Brazil has announced plans to increase the ethanol blend in gasoline from 25 percent to 27 percent, effective March 16. The increase was announced by government officials on March 4.

"This is an operation in which everyone wins: the producer wins, wins the market, the power supply system in Brazil, and also get our production network," said Eduardo Braga, minister of Mines and Energy, in a statement.

According to information released by the Brazil Ministry of Mines and Energy, Petrobras was asked in 2014 to evaluate the impacts of increasing the ethanol blend level. Tests conducted by Petrobras’ research center did not show any technical problems arising from the use of 27.5 percent anhydrous ethanol. Information released by the ministry indicates the federal government, motor vehicle manufacturers, motorcycle manufacturers and ethanol producers participated in a working group formed as part of the evaluation.

A statement published by UNICA, the Brazilian sugarcane industry association, called the government’s announcement a positive decision.  "After more than a year of discussions and hard work to reach this decision, increasing the ethanol blend brings benefits to the sector and shows that the government sees that ethanol is important in the energy mix," said Elizabeth Farina, president of UNICA.

UNICA said the increased blend level should increase demand for anhydrous ethanol approximately 1 billion liters (264.17 million gallons). In its statement, UNICA also said the sugarcane industry has passed through the greatest crisis in its history and is prepared to meet the increased blend level. According to UNICA, current inventory levels and production capacity can meet the resulting increased demand.

The most recent biweekly report published by UNICA shows that total ethanol production in the south-central region for the 2014-’15 season was 26.08 billion liters through Feb. 16, up 2.18 percent from the prior season. That volume included 15.2 billion liters of hydrous ethanol, a 4.98 percent increase, and 10.88 billion liters of anhydrous ethanol, a 1.49 percent decrease.  

The most recent monthly ethanol import and export data published by the U.S. Energy Information Administration shows the U.S. imported 285,000 barrels of ethanol from Brazil in December, with 25,000 barrels imported in November. The U.S. exported 414,000 barrels of ethanol to Brazil in December, down slightly from the 405,000 barrels exported in November.