The ethanol market in Brazil remains under pressure after five years of nearly frozen petrol prices. Since biofuel production costs kept rising, its pump prices have been far from competitive for two years.

However, BP Biofuels (a subsidiary of the BP oil company) has decided to pour in US$345m at Usina Tropical in Edeia, state of Goiás in the country’s mid-west. The move will create 7,600 direct and indirect jobs by 2014 when production at the refurbished distillery will top 500m litres/110m imperial gallons yearly.

Investments, besides an output increase, will deliver more flexible ethanol and sugar production. The split may be 60%-40% for either product according to respective price competitiveness, as opposed to the usual 55%-45% seen here.

BP Biofuels has also announced that electric power cogeneration at Tropical (fuelled by waste, crushed sugar cane bagasse) will improve.  Up to now there was no such surplus for it was all used up in their own industrial activity.

Once the process is completed, 340 GWh will be sold to the national, interlinked power network.

Only sugar cane ethanol has the ability to reduce up to 90% of exhaust pipe CO2 emissions, according to Brazilian and foreign scientists.