Oil’s Plunge Is an Existential Threat to a Far Cleaner Biofuel
Cheap gasoline may kill margins for corn-ethanol production in Brazil, a key global supplier of the alternative, cleaner-burning fuel
A worker collects corn grain on a truck at a farm in Rosario, Bahia state, Brazil, on Wednesday, May 9, 2018.
Photographer: Dado Galdieri/BloombergIt withstood a downward currency spiral, economic malaise, a jump in raw-material costs and political upheaval. Now one of Brazil’s booming industries has finally met the foe that could take it down: the oil crash.
The spectacular plunge in the crude market is sparking unprecedented reverberations across commodities and economies, with Brazil’s corn-ethanol producers standing out as a concentration of the pain.
It goes to show how the unraveling in the oil market is threatening production of cleaner, renewable energy. As gasoline tumbles, ethanol is under pressure. The two compete directly at the pump in Brazil, where most drivers have flex-fuel cars, which can run on either.