Guillermo del Bosque Macías
Director General of Natural Fibers and Biofuels
SAGARPA
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View from the Top

Fostering Bioenergy for Rural Development

Wed, 02/19/2014 - 08:53

Q: What are the different opportunities that bioenergy could bring to the development of rural Mexico?

A: The potential to diversify income in rural areas through an investment in bioenergy is huge. The first program under consideration is replacing MTBE, the oxygenate used in PEMEX’s gasoline, with ethanol as MTBE is prohibited in most of the US and in the European Union. Guadalajara, Mexico City and Monterrey would require 810 million liters of ethanol per year, which would require the development of six bio-refinery plants, with an investment of about US$1 billion, considering that each plant costs about US$150 million, plus other costs. This project would generate about 22,000 permanent jobs.

Q: What can SAGARPA do to promote an alliance between PEMEX and biofuel producers to create a viable market?

A: In past tender processes, PEMEX acted in ways that halted the profitability of biofuel projects. Today, PEMEX is willing to make the necessary steps to launch tenders in different parts of the country. We are trying to determine what volumes PEMEX will require in order to adapt the investment in biofuel capacity to expected market demand.

Q: What are the main advantages and disadvantages of the prohibition to produce biofuels from corn?

A: The law is very clear, as legislation was put in place to protect the food supply for people. Biofuels cannot compete with food, which is why the use of corn to produce ethanol is prohibited. As a country, Mexico is self-reliant for human consumption. Our consumption of white corn does not exceed 7 million tonnes and we are producing more than 13 million tonnes. We are importing yellow corn but this is not used to feed people. None of the biofuel projects that supply PEMEX are based on corn; they always use other types of crops. The competition with food is relative because we have already proved that when you use a tonne of corn to produce ethanol, you get about 330kg of distilled grains (ddgs). The protein value of those 330kg is the same as the protein value of the whole tonne of corn. This is then used for food production for cattle, so the agro-processing chain is not affected. When the ethanol industry developed in the US, Mexico was importing 100,000 tonnes of ddgs, but we are now importing around 2 million tonnes. Although we are not affecting the chain, this remains a controversial topic.

Q: How can Brazil’s bionenergy model be replicated in Mexico?

A: Apart from Brazil’s goal to be self-reliant in terms of energy, it looked for rural development opportunities. In Mexico, the first goal has to be rural development as this sector has not received the recognition it deserves. If the bioenergy sector is developed in Mexico, this would provide an alternative source of economic development in rural areas.

Q: Is it possible to promote alliances between small producers in order to enable them to sell to PEMEX?

A: This type of project requires the creation of a biofuel producers association. Independent producers do not have the capacity or the land to do this, they have to be associated.