The Government of Ecuador is undertaking pilot projects to use bioethanol for the city of Guayaquil and jathropha biodiesel for the Galapagos Islands.
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Ecuador Biofuel Industry, Bioethanol, Biodiesel, Production,
Ecuador’s executive branch of government, through President Rafael Correa, has been very keen on speaking up
about the need for a biofuels policy and biofuels programs. However, despite the interest of the private sector as
well, no biofuels policy exists at the moment. The Government of Ecuador is undertaking pilot projects to use
bioethanol for the city of Guayaquil and jathropha biodiesel for the Galapagos Islands.
Thanks to its geographic location, Ecuador has an advantage in crops such as sugarcane, African palm,
and jathropha that could be used for biofuels and renewable energy. Ecuador’s private sector has shown
a strong interest in investing in biofuels production, mainly in response to high petroleum prices in
recent years, a new Ecuadorian Constitution that mandates a new energy structure, and environmental
concerns associated with the use of fossil fuels. Ecuadorian companies have the raw materials and
capacity to produce bioethanol and biodiesel. At the moment, although the private sector has continued
to express interest, no significant investments have occurred because of an absent regulatory
environment and the prospects of lower petroleum prices in the future.
U.S. government agencies have been working with the Government of Ecuador, as well as with private
firms, in an assessment of the potential of Ecuador’s biofuels sector. Ecuador is participating in the
Energy and Climate Partnership of the Americas (ECPA), a U.S. Government imitative that aims at
assisting countries in the Western Hemisphere to reduce their greenhouse gas emissions and improve
POLICIES AND OVERVIEW OF THE SECTOR
Ecuador’s geographic location and weather give it a natural advantage in agricultural production as
crops can be grown throughout the year and luminosity is constant (12-hour days). Ecuador’s executive
branch of government, through President Rafael Correa, has been very keen on speaking up about the
need of a biofuels policy and programs. However, despite the interest of the private sector as well, no
biofuels policy exists at the moment and pilot projects undertaken by the Government of Ecuador (GOE)
have not been properly executed. A wealth of information has been developed by the private sector that
GOE initiatives could greatly benefit from. Projects undertaken by Ecuador’s private sector using palm
and jathropha oils appear to be promising. Because the development of a biofuels project requires heavy
investments in research and development, some in the private sector have been willing to invest
resources while the public sector has lacked the financial resources as well as the know-how to
successfully produce biofuels.
Coordinating Ministry of Production is responsible for biofuels issues.
In January 2010, the Government of Ecuador launched a pilot program to mix 5 percent of bioethanol in
a fuel blend to be marketed as E5 Ecopaís gasoline in several provinces. The pilot program ended in
December 2011 and became a permanent initiative in January 2012. It was able to produce 160,000
liters per week through 2011 and it 2012 it aims at sourcing 500,000 liters of bioethanol per week.
Ecuador’s biofuels policy fits into a larger policy framework designed to promote the development and
use of renewable energies. For instance, Article 15 of Ecuador’s Constitution says the State shall
promote the use of clean alternative energy with low environmental impact and Article 413 indicates the
State will promote the development and use of renewable energy without threatening food sovereignty.
Although Ecuador’s Constitution encourages the development of renewable energy sources, in reality
there is a lack of specific legislation and regulations for biofuels development and production.
Authorities have focused their efforts on including the topic in several white papers. For example,
Ecuador’s National Energy policy addresses the need to diversify the national energy matrix, noting the
GOE will encourage energy generation from renewable sources and promote research for the use of
alternative renewable energy, especially from geothermal, biomass, wind, and solar sources. In
addition, the National Plan of Good Living and the Agenda for Productivity, Diversification and
Productive Transformation also provide economic incentives, such as tax benefits, to promote the
creation of new firms in the bioenergy and biofuels sectors. The GOE has also identified biomass
energy as an important component in its efforts to diversify Ecuador’s agriculture/industrial base and to
increase the country’s generation of renewable energy.
ECUADOR’S POTENTIAL TO DEVELOP A BIOFUELS INDUSTRY
Due to Ecuador’s natural advantage for agricultural production, both the public and private sectors have
engaged in a series of pilot projects to develop a biofuels industry. In the private sector, a few projects
have culminated in domestically produced biodiesel that has been exported to foreign markets.
According to a USAID study, Ecuador has the potential to dedicate 60.000 ha of sugarcane until the year
2025 for the production of bioethanol with an expected yield of 2 million liters per day. Regarding
biodiesel, about 300,000 ha of African palm could be destined to the production of biodiesel until the
year 2025 with an expected yield of 800,000 MT per year.
Government of Ecuador’s Interest in Developing Biomass-based Energy
There are few projects that the Government of Ecuador has identified as potentially feasible. These
projects are considerably ambitious and require technical expertise which is currently lacking in
Ecuador’s public sector. A summary of the most relevant ones is included below.
National and Local Government’s Projects
Pro Estimated ject Name Provinces Description
Bio National project in cooperation with the Government of Brazil ethanol Ecuadorian Several provinces. First
that seeks to install a plant for 150,000 liters of bioethanol per
Sovereignty Project stage: G 160 million uayaquil, Guayas
Government-sponsored project in pre-feasibility stage for the
Zapotillo Loja 140 million production of 300,000 liters of bioethanol per day in an area of
Provincial Government rovincial government project that seeks to produce 40,000
Sucumbíos 13 M Pillion
of Sucumbios liters of ethanol out of sugarcane planted in 2,500 ha.
There are many sources of biomass fuel available in Ecuador, including biomass derived from the
production of rice, corn and sugarcane. The following table shows some examples of existing biomass
that the GOE has been investigating how to use as fuel:
Biomass Sources in Ecuador
Product Byproducts Percent MT
Ric Husk 22.50 191.250 e
Broken rice 5 42,500
Rice flour 8 68,000
Impurities 1.50 12,750
Milled rice 63 535,500
Cane and cob 68 340,000
Co Impurities 1 5,000 rn
Corn 31 155,000
Tops and leaves 32 176,000
Bagasse 36 198,000
Sugarcane Other residues 11 60,500
Sugar and sugar products 21 115,500
Note: Figures are annual as reported by Ecuador’s Ministry of Agriculture
In addition, the Ecuadorian government through its Ministry of Agriculture (MAGAP) has determined
volume, physical and chemical qualities of the following agricultural products:
Palm Kernel Shell: Palm oil processing plants are located in the area between Santo Domingo de los
Tsáchilas and Quinindé.
Approximate annual volume: 50,000 MT
- Calorific value: 16.8 GJ / kg
- Humidity 12%
- Ash 2%
Wood Chips: Sawmills are located in Quevedo, Los Rios in the coastal region and in the southern
Approximate annual volume: 20,000 MT
- Calorific value: 13.5 GJ / kg
- Humidity 20%
- Ash 0.5%
Rice husk: Rice mills are located in the coastal provinces of Guayas and Los Rios.
Approximate annual volume: 20,000 MT
- Calorific value: 15.0 GJ / kg
- Humidity 20%
- Ash 20%
Sugarcane bagasse: Located in Guayas and Los Rios
Approximate annual volume: 100,000 MT
- Calorific value: 12.0 GJ / kg
- Humidity 10-60%
- Ash 10%
Ecuador’s Private Sector Identified Initiatives to Develop Renewable Energy
Pro vinces Estimated ject Nam Proe Description
ECUANOL Ecuanol promotes the planting of 17,000 ha of which (Ecuadorian Bioethanol) Azuay, 7000 would be sugarcane and sorghum the remaining
Production of bioethanol based on sugar Oro 63.3 million 10,000. It aims to produce 250,000 liters a day in two
cane and sweet sorghum
T Project for the production of bioethanol with 3,900 he alternative energy Yunguilla Valley Azuay 7.1 million hectares of agricultural production and a daily production
of 70,000 liters of bioethanol
In the northern part of Ecuador, Iancen Sugar Mill seeks
to produce 100,000 liters of ethanol per day and co-
Iancen, bioethanol Imbabura 32 million
generate 6 MW. Sugarcane crops needed would be 3000
Proposed planting of 5,000 hectares in the area of El
Zarate Garcia Guayas 70 million Empalme. The project could produce 150,000 to 200,000
liters of bioethanol per day.
Biodiesel from Castor oil plant, Torres M Production of biodiesel made of castor oil plant. It would anabí 4.7 Million
Perez produce 6,000 liters per day in an area of 900 hectares.
BANAENERGY Santa Production of sweet sorghum as raw material for the El 14.27 Million ena production of ethanol, 30,000 liters per day in 1,200 ha
Asociación de Desarrollo Integral Production of 12,000 liters of bioethanol per day from
Imbabura 2.35 Million
Integral 450 ha of sugarcane.
Bio Production of 5,000,000 gallons per year of biodiesel diesel Ecuador Loja 4.9 Million
from castor oil plant and jathropha.
BIOETHANOL AND BIODIESEL
According to MAGAP, in 2011 there were about 78,000 ha planted with sugarcane. Most of the crop is
used for sugar for human consumption. There is an installed capacity to distill 185,000 liters of alcohol
per day, of which slightly more than 20,000 liters per day are used for bioethanol fuel. High sugar prices
are the reason low amounts of sugarcane have been used for bioethanol production.
Ecuador’s Area Planted with Sugarcane
Source: MAGAP’s database and FENAZUCAR
Except for small amounts used by the Government of Ecuador’s pilot project in the city of Guayaquil,
ethanol consumption is negligible.
In January 2010, the Government of Ecuador launched a pilot program to mix 5 percent of bioethanol in
a fuel blend to be marketed as E5 Ecopaís gasoline in several provinces. This would require
approximately 500,000 liters of bioethanol per week. Currently, only about 160,000 liters per week are
The first stage of the pilot project was started in the city of Guayaquil, Guayas province. The goal was to
replace all gasoline sold in Guayaquil with Ecopaís in a period of two years, requiring a supply up to
50,000 liters of anhydrous ethanol per day by 2014 and 1.5 million liters by 2025. The pilot program
ended in December 2011. The program became permanent in January 2012 with the same goals as the
pilot project as the pilot program's goals were not met. The GOE has, however, come up with a price
formula that seems to be more attractive to distilleries judging by their interest in selling bioethanol to
the GOE in 2012. MAGAP, working with Ecuador’s National Planning Secretariat (SENPLADES), has
a project aimed at increasing the area planted with sugarcane to 6,000 ha until 2015. A second project
involves government purchases of artisan-produced alcohol for small producers that would be
commercialized through Ecuador’s national oil company Petrocomercial.
Production: African Palm
The total area planted with African palm in Ecuador is 240,000 hectares, with about 200,000 ha
currently being harvested. Ecuador could potentially plant up to 628,000 ha of African palm, according
to MAGAP. Ecuador’s private sector has the capacity to refine palm oil into biodiesel. This has been
done in the past few years when oil prices reached record highs.
Based on projections from the sector in terms of production, domestic consumption and export surplus
of red oil, the surplus could grow significantly and reach more than 850,000 tons of red oil in 2025. No
biodiesel was produced in Ecuador in 2011.
Ecuador’s Production and Consumption of Palm Oil
Source: U.S. Agency for International Development, Ecuador
Jatropha’s yields are lower than those of African palm, although it is considered an alternative to
African palm due to the large amount of unused arid land where it can grow. Ecuador’s private sector
has identified the most suitable areas to plant this crop; however current profit estimates are not optimal
yet. Research is ongoing to utilize all sub-products of converting jathropha oil into biodiesel to increase
profitability. There are currently about 700 ha planted with jathropha for commercial use.
La Fabril is the only group in Ecuador producing biodiesel out of palm oil and jatropha. This group
could potentially process up to 50,000 hectares planted with African palm and jathropha.
Local biodiesel consumption is taking place only in the Galapagos Islands. Targets have been set to
blend biodiesel and introduce it to the market progressively from a 3 percent mix requirement in 2014 to
17 percent by 2024. It is not clear at this time where the raw oil to produce the biodiesel will come from.
Government-owned companies such as Hidronacion are exploring the possibility of using jathropha.
These targets could be fulfilled only if a feasible source of oil is identified.
U.S. GOVERNMENT AGENCIES ACTIVITIES
U.S. Agency for International Development
In 2009 USAID began a project with the Coordinating Ministry of Production to elaborate a
comprehensive biofuels policy for Ecuador. This initiative did not progress and the new authorities at
this Ministry are exploring alternative policies. The final proposal was presented to the Production
Minister Nathalie Cely in 2011 at about the same time she was leaving the Ministry to become
Ecuadorian Ambassador to the United States.
U.S. Department of Agriculture (USDA) and U.S. Department of State
Energy and Climate Partnership for the Americas (ECPA)
USDA, with funding of the Department of State has worked with the GOE and the private sector in the
identification of agricultural biomass as a sustainable source of renewable energy. This program has
provided countries such as Ecuador an opportunity to reduce greenhouse gas emissions and improve
their economic growth, two key goals of the ECPA. Ecuador was seen as a strong candidate for USDA’s
ECPA biomass initiative because of its existing biomass resources, geographical advantage, its evolving
policy framework, and its high level of interest.
Ecuador’s ECPA Activities
DEMONSTRATION PROJECT THEME SCIENTIFIC EXCHANGE SUBJECT U.S. STUDY TOUR
AREAS OF INTEREST SUBJECT AREAS OF
Increasing the economic feasibility of biodiesel Economic and technical feasibility of water Use of sugar cane bagasse
production from Jatropha by producing ethanol and hyacinth as a biomass to be used for power and other biomass for
identifying the economic benefits of Jatropha co-products generation. Exchange took place at Texas electric power generation.
FAS has worked with an Ecuadorian company to develop co-products from the jatropha plant in order to
improve the viability and profitability of using the jatropha plant as a feedstock for biofuels. Without
the additional co-products, the price of biodiesel is too low for the jathropha crop to be profitable. The
Ecuadorian company has aimed to develop a process for synthesizing cellulosic ethanol from the
jatropha shell which could then be used as a substitute for methanol for detoxifying the jatropha paste.
After detoxifying the jatropha paste, it could be used as an alternative protein for chicken feed.
As a result of USDA/FAS coordination, scientists at the U.S. Department of Energy’s National
Renewable Energy Laboratory (NREL) have proposed a methodology for supporting the company’s
efforts to increase their yields of cellulosic ethanol. The company is also exploring the possibility of
using the jatropha plant for other co-products such as bio-insecticide, engine/machine lubricant, and
biological catalysts that can be used as inputs in industrial chemical processes. At the same time,
agronomists are doing field trails to improve the yields from the jatrohpa plant.
In late 2011, an Ecuadorian technician participated in a 3 month scientific exchange at Texas A&M
University. The research objective was to expand production and usage of water hyacinth (Eichornia
crassipes), an aquatic weed, for energy. The training provided (1) information on how to operate a
mixed-culture fermentation process, (2) know-how to handle laboratory equipment, (3) up-to-date
scientific literature, and (4) an initial assessment of the technical and economic potential for using water
hyacinth for energy and biofuels. In most trials, methane content greater than 65 percent with a
maximum of 71.36 percent was reached. This project is aligned to one of the 12 National Objectives of
the National Development Plan of Ecuador –National Plan for Good Living. The results of this research
have the potential of being used by generator units near the reservoirs of Ecuador’s largest hydroelectric
U.S. Study Tour
In late 2011, a group of Ecuadorians including delegates from the GOE and the sugarcane industry
traveled to Florida. They visited the facilities of the University of South Florida Polytechnic in
Lakeland, Florida. They looked at the research facilities for chemical and microbiological analysis of
biomass to produce ethanol. The delegation also visited the USDA ARS research facility at Canal Point.
In this research center there are trial plantations with varieties of sugar cane for ethanol. The delegation
also visited the IFAS station at Belle Glade where
research on different biomass, among which are elephant grass, sugarcane and miscantthus, is being
carried out. The visit ended with visits to the companies Climaco (biogas digesters) and sugarcane mill
At the moment biofuels and agro-energy continue to be an issue of national interest because of
Ecuador’s new constitutional mandate to replace Ecuador’s current energy matrix with energy produced
from renewable resources.
Most key players would seem to have the intention to bring this sub-sector to the next level. However,
while the rules of the game remain unclear, considerable private long-term investments are not likely to
occur. Ecuador’s private sector is concerned about policies that support prices not set in the marketplace,
export bans, or requirements to sell locally at preferential prices. Another concern of the private sector
has to do with the policies that will benefit the inefficient production of some biofuels: the government
picking winners and losers.
Some have suggested the creation of special regimes and incentives that could target the use of biofuels
in niche markets when either the consumer or the government is willing to pay the right price, which
would be a higher price for them when fossil fuels are less expensive. For example, blended gasoline or
diesel with biofuels could be marketed separately at gas stations where the consumer will have the
choice to pay the real price of the product. Similarly, biofuels could be used in sensitive locations such
as ecologically-sensitive tourist destinations, hospitals, or government facilities.