Shell and Cosan invest $1 bn in Brazilian biofuels

Originally posted on BiofuelCentral.org by John Brian Shannon John Brian Shannon

Everyone knows that Royal Dutch Shell is a giant in the global petroleum industry, but did you know that Raízen (Shell and Cosan’s joint biofuel venture) is Brazil’s 3rd-largest energy company?

Now Shell the petroleum giant and Cosan the sugar giant have teamed up to invest $1 billion dollars over the next 10 years in 2nd generation biofuels sourced from sugarcane.

Raízen, the joint venture between Royal Dutch Shell and Cosan Ltd, is the third-largest energy company in Brazil in terms of revenue. Image courtesy of Raízen.
Raízen, the joint biofuel venture between Royal Dutch Shell and Cosan Ltd. is the 3rd-largest energy company in Brazil. Image courtesy of Raízen.

The sweet part of this deal (apart from the sugarcane) is that both companies have committed to bring 1st generation biofuel production practices to an end, replacing those practices with 2nd generation technology, making Brazilian biofuels orders-of-magnitude cleaner.

Growing sugarcane for biofuel in Brazil usually means harvesting the cane of the sugarcane plant, leaving the rest of the plant behind. All of the ‘bagasse’ or ‘stover’ as it’s sometimes called, goes up in smoke as the fields are burned by the farmers twice per year. (Due to Brazil’s climate and nutrient-dense soil, sugarcane growth is explosive and Brazilian farmers can harvest 2 crops of sugarcane per year)

So much smoke and CO2 is generated from this 1st generation practice that NASA says it is able to detect changes in the Earth’s airmass for many weeks after millions of acres of sugarcane fields are burned in Brazil.

Happily, that’s going away now as Raízen will harvest the bagasse immediately after the main sugarcane harvest and process it with enzymes in cellulosic bioreactors, converting it into very pure ethanol.

All the benefits of ethanol biofuel — but without the (1st generation) drawbacks

Nothing will change with regards to the same fast, reliable, and simple process presently employed to produce biofuel from the sugarcane itself.

But harvesting the bagasse, changes everything as millions of acres of fields no longer need to be burned twice per year in order to remove the millions of tonnes of leftover plant material.

Due to advances in cellulosic biofuel technology, the leaves, roots and other parts of the sugarcane plant can be used in new cellulosic biofuel reactors (basically, a 500,000 gallon soup pot) to produce very high quality ethanol (or biodiesel, depending on the enzymes chosen and the process employed) at a moderate cost.

Raízen will increase their annual biofuel output by 50% to 1 billion litres — which is roughly equivalent to 106 million US gallons

No doubt that most of this newfound ethanol will be used to power cars within Brazil as all gasoline in the country must have a minimum 25% ethanol component — known as the E25 blend. If you choose the ‘other pump’ at the gas station, you can fuel your car with 100% ethanol, assuming your car is E100 compatible.

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 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. — José Goldemberg, the father of the Brazilian biofuel industry, as quoted by CleanTechnica.com

If all ethanol producers in Brazil follow Raízen’s lead, the country could soon be exporting millions of litres of very pure (clean burning) and very clean (sustainable agriculture practices) ethanol biofuel

As far as the cost is concerned, producing second generation cellulosic oil is more costly than that of ethanol, produced from other sources. Raizen’s Agro-Industrial Director, Joao Alberto Abreu, expects costs to decrease over time as enzymes needed for production become more easily available.

Brazil is the biggest ethanol producer in the world and one of the biggest exporters of biofuel.

Many ethanol producers have been struggling over the past few years but there are encouraging signs as domestic demand for ethanol is on the rise, while the opportunity to export cellulosic ethanol might grow in the near future.

It looks like 2nd generation biofuel production practices have won in Brazil. Competitors will be forced to emulate Raízen’s lead rather than continue to send millions of dollars worth of product up in smoke at each harvest

All in all, a very sweet deal. Congratulations to Shell and Cosan on their Raízen joint venture.

Biofuel market to double by 2022

by John Brian Shannon John Brian Shannon
Originally published at BiofuelCentral.org

New biofuel technologies are allowing commercially viable transportation fuel production from switchgrass, non-edible grains and fruits, from certain trees, and recently from the ‘stover’ or ‘dross’ of certain crops (stalks, roots, leaves, bark, nutshells, husks) and algae.

Algae is the new player on the block and once it is supercharged with common industrial waste gases (like CO2) it becomes an exceptionally pure and clean burning biofuel with no negative waste stream.

But some may feel that biofuels have little future due to dramatically falling oil prices and the improved fuel mileage of today’s cars

However, that’s not the case…

“China recently set aside an area the size of England to produce jatropha and other non-food plants for biodiesel.

India has up to 60 million hectares of non-arable land available to produce jatropha, and intends to replace 20 percent of diesel fuels with jatropha-based biodiesel.

In Brazil and Africa, there are significant programs underway dedicated to producing non-food crops jatropha and castor for biodiesel.” — Will Thurmond in his book, Biodiesel 2020

Three generations of biofuel are already on the market or are undergoing commercial testing as of 2014

  • 1st-generation biofuels are made from processed food crops such as corn, sugar cane and sugar beets
  • 2nd-generation biofuels are made from non-food crops such as camelina, jatropha, millettia and switchgrass, which can grow in semi-arid regions
  • 3rd-generation biofuels are made from algae + enzymes, or organic waste materials such as cardboard, stover, other biomass, or from waste gases and waste liquids from industry.

3rd-generation biofuels show the most promise and are progressing well along their production trials timeline — while 1st-generation biofuels still have major environmental and minor economic obstacles to overcome.

Meanwhile, 2nd-generation biofuel production is booming in many developing countries and investors are making excellent returns.

Dual fuel gas station at Sao Paulo, Brazil
As this photo demonstrates, you can fill up with 100% pure sugarcane ethanol (A) or gasoline/bio-ethanol blend (G). In Brazil, all gasoline is required by law to have a minimum bio-ethanol content of 22 percent. Image courtesy of Mariordo (Mario Roberto Duran Ortiz)

The global biofuel industry is entering a rapid phase of development

Total global biofuel production is projected to reach 66.3 billion gallons per year (BGPY) by 2022, and bio-ethanol is expected to hit 51.1 BGPY compared to biodiesel’s 16.2 BGPY.

According to a recent report from Navigant Research, worldwide revenue from biofuels for road transportation will grow from $166.5 billion annually in 2014 to $337.8 billion by 2022.

“Over the last 10 years, growth in the biofuels sector has been driven by the increase in ethanol production capacity in the United States and Brazil, and in biodiesel in Europe. Today, the industry is on the verge of entering a new phase of development focused on advanced and drop-in biofuels.” — Scott Shepard, research analyst with Navigant Research

“Given the scale of development to date and the crystallization of interests… widespread biofuels commercialization is no longer a question of if, but when.” — Biofuels Markets and Technologies report by Pike Research

A note about sugarcane

The following is true whether sugarcane is being harvested to produce table sugar or is being harvested to produce bio-ethanol

When sugarcane is harvested (every 5 1/2 months) the leaves, roots, etc. (also known as the ‘stover’ or ‘dross’ by farmers) is left on the ground and burned.

Millions of hectares of sugarcane fields go up in smoke, twice per year.

The people who can afford to leave the area during the twice-yearly burning are certain to leave as the unpleasant black smoke pervades those regions for up to two weeks, at two different times of the calendar year. Each year, a total of one month’s growing season is lost as the fields are burned.

This common practice releases millions of tonnes of CO2 and other gases (some toxic) into the atmosphere, causing a net loss for Earth’s atmosphere.

But even as burning millions of hectares of sugarcane fields measurably worsens the air quality of the Earth — hundreds of miles away from the twice-yearly burning in cities like São Paulo, Brazil for example (population 11.3 million) the urban air quality is dramatically improved year-round as a result of using bio-ethanol in the city’s millions of cars.

New technology to the rescue

Some foresighted bio-ethanol producers in Brazil are harvesting the sugarcane stover and processing it into biodiesel or bio-ethanol (depending on the enzyme used) in cellulosic biofuel reactors specially made for conversion of plant stover.

Total biofuel yields from stover are slightly lower than normal sugarcane biofuel production. But many farmers find stover biofuel produces fuel for farm use and they burn it to produce both heat and electricity to power the biofuel factory (during the twice-yearly biofuel or table sugar production run) and nearby homes (all year).

The Brazilian government is assisting farmers and thereby helping the Earth’s atmosphere by providing seed money and a mild subsidy to sugarcane farmers (regardless if the sugarcane is ultimately grown to produce table sugar or biofuel) to allow them to economically harvest and process millions of tons of stover, instead of burning it in the fields.

Properly targeted policies now, can have maximum impact on the promising economic and environmental future of biofuel.