NexSteppe Starts To Supply Sorghum For Biogas In Brazil
NexSteppe believes they have the potential to generate 23 billion cubic meters of biogas in Brazil and bets on sorghum as raw material for fuel in agriculture.
NexSteppe, headquartered in the United States, will start to sell and supply sorghum seeds to produce biogas in Brazil with the 2016/2017 crop. The company’s executives say they don’t have an estimate of how much will be planted this season, but they guarantee they already have at least three customers: two plants and one farm in the states of Minas Gerais, Mato Grosso and Bahia.
“Brazil has extensive land for agriculture and a great opportunity to produce biomass”, says Anna Rath, NexSteppe Global CEO. She visited Brazil recently, and attended events on renewable energy and the potential for biogas. She also talked to Globo Rural’s reporters at a hotel located in the Avenida Paulista region, in São Paulo.
Biogas is mainly composed of methane and carbon dioxide. It can be used to generate energy and to replace natural gas that comes from oil. In the field, one other common way of generation is through animal waste. It can also be produced from other waste from agriculture, such as straw and plant bagasse.
NexSteppe bets on sorghum hybrids with specific aptitude for fuel, which is generated from a process known as anaerobic digestion. Sorghum biomass is placed in a piece of equipment called a digestor, where it is mixed with bacteria that process it, resulting in biogas and other residue.
Tested for at least two weeks, the cultivars were developed at the company’s facilities for improvement, located in the state of Goiás, where they conduct studies for tropical climate. One cultivar is already registered and the other is in the process of being registered in the Brazilian market. The seeds are sold in 20-kilo bags.
The promise is for fast growth (around four months), high dry material yield per hectare and volume of biomass. The average productivity rate, according to the company, is 7,800 tons of methane with the harvest of one hectare.
“Depending on the time of the year and the region in Brazil where they are planted, there are varieties that can be used in the summer cycle and also in the second crop, right after planting soy bean,” assures Anna Rath, without detailing the amounts invested in research and development for biogas seeds.
(Source: CCEE – Overall Market Data: Biomass. Ref: July 2016)
For sorghum, the company aims at one of the least representative segments in biomass energy in the Brazilian market. To put this into context, in July this year the thermoelectric power plants using several sources generated 3,998 average Megawatts (see table). Agroindustry biogas ranked ninth, representing less than 0.5% share according to data from the Electric Energy Trade Chamber (Câmara de Comercialização de Energia Elétrica – CCEE). The largest from fuel comes from urban waste, fourth on the list with 0.77% share, behind sugar cane bagasse, highly dominant with (94.29%), black liquor (a pulp & paper mill by-product) and forestry waste (respectively at 3.09% and 0.85%).
The expectation is to see growth in the use of sources such as biogas. NexSteppe estimates that there is potential to produce 23 billion cubic meters of fuel. From this volume, 12 billion could come from the sugar and ethanol industry, where, for example, sorghum is planted to supplement crops in Canada.
“Biogas is growing significantly around the world. In Brazil, that is still at a less advanced stage. However, despite all difficulties, it’s a place we are looking at and it is on the top of the list,” says Anna, remembering the political and economic problems the country went through.
Ethanol and Petrobras
NexSteppe also supplies sorghum for ethanol, and believes in a positive scenario for the industry. The company’s CEO states that the Brazilian bioenergy industry is recovering, due to better sugar prices and government measures that had a positive effect on the fuel market.
“Everything is coming together so the sugar and ethanol industry can recover in Brazil. Now we need to have a more confident and optimistic view for the future,” says Anna Rath.
The vice-president for market development in Latin America, Ricardo Blandy, says that right now a larger percentage of sugar cane is directed towards producing sugar. For him, this can have positive effects on the demand for sorghum to produce ethanol.
He believes that Petrobras’ decision to stop producing biofuels, should also have a positive effect. “In my opinion, Petrobrás is not a very fair competitor, because they also own distribution. Moreover, the market will become freer as Petrobrás’ share will return to the industry. The positive effects for the industry will also reflect on those who supply raw material,” states Blandy.
Mergers and acquisitions
Defining NexSteppe as a “small company” more than once during the interview, Anna Rath doesn’t show concern when asked about the current movement towards the consolidation among major players in chemicals and seeds. As the case with Syngenta and ChemChina, and more recently, Bayer and Monsanto.
She believes that, at first, companies will dedicate more time to adjust production processes. In doing so, they should take solution development to the low priority.
“While they merge and decide what to do with their business after that, these companies neglect little opportunities, which we certainly take into consideration,” she says.
WRITTEN BY RAPHAEL SALOMÃO, FROM SÃO PAULO (SP)