Brazil is making strides in clean energy: sugarcane biomass now provides 15.8% of the country’s Total Energy Supply, cementing its role as a fundamental pillar of the Brazilian energy matrix and a vital revenue stream for the sugarcane industry.
The transformation of the Brazilian sugarcane sector goes well beyond sugar and ethanol production. Today, sugarcane bagasse and straw are becoming valuable inputs for electricity generation, bolstering Brazil’s energy matrix with a renewable and sustainable source. This cogeneration activity not only meets the operational needs of the mills themselves but also injects a significant surplus into the National Interconnected System (SIN), creating a new revenue stream from what was once considered waste.
The importance of this contribution is significant. Recent data indicates that sugarcane biomass already accounts for a considerable share of the national energy demand. This strategic process positions the sugarcane industry as a crucial player in the country’s transition to a greener future, ensuring large-scale energy security and sustainability.
Turning Waste into Clean Energy
The energy cogeneration process within the mills is a prime example of a circular economy. After the cane is crushed, the bagasse is combined with harvest straw and used as fuel in boilers. This process generates high-pressure steam, which drives turbines and produces electricity. A portion of this clean, renewable energy is consumed internally to power the facilities themselves. However, the potential exceeds these needs, with approximately 65% of the generated electricity destined for sale in the energy market, according to StoneX estimates.
A Pillar of the Sustainable Energy Matrix
The contribution of sugarcane biomass to Brazil’sTotal Energy Supply (OIE) is remarkable. In 2025, this renewable source accounted for 15.8% of the total, according to the Energy Research Office (EPE). In that same year, renewable sources as a whole accounted for nearly half of the country’s energy supply, at 49.5%. Within the biomass energy segment, sugarcane bagasse holds a dominant lead, accounting for 73% of installed cogeneration capacity, according to data from the Electric Energy Commercialization Chamber (CCEE) from February 2026.
Regional Concentration and Strategic Growth
Bioelectricity production from sugarcane is primarily concentrated in regions where the sugarcane industry has a strong presence. According to information from StoneX, Brazil’s Southeast and Midwest regions house 81% of the country’s bagasse-based generation capacity. Analyst Letícia Correia of StoneX highlights that this expansion follows the maturing of the sector, which has moved to view electricity generation not just as a means to reduce operational costs, but as a strategic opportunity to diversify and increase revenues for sugarcane mills.
Market Dynamics and Seasonal Advantage
The profitability of cogeneration is intrinsically linked to electricity market conditions, with the Difference Settlement Price (PLD) being a key indicator. Letícia Correia points out that the PLD is influenced by factors such as hydroelectric reservoir levels. For sugarcane mills, this dynamic offers a unique advantage: the period of highest biomass availability (between May and October, during the Center-South harvest) coincides with the dry season, when reservoir levels drop, which tends to drive up the PLD. Data from CCEE, Pecege, and StoneX reveal that, over the last five harvests, the average price of energy during the dry season was 12.6% higher than that recorded during the wet season.
Valuable Waste Powers the Future of Energy
Cogeneration represents a multifaceted solution for sugarcane mills, combining cost reduction, guaranteed energy security, and a consistent source of additional revenue. More than just an industrial step, sugarcane bioelectricity has become a strategic pillar in the sector’s financial and energy management. For the Brazilian Electric System, clean energy from sugarcane biomass is vital, as it adds a robust and reliable renewable source precisely during the period when hydroelectric generation faces the greatest challenges. This synergy strengthens the Brazilian energy matrix, ensuring greater resilience and advancing the journey toward sustainability. The role of sugarcane in Brazil’stotal energy supply is poised for growth, consolidating its position as one of the engines of the country’s energy transition.