By Roberto Samora
SAO PAULO (Reuters) - The Brazilian state of Mato Grosso is investigating whether corn ethanol plants are burning wood from illegal deforestation to produce the biofuel, running counter to decarbonization goals in the sector, prosecutor Ana Luiza Peterlini told Reuters.
Mato Grosso is Brazil's top soybean producer and accounts for two-thirds of the country's corn ethanol output, which has exploded in recent years. The investigation by state prosecutors seeks to determine if plants are illegally burning native wood to generate energy in the production process, Peterlini said.
While processing plants should use planted trees to fuel boilers, some are burning native wood at about half the price, according to a complaint sent to prosecutors.
"I will investigate, for sure. The hypothesis that these companies are using raw material from deforestation already goes against the industry's own logic," Peterlini said, referring to the lower carbon footprint of the renewable fuel.
TOP EMISSIONS SOURCE
Brazil has been a leader in biofuels adoption, but deforestation is the largest source of greenhouse gas emissions in the country, which hosts the next United Nations climate summit in November.
The government touted an 11% drop in deforestation of the Amazon rainforest in the 12 months through July. Still, 5,796 square kilometers of the jungle were destroyed in the period.
Prosecutors will question Mato Grosso environmental agency Sema about a 2022 rule that allows the use of native biomass in industry, which could be at odds with the federal forest code, Peterlini said.
If confirmed, Peterlini would recommend revoking the rule, she said, citing the difficulty of tracking the origin of wood burned in boilers.
The Mato Grosso Reforesters Association (Arefloresta) says more than half of the wood used in corn ethanol production comes from the felling of native trees.
"Today, more than 50% of the wood consumed in the corn ethanol sector is native," Arefloresta President Clair Bariviera told Reuters.
Illegal wood is significantly cheaper, Bariviera said, at around half the price of planted eucalyptus.
EUCALYPTUS SHORTAGE
Ten corn ethanol plants currently operate in Mato Grosso and regulator ANP has given the greenlight to build seven more, according to the National Corn Ethanol Union (Unem), which said eight more plants are in the planning phase.
According to Arefloresta 30,000 hectares of planted eucalyptus forests would be needed to fuel a projected 13.5 million metric tons of corn milled for ethanol in 2025/26, if that were the only wood burned in the boilers.
While some 140,000 hectares of eucalyptus are planted statewide, the sector provides wood burning from just 15,000 hectares each year, with most of the trees harvested for the paper industry. Supply is tight, Bariviera said, because planted forests take six to seven years to mature.
"I've been president of the association for three years, and we've been fighting to plant forests in the state, saying biomass will run short — and it will," Bariviera said.
Unem declined to comment on biomass supply or the issues raised in prosecutors' pending investigation. Sema did not immediately respond to a request for comment.
Brazil's top corn ethanol producer Inpasa, which has two plants in Mato Grosso, said it strictly follows Brazilian law and its biomass meets the highest compliance standards
FS, which has three plants in Mato Grosso, said it has 87,000 hectares of planted forests, including eucalyptus and bamboo, adding that these assets were developed over the past eight years and can supply all operations and expansion plans.
(Reporting by Roberto Samora; Writing by Oliver Griffin; Editing by Brad Haynes and Chizu Nomiyama )
