Eike Batista’s Supercana challenges Raízen's E2G for Brazil's biofuel leadership. Critical analysis of innovation, risk, and green economy future.

The Second Ethanol War: Eike Batista’s ‘Supercana’ Battles Raízen’s E2G for Brazil’s Biofuel Future

By: Carlos Santos

In the world of Brazilian business and finance, there are few figures as polarizing, ambitious, and ultimately captivating as Eike Batista. When he resurfaces with a grand vision, the market stops, pays attention, and then immediately starts dividing into believers and skeptics. This time, his focus is not on oil or iron ore, but on a green revolution: the "Supercana" (Super Sugarcane), a variety he believes will fundamentally transform global biofuel production and challenge the dominance of established players. I, Carlos Santos, believe this is more than just an agricultural debate; it’s a high-stakes, technology-driven war for the future of clean energy, with the very profitability of Brazil’s ethanol industry hanging in the balance.

The direct challenge that has brought this drama to the forefront is Eike's pointed criticism of Raízen's Second Generation Ethanol (E2G) project. Raízen, a joint venture between Shell and Cosan, is the global leader in sugarcane ethanol, and its E2G is considered by many to be the state-of-the-art in biofuel technology. Eike's bold claims that his Supercana will render not only corn ethanol uncompetitive but also outperform E2G, creates a fascinating, yet tense, showdown. We dive into the details based on an exclusive report from Money Times published on October 8, 2025.

The Technology Showdown: Supercana vs. E2G

🔍 Zoom na realidade (Zooming into Reality)

The reality of Brazil’s ethanol sector is one of profound financial pressure. Eike Batista is right to point out that many traditional sugar mill owners are "under water" due to the competitiveness of US corn ethanol and local issues [Source: Money Times]. This economic squeeze demands radical innovation, not incremental improvements.

Raízen’s E2G technology is based on using the bagasse (the fibrous residue of the sugarcane stalk after crushing) to produce more ethanol, effectively boosting production by up to 50% without expanding cultivated area [Source: Raízen RI, InvestNews]. This is a proven, proprietary technology that integrates seamlessly into existing first-generation (1G) mills, and it has secured long-term, hard-currency contracts with AAA major oil companies, proving its commercial viability and stability [Source: Raízen RI].

The Supercana, by contrast, is a massive step change. It is an enhanced sugarcane variety engineered to produce up to three times more ethanol per hectare and 10 to 12 times more biomass than conventional varieties [Source: CNN Brasil, Click Petróleo e Gás]. Eike’s project is based on creating a plant so fiber-dense (reportedly 22% density versus 12.5% for conventional cane) that it requires entirely new, custom-designed industrial plants and adapted harvesting equipment. This is the crux of the debate: Raízen uses existing waste and infrastructure; Eike proposes scrapping the old system entirely for a hyper-efficient, next-generation infrastructure. The reality is that Eike’s project faces enormous resistance precisely because it failed in the past and demands a $500 million investment just to prove its operational viability in a new, purpose-built facility [Source: InvestNews, JornalCana]. The challenge is not the concept, but the costly and complex operational leap it requires.

(Foto: Divulgação)

📊 Panorama em números (A Panorama in Numbers)

To truly grasp the scale of this debate, we must look at the sheer numbers. Brazilian ethanol production for the 2024/2025 harvest is estimated at roughly 37.4 billion liters, with corn ethanol accounting for 8.33 billion liters [Source: StoneX/Click Petróleo e Gás]. This indicates the seriousness of the competition Eike cites.

Now, consider the Supercana's claims:

Potential Ethanol Production: If Supercana replaced all conventional cane, annual production could theoretically reach 74.8 to 112.2 billion liters (2x to 3x the current level). This is a monumental, industry-redefining number [Source: Click Petróleo e Gás].
Projected Timeline: Eike expects his project to start generating cash flow by 2028 and aims for his variety to replace at least 30% of Brazil’s conventional sugarcane area within 20 years [Source: Money Times].
Investment Required: The initial investment secured is $500 million, a fraction of the cost required to re-engineer 30% of the entire national crushing capacity, which Eike acknowledges requires a "boom" in industrial equipment made in Brazil.

In comparison, Raízen’s E2G has an established, scalable financial model:

Contracted Volume: Raízen has over 4.3 billion cubic meters (cbm) contracted, totaling €4.3 billion in revenue, secured by long-term contracts (5 to 8 years) in hard currency (€) [Source: Raízen RI].
Profitability: Raízen reports a strong EBITDA Margin at 50% and a competitive cash cost between €400/cbm and €450/cbm [Source: Raízen RI].

The numbers clearly show Raízen's E2G is a commercial reality with proven, contracted profitability, while the Supercana is a high-risk, high-reward numerical projection that hinges on a massive, yet-to-be-proven operational overhaul of the sector.

💬 O que dizem por aí (What People Are Saying)

The narrative around the Supercana is sharply divided, illustrating a classic battle between disruptive grandiosity and established industrial pragmatism.

Eike’s Camp and the Supercana Hype: Eike himself is characteristically bullish, framing his critics as traditionalists unwilling to "think outside the box." He compares his venture to Nvidia, noting that "Nobody believed that Nvidia... would become the largest company on the planet. Someone made a difference back then." He argues his plant is simply "denser" and requires adapted, but domestically manufactured, equipment [Source: Money Times]. The promise on the street is huge: ethanol priced the same as kerosene, making it the obvious choice for Sustainable Aviation Fuel (SAF) and eliminating the competition with corn ethanol [Source: CNN Brasil].

The Industry Skeptics and Raízen's View: The industry sentiment, however, remains skeptical. Ricardo Mussa, the former CEO of Raízen, stated publicly that they studied the Supercana but dropped the project because "it was never operationally viable" due to the difficulty of harvesting and crushing its enormous density [Source: Novacana]. The consensus among agronomists and industry veterans is that the variety "has never proven advantageous and still lacks studies" on its economic viability, noting its history of bankrupting previous idealizers [Source: Grupo Idea]. They point out that Raízen’s E2G is already a reality, using existing infrastructure to create high-value products like SAF without the massive retooling risk Eike's project entails. The prevailing opinion is that while the Supercana concept is "cool" for its high biomass conversion rate, its technical challenges are currently insurmountable in existing facilities.

🧭 Caminhos possíveis (Possible Paths Forward)

The clash between Supercana and E2G suggests three Possible Paths for Brazil's biofuels future: Convergence, Dominance, or Collapse.

Convergence: This is the most pragmatic and desirable path. Raízen continues to scale its E2G, solidifying its position in the high-margin SAF and specialty chemical markets. Meanwhile, Eike successfully proves the operational feasibility of his Supercana in his custom-built plant in Quissamã (RJ). This creates a dual-technology future where Raízen optimizes the use of existing waste (bagasse) via E2G, and the Supercana, if proven, gradually replaces conventional cane in large-scale dedicated energy farms, fulfilling its destiny as a major source of low-cost energy biomass and ethanol.
Raízen’s Dominance and Supercana’s Collapse: The industry’s current bet. If Eike fails to overcome the technical challenges of harvesting and crushing the ultra-dense cane—problems Raízen itself could not solve—the Supercana project will face another commercial failure. Raízen, backed by BNDES financing (R$ 1 billion for E2G expansion) [Source: InvestNews], continues its aggressive rollout of E2G plants, securing market leadership and driving the global energy transition with a financially secure and proven model. The Supercana becomes a cautionary tale of overambition.
Disruption and Market Shift: The scenario Eike envisions. If his pilot plant achieves his projected yields and proves that custom-built infrastructure can handle the hyper-dense cane with a cost structure lower than E2G, the Supercana will become the new agricultural standard. This path would force established players like Raízen to either abandon their existing E2G trajectory to license Supercana or face intense competition from a commodity ethanol that truly undercuts corn ethanol. The market would undergo a radical, painful transition, but one that potentially unlocks unprecedented biofuel output.

🧠 Para pensar… (Food for Thought…)

This technical dispute forces us to consider a deeper, Food for Thought question: Is Brazil investing in the right kind of innovation for the energy transition, or just the easiest kind?

Raízen's E2G is brilliant because it is an evolutionary innovation. It de-risks capital expenditure, uses existing waste, and solves a major problem—increasing output without land expansion—by leveraging proprietary technology and commercial contracts. It is smart, safe, and scalable.

Eike’s Supercana is a revolutionary innovation. It is chaotic, high-risk, requires a full industrial reset, and threatens to disrupt the entire supply chain. But if it works, the gains in productivity (up to 3x ethanol, 12x biomass) are so vast that they could make Brazilian ethanol the undisputed, low-cost global energy leader, not just a competitive biofuel.

The critical insight here is that evolutionary innovation (E2G) gets financed by banks (BNDES) and is lauded by analysts, while revolutionary innovation (Supercana) requires a risk-taker (Eike) and private capital (the $500 million investment). We need both. A nation’s energy future should not rely solely on the safest bet. Eike's "provocation" is valid: it forces the entire agro-industry, which has historically been slow to adopt deep structural changes, to think about a truly exponential path to efficiency, even if his execution history makes the project hard to trust.

📚 Ponto de partida (Starting Point)

For anyone entering the debate about the future of energy—whether as an investor, a policy-maker, or a conscientious consumer—the Starting Point must be a comprehensive understanding of what constitutes biofuel competitiveness.

The debate isn't just about the yield per hectare (where Supercana wins on paper) or the cost per liter (where E2G has demonstrated commercial viability). It's about the following:

The "Feedstock-to-Fuel" Challenge: Can the industrial process successfully convert the feedstock (Supercana's dense fibers) into fuel efficiently, cost-effectively, and reliably? The former Raízen CEO's concerns highlight this technical choke point.
Land Use and GHG Emissions: Brazil’s sugarcane ethanol already has a major edge over US corn ethanol due to lower Greenhouse Gas (GHG) emissions and vast arable land that doesn't compete with food crops [Source: ResearchGate, UNFCCC]. Supercana's potential for high yield further reduces the need for land expansion, reinforcing this sustainability lead [Source: Click Petróleo e Gás].
Co-Product Value: Both E2G and Supercana maximize co-products. Raízen uses bagasse for E2G and power; Eike explicitly targets SAF, bio-plastics (packaging, cutlery), and high-efficiency power generation from the massive increase in biomass [Source: CNN Brasil, Grupo Idea]. The ability to create multiple high-value products from one plant is the true mark of a modern biorefinery.

The starting point is recognizing that in this sector, sustainability and economics are two sides of the same coin. The most sustainable product with the lowest carbon footprint is often the one that secures the highest-margin contracts, making the Supercana versus E2G battle a race for not just efficiency, but green credibility.

📦 Box informativo 📚 Você sabia? (Informative Box 📚 Did You Know?)

Did You Know? The competitive landscape for Brazilian ethanol is not a new fight, nor is it a simple one. Historically, Brazil’s sugarcane ethanol has maintained a crucial cost advantage over US corn ethanol due to fundamental agricultural efficiencies.

However, this advantage is highly volatile and sensitive to macroeconomics. A 2010 study noted that while the cost of sugarcane ethanol production in Brazil is inherently lower, the inclusion of shipping costs to the US and co-product credits given to US corn producers (who sell animal feed) significantly narrows the gap [Source: ResearchGate/IDEAS]. Furthermore, the exchange rate is a massive variable: a strengthening Brazilian Real can immediately make Brazilian exports, including ethanol, more expensive and less competitive on the world stage [Source: USDA].

This sensitivity explains the urgency behind Eike's "Supercana" claims: he says its sheer productivity will make the price of his ethanol competitive with even kerosene, a price floor so low that it would dwarf the competition from corn ethanol regardless of exchange rate fluctuations [Source: CNN Brasil]. The goal is to move the industry past marginal cost differences and into a new realm of production volume that fundamentally redefines the global biofuel market’s cost structure.

🗺️ Daqui pra onde? (Where to From Here?)

The question of Where to From Here? is one for Brazil’s economic policy-makers and industrial leaders. The country is uniquely positioned to lead the global energy transition due to its vast land resources and mature sugarcane infrastructure.

The path forward must focus on de-risking and scaling both models of innovation:

De-Risking the Revolution (Supercana): The government or private consortia should seriously consider supporting technical due diligence and providing a clear, structured path to proof of concept for the Supercana. If Eike’s technical data holds up (the 2.8 terabytes he mentions), the economic benefit to the nation is too large to ignore simply because of past corporate history. A structured public-private partnership could vet the technology and provide the industrial adaptation roadmap Eike demands.
Solidifying the Evolution (E2G): Raízen’s success with E2G is a national asset. Policy must continue to favor and incentivize the rapid build-out of these proven plants, especially those focused on Sustainable Aviation Fuel (SAF) contracts, which guarantee hard currency and high margins.

Ultimately, Where to From Here? is towards a bio-economy where sugarcane is not just a source of sugar and ethanol, but a complex, zero-waste platform for renewable energy, materials, and specialized fuels. The Supercana is a vision for this platform; E2G is the proven foundation being built today. Brazil needs to ensure it doesn't get distracted by one while neglecting the other.

🌐 Tá na rede, tá oline (It’s on the Net, It’s Online)

"O povo posta, a gente pensa. Tá na rede, tá oline!" (The people post, we think. It’s on the net, it’s online!)

When Eike Batista makes a splash, the internet inevitably erupts. What's truly on the net, online about the Supercana versus E2G debate is a vibrant, often uncritical, comparison of the two, especially on platforms like YouTube and Twitter.

The online conversation frequently misses the industrial complexity. Eike’s critics on YouTube often focus on the controversial financial history and the unproven viability of his partners [Source: YouTube snippets], rather than engaging with the agricultural and chemical science. The believers, conversely, latch onto the sensational numbers—"12x more biomass!"—without considering the $500 million technical challenge of creating an entirely new industrial process for harvesting and crushing.

The most valuable content online is found in the deep-dive investor reports and specialized agricultural forums where agronomists and engineers discuss the pre-treatment stage—the "most critical stage" of E2G production where Raízen holds key proprietary patents, and which is also the crucial technical hurdle for the Supercana's dense fibers [Source: Raízen RI]. The lesson from the digital sphere is: The loudest voices often have the least technical basis for their claims. True insight requires digging past the hype and focusing on the peer-reviewed science and the audited financials.

🔗 Âncora do conhecimento (Anchor of Knowledge)

The future of biofuel is inextricably linked to the broader macroeconomic environment—specifically, the global flow of capital and the domestic interest rate landscape. A high-cost-of-capital environment in Brazil, driven by persistent high-interest rates, makes massive, capital-intensive, revolutionary projects like the Supercana exponentially riskier and harder to finance. It also directly impacts the profitability of established, expanding operations like Raízen's E2G by increasing debt servicing costs and reducing the incentive for large-scale domestic industrial investment. For a detailed, critical analysis of how the prevailing high-interest-rate policy in Brazil affects everything from corporate balance sheets to the viability of these essential green projects, click here to understand why Brazil's high Selic rate isn't working for the real economy.

Reflexão final (Final Reflection)

The showdown between Eike’s Supercana and Raízen’s E2G is a microcosm of the energy transition itself: a clash between bold, high-risk disruption and measured, commercially viable evolution.

As I see it, the market needs both the audacious vision of Eike to push the boundaries of productivity and the corporate discipline of Raízen to deliver on proven technology. Eike's project challenges the complacency of an industry being slowly eroded by corn ethanol, forcing them to consider a scale of efficiency previously unimaginable. Raízen’s E2G, meanwhile, is delivering on the promise of a bio-economy today, securing long-term contracts and leveraging existing assets. The ultimate winner isn't the one with the best marketing, but the one that proves its technology can be operationally viable, economically scalable, and consistently profitable. Brazil’s future hinges on its ability to nurture both kinds of innovation without letting one's hype prematurely dismiss the other's reality.

Recursos e fontes em destaque (Featured Resources and Sources)

Money Times: The source of the exclusive interview detailing Eike Batista's claims.
Raízen Investor Relations (RI): For financial data, E2G project status, contracts, and profitability metrics.
InvestNews: For reports on Raízen's BNDES financing and the historical challenges faced by the Supercana concept.
Grupo Idea & Novacana: Industry-specific analysis and skepticism from agricultural experts on the Supercana's operational feasibility.
ResearchGate/USDA: Academic studies on the historical and structural competitiveness of Brazilian sugarcane ethanol versus US corn ethanol.

⚖️ Disclaimer Editorial

This article reflects a critical and opinionated analysis produced for the Diário do Carlos Santos, based on public information, reports, and data from sources considered reliable. It does not represent official communication or institutional positioning of any other companies or entities mentioned herein.