol Producers of Ecuador, with that, the country has saved an accumulated balance of 1,657 million dollars since 2012. What compensates that gasoline ecopaís, the most consumed in the territory, is also the one that receives the most subsidies from the State.

The problem that worries the union now is the uncertainty. With the change of government and the economic crisis, Ecuador stopped investing in the necessary infrastructure to expand the assortment of ecopais to all the gas stations in the country. The project stayed at 49% and there it continues, despite the fact that the plans dated in May of this year so that the eco-pais had expanded throughout the territory.

This indecision of the new Government reached the ears of investors who have not injected large amounts of capital into the sector. Heinert says that almost 457 million dollars of investment in a kind of limbo awaiting clarification of the government’s strategy. Among these, the installation of a new mill for 360 million dollars was expected.

Uncertainty has been aggravated by legal uncertainty, insists the director of the union, if the Government no longer guarantees the same price per liter of anhydrous alcohol that was agreed upon when starting the business. So far, the sugar-alcohol industries that produce the ethanol that Petroecuador incorporates to ecopais received 76 cents per liter, if the origin was a company already established in the country; or 90 cents, if a new company arrived with fresh resources to inject into the economy. If the agreement on the renewal of contracts is not respected, the national biofuel business is in question.

Augusto Ayala, administrative manager of the San Carlos sugar mill, adds an international component to realize that the perception that a sugar mill is a successful and almighty giant does not fit the current reality. “The mills are in a delicate situation worldwide. On the one hand, because of the general and national economic reality, but also because in recent years there has been an overproduction in the world, generating surplus sugar that has pushed the price of the commodity to the lowest of the last 15 years, “says the executive.

Hence the interest in delving into the new side of the business through the biofuel obtained from sugarcane. If not, Heinert has a plan b: focus the production of alcohol towards ethyl, with which cosmetics or liquors are made, and aim at export. “It’s something we do not want to do, because biofuel can be an opportunity in the national economy.”

Data

Ecopais

When extra gasoline incorporated 5% ethanol or anhydrous alcohol, extracted from sugar cane with a high octane rating of 116, the imported gasoline component could be reduced by 17% to 48%. The rest is national, with 47%.

Prices

The State established two prices per liter of ethanol to buy from the distilleries. 76 cents for investments already made and 90 cents for new ones.

Uncertainty

The sector assures that there is $ 500 million without investing due to the indecision of the Government.

The biofuel, in three phases

Six months of sugar production

On a visit to the San Carlos sugar mill, one hour from Guayaquil, EXPRESO went through the process of converting sugarcane into sugar and alcohol, which is used for liqueurs and cosmetics or for biofuels. Because of the national climate, the harvest only produces six months.

From cane to sugar or gasoline

The same raw material, sugarcane, allows to obtain sugar bags after a milling process, rinsing cane juice, water evaporation and crystallization. The same cane juice that is obtained when milling the cane nourishes the distilleries to make alcohol.

Piece distillation and storage

As if it were an oil refinery, the Soderal distillery extracts ethyl alcohol (for human consumption) or anhydrous alcohol (for biofuel) from the cane juice or molasses that remains after sugar production. The juice of cane allows to produce more volume of ethanol for gasoline. (I)

Source: https://www.expreso.ec/economia/biocumbustible-economia-inversion-gobierno-gasolina-JF2340469