GuySuCo’s Current Position on Ethanol Production as an Alternative to Sugar Production

The Guyana Sugar Corporation Inc. (GuySuCo) would like to provide some information which it is hoped would add to the current debate on ethanol production as a viable business activity for the Corporation.

Ethanol production as an alternative to sugar production has stimulated considerable interest in the recent months. The outstanding example of a sugarcane to ethanol industry is Brazil that has developed an internal market for hydrated and fuel grade ethanol for its motor vehicle fleet, most of which are made in Brazil. Brazilian factories for the most part will produce both sugar and ethanol and can shift production volumes to either product depending on market prices or demand. The ethanol product can be either “hydrated” or anhydrous. Hydrated ethanol is 96% ethyl alcohol that is used in ethanol burning vehicles for which production is being phased out, while the “flex” fuel vehicles are becoming increasingly common. Anhydrous ethanol is mixed at up to 22% with gasoline in the common internal combustion engine. The higher ethanol contents are more common in Brazil where that mix is mandated. However, the accepted standard in most countries is for a 10% ethanol content that has the same octane rating as conventional gasoline but has lower CO2 emissions.

Ethanol is produced directly from sugarcane by fermentation of cane juice or from final molasses. The yield of ethanol from cane juice depends on the content of fermentable sugars. It has been noted that a number of ill-informed exponents of ethanol, tend to project the yield of ethanol from sugarcane as 80 to 85 liters per ton of sugarcane, however, this high yield is obtained in the Center- South of Brazil where conditions favour high accumulation of sugars and pol in cane is in excess of 14%. Similar conditions will be found in Australia, and Southern Africa. The sugar cane sugar contents in Guyana are similar to the North East of Brazil where average pol in cane rarely exceeds 11-12%. The yield of ethanol from these canes will not exceed 70 liters per ton of cane. Ethanol production from molasses is of the order of 260 liters per ton.

There have been a number of detailed studies (Davis et al, 2005; Horta and Coviello, 2007; Worthington, 2007; Zabrockis and Coviello, 2009) which were conducted between 2004 to 2009 in the Guyana sugar industry on the feasibility of ethanol. These have all suggested that the most profitable route for ethanol would be from molasses a by-product of sugar production and as such is assigned a nominal value.

Another key factor for consideration to substitute ethanol for sugar is oil.  The selling price of fuel grade ethanol is linked to oil prices. The current price of a Barrel of oil is approximately US$ 45-49, this translates to US$1.16 per gallon at the higher price. The Brazilian Industry has developed a parity index (Horta and Coviello, 2007) to determine the relative advantages of ethanol versus sugar production. This is an important consideration in Brazil where the ability to vary the product mix is essential for profitability.

By using the Brazilian Index as a guide, the parity price advantage for fuel ethanol production over sugar at the current World market price of US $0.29/Kg should  require better than US$0.48 per liter or US$ 1.86 per gallon.  An essential point to note is that the feasibility of any venture is dependent on the cost of the raw material and unfortunately the present costs of production for sugarcane in Guyana is unfavourable for the production of either sugar or ethanol. Hence, the Corporation’s present emphasis on improving efficiencies and productivity in Agriculture.

Given the above considerations, it is clear that should fuel ethanol production emerge as a feasible consideration for GuySuCo, the preferred raw material would continue to be molasses. The annual Molasses production over the past 5 years is approximately 105,000 tons. This includes the output from all Estates. GuySuCo currently has commitments to supply 40,000 to 60,000 tons of molasses to one of its customers. This could suggest that 45,000 tons of molasses could be available for fuel ethanol and this quantity of molasses would only produce 11.7 million liters of fuel ethanol.

Finally, there have been claims that the Chief Executive stopped the production of ethanol at the Albion Estate in 2015. We would like to point out that this information is inaccurate and misleading, as a matter of fact, the bio-ethanol plant has been operating continuously during the cropping period on that estate. It is also important to note that the bio-ethanol plant at the Albion Estate is a demonstration plant and not a commercial producer.

References:  

Davis, H; Stuart, L and Bhim, P (2005) – Potential for Fuel Ethanol in the Guyana Sugar Industry. Proceedings ISSCT. 25th Congress, Guatemala.

Horta, L N and Coviello M (2007)- Biofuels Potential in Guyana. Economic Commission for Latin America and the Caribbean (ECLAC) Report

Worthington, P (2007)- Alcohol Feasibility Study – Presentation to the Guysuco Board on behalf of Booker-Tate.

Zabrockis, E A and Coviello M (2009)- Design and Feasibility Study of an Ethanol Distillery in Guyana. ECLAC

Yours faithfully,

Audreyanna Thomas

Senior Communications Officer

Communications Department

Guyana Sugar Corporation Inc. (GuySuCo)

Head Office

La Bonne Intention Estate, LBI, East Coast, Demerara   

Tel. Nos. 592-220-2891-4, 613-9404 or 624-0207 (Mobile nos.)

Fax: 592-220-2694

Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Website: www.guysuco.com

11 August, 2017

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    The Guyana Sugar Corporation Inc. (GuySuCo) wishes to inform members of the public that a meeting was held today between the Acting President and Prime Minister, Hon. Moses Nagamootoo, Minister of Agriculture, Hon. Noel Holder, Chairman of the Board of Directors, Prof. Clive Thomas and Chief Executive Officer, Errol Hanoman, to discuss urgent cash flow relative to wages, salaries and other payments at GuySuCo.

    It was agreed at the meeting that as a matter of urgency, a presentation will be made at the Cabinet meeting scheduled for tomorrow Tuesday 19 September, 2017.

    Further, the meeting agreed on steps to be taken to ensure that employees are paid for services provided to the Corporation for the past week.

    The Chairman and the Chief Executive Officer were given assurances that the matter is being given the utmost consideration by the Government and the Corporation now awaits the response from Cabinet after the meeting tomorrow.

    The Chairman wishes to assure employees, their families and communities, that every effort will be made to resolve this matter very shortly.

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