Brazil has approved its first ethanol plant based on wheat, marking a significant move to diversify raw materials used in the country’s biofuel sector. The Brazilian National Agency for Petroleum, Natural Gas and Biofuels (ANP) has granted permission for the project, which is located in Santiago municipality in Rio Grande do Sul state.
The plant, set up in one of Brazil’s key grain-producing regions, will initially process about 100 tonnes of wheat per day. In its first phase, the facility is expected to produce up to 12 million litres of hydrated ethanol annually.
Construction of the plant involved an investment of around US$18.6 million, signalling growing private-sector confidence in cereal-based ethanol production. The project has been designed for future expansion, with plans to raise annual capacity to between 45 million and 50 million litres by 2027. This expansion could require additional investment of nearly US$93 million, which would make it one of the larger grain-based ethanol facilities in southern Brazil.
The project received a key boost after securing a state operating licence from the Rio Grande do Sul government in November last year. State-level regulatory approval was crucial, as wheat has not previously been used for fuel ethanol production on an industrial scale in Brazil.
Traditionally, Brazil’s ethanol industry has relied heavily on sugarcane, while corn-based ethanol has gained ground over the past decade. The introduction of wheat as a feedstock further broadens the country’s biofuel base. For Rio Grande do Sul, one of Brazil’s leading wheat-producing states, the new plant could create an additional market for domestic wheat, particularly during years of surplus supply or weak prices in food and feed markets.
According to Brasil 247, financing for Brazil’s biofuel sector has reached record levels. In 2025, the Brazilian Development Bank (BNDES) approved about US$1.1 billion in loans for bioenergy projects—the highest since 2010. Priority funding areas include ethanol production from corn and wheat, as well as biomethane projects, highlighting Brazil’s push to expand renewable energy while supporting agricultural demand.
