Can Second-Generation Ethanol Production Help Decarbonize the World?

Raízen, a bioenergy company headquartered in São Paulo, is Brazil’s leader in sugar and ethanol production and the world’s leading ethanol trader. Since its creation in 2011, the company had primarily produced first-generation ethanol (E1G) from sugarcane, a crop that can also be used to produce sugar.

In 2015, Raízen also started to produce second-generation ethanol (E2G), a biofuel derived from residual and waste materials, such as cane bagasse and straw – which don’t compete with food production. The company’s growth strategy focused on developing and boosting a low carbon portfolio that focused on E2G, based on the belief that Raízen—and Brazil—could help the world decarbonize and profit from the energy transition.

Paula Kovarsky, Raízen’s chief strategy and sustainability officer, was confident the company could become a global green energy champion. But after the board’s approval for the first round of E2G investments, she faced a complex challenge: how to expand the market for second-generation ethanol and other sugar-cane waste biofuels, in order to ensure Raízen’s long-term growth.

Harvard Business School professor Gunnar Trumbull and Kovarsky discuss the company’s strategy for bringing second-generation ethanol to the world in the case, “Raízen: Helping to Decarbonize the World?”