Shell & Cosan Jointly Invest Nearly $1 Billion In Brazilian Ethanol

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Originally published on Sustainnovate.

Shell & Cosan Joint Venture To Invest Nearly $1 Billion In Brazilian Sugarcane Ethanol

I had the pleasure of speaking with 2013 Zayed Future Energy Prize “Lifetime Achievement” winner José Goldemberg a couple years ago at the Zayed Future Energy Prize press conference. He seemed like such a humble man, so passionate about learning and societal progress.

The key reason Mr Goldemberg was winning the Lifetime Achievement award was that he had pioneered the use of sugarcane biofuel, in Brazil and globally. Recent news shows how significant that research development still is. A Royal Dutch Shell and Coasan joint venture in Brazil, Raízen, has just invested R$2.5 billion (~$928 million) into 8 sugarcane cellulosic ethanol plants.

These ethanol plants turn sugarcane bagasse, straw, and leaves into fuel. Clearly, this is useful in a couple of ways: 1) it uses a waste product that would otherwise have to be dumped somewhere, and 2) it creates truly green biofuel that is not competing with food production and driving up food prices, which is annoying to some of us, but really hurts the world’s poorest citizens.

Green Car Congress notes that Raízen’s “first second-generation ethanol plant, with an annual capacity of 40 million liters (10.6 million gallons US), began operation earlier this month.”

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So, how much fuel is Raízen aiming to produce with these sugarcane ethanol plants? 1 billion liters (106 million gallons US) per year. That will be a 50% increase in its biofuel production.

The ethanol industry is huge in Brazil, with 25% of gasoline content coming from anhydrous ethanol there. Lest you think this is a very new development, here’s a shocker: Brazil’s ethanol fuel program is 37 years old (thanks to Mr Goldemberg). Here’s more information on the program from Wikipedia (and included in an article I wrote about Goldemberg’s pioneering work earlier this year):

“There are no longer any light vehicles in Brazil running on pure gasoline. Since 1976 the government made it mandatory to blend anhydrous ethanol with gasoline, fluctuating between 10% to 22%, and requiring just a minor adjustment on regular gasoline engines. In 1993 the mandatory blend was fixed by law at 22% anhydrous ethanol (E22) by volume in the entire country, but with leeway to the Executive to set different percentages of ethanol within pre-established boundaries. In 2003 these limits were set at a minimum of 20% and a maximum of 25%. Since July 1, 2007 the mandatory blend is 25% of anhydrous ethanol and 75% gasoline or E25 blend. The lower limit was reduced to 18% in April 2011 due to recurring ethanol supply shortages and high prices that take place between harvest seasons.

“The Brazilian car manufacturing industry developed flexible-fuel vehicles that can run on any proportion of gasoline (E20-E25 blend) and hydrous ethanol (E100). Introduced in the market in 2003, flex vehicles became a commercial success, reaching a record 92.3% share of all new cars and light vehicle sales for 2009. By December 2009 they represented 39% of Brazil’s registered Otto cycle light motor vehicle fleet, and the cumulative production of flex-fuel cars and light commercial vehicles reached the milestone of 10 million vehicles in March 2010, and 15.3 million units by March 2012. By mid-2010 there were 70 flex models available in the market manufactured from 11 major carmakers. The success of “flex” vehicles, together with the mandatory E25 blend throughout the country, allowed ethanol fuel consumption in the country to achieve a 50% market share of the gasoline-powered fleet in February 2008. In terms of energy equivalent, sugarcane ethanol represented 17.6% of the country’s total energy consumption by the transport sector in 2008.”

Raízen, by the way, is the third-largest energy company in Brazil in terms of revenue.

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Zachary Shahan

Zach is tryin' to help society help itself one word at a time. He spends most of his time here on CleanTechnica as its director, chief editor, and CEO. Zach is recognized globally as an electric vehicle, solar energy, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, Canada, and Curaçao. Zach has long-term investments in Tesla [TSLA], NIO [NIO], Xpeng [XPEV], Ford [F], ChargePoint [CHPT], Amazon [AMZN], Piedmont Lithium [PLL], Lithium Americas [LAC], Albemarle Corporation [ALB], Nouveau Monde Graphite [NMGRF], Talon Metals [TLOFF], Arclight Clean Transition Corp [ACTC], and Starbucks [SBUX]. But he does not offer (explicitly or implicitly) investment advice of any sort.

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