Published on December 30th, 2014 | by Zachary Shahan


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

December 30th, 2014 by  

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.”

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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is tryin' to help society help itself (and other species) with the power of the typed word. He spends most of his time here on CleanTechnica as its director and chief editor, but he's also the president of Important Media and the director/founder of EV Obsession, Solar Love, and Bikocity. Zach is recognized globally as a solar energy, electric car, and energy storage expert. Zach has long-term investments in TSLA, FSLR, SPWR, SEDG, & ABB — after years of covering solar and EVs, he simply has a lot of faith in these particular companies and feels like they are good cleantech companies to invest in.

  • JamesWimberley

    Sugarcane does not, you will be relieved to hear, grow anywhere near the Amazon rainforest. The regions are the drier NE and SE, where the original Atlantic forest (Mata Atlantica) was cleared long ago.

    • Larmion

      True. And even more encouraging: there’s no risk of it moving into the Amazon rainforest even if demand were to grow further. Sugarcane is highly productive crop, and thus also a highly demanding one in terms of nutrients. It would deplete the poor soil of a recently cleared forest in a few months. On the upside, it’s a C4-plant and thus fairly water-efficient.

      The same holds true of most other crops grown commercially in Brazil btw, including the often villified soybeans. Cleared forest is mainly used for ranching and subsistence agriculture. On the other and, many of those ranchers and smallholders were driven to the Amazon because far more profitable arable farmers drove them out of the good parts.

      The traditional first generation ethanol from sugarcane that Brazil started using under its dictatorship is one of the few truly sustainable biofuels, and one of the cheapest and highest yielding too at that. Whatever their other evils, the colonels left Brazil with the best research institute for tropical agriculture in the world.

  • No way

    Shell always makes me shiver. Nothing good has ever come out of that company. So how will they violate human rights and/or the environment or something like that this time?

    Hopefully Cosan is a company with some kind of soul and conscience at least, anyone know anything about them?

  • Matt

    Does this mean they don’t burn the sugarcane fields to clear the leafs before harvest? That is a big plus all too.

    • Larmion

      Actually, that’s anything but a plus. It’s potentially an environmental disaster.

      Burning the non-harvestable parts returns a huge portion of the nutrients in the sugarcane to the soil, mainly minerals such as potassium. Perhaps more importantly, it also returns quite a bit of carbon to the soil in the form of ash. Maintaining a soil’s carbon content is essential both to water retention and to a healthy soil microbiome.

      Cellulosic ethanol is a wonderful technology, but provisions must be made to avoid soil depletion. In a best-practice scenario, the product left after steam explosion, AFEX or whatever pre-treatment they’re using is returned to the field and a cover cropping system is used to avoid excessive soil depletion. The pulp left after SSL and fermentation could also be spread. However, they’re more likely just to burn the whole lot to power their plant.

      Sadly, biofuels as an industry has been worryingly careless about sustainable agriculture (with a few notable exceptions, as ever). Cellulosic ethanol is one of the most promising techniques out there, but it requires a very specific crop plan and good soil management. That has often been missing; after all, the farmer is paid by the tonne of biomass he delivers to the plant and nothing else.

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