Petrobras reaffirms commitment to biofuels at biennial event

By Kris Bevill | June 09, 2011

As Brazil recovers from a difficult start to the year in the ethanol sector, Petrobras, the country’s integrated energy firm, seized the opportunity to highlight its activities in the industry during an Ethanol Summit it sponsored in São Paulo, June 6-7. The biennial event, hosted by UNICA, Brazil’s sugarcane industry association, was focused this year on solutions for a low carbon economy. Among the issues addressed by Petrobras during the event - financing, infrastructure development, industry expansion, and more financing.

João Norberto Noschang Neto, head of technology management for Petrobras’ biofuels division, stressed the company’s commitment to biofuels during the summit and said the company plans to invest $400 million in biofuels development by 2014. Projects targeted for development include the reuse of glycerin resulting from biodiesel production, aviation biofuel production, cellulosic ethanol and algae-to-biofuels technology. Second-generation biofuel production is taking priority, according to Neto, and the company expects to increase its production of cellulosic ethanol from sugarcane bagasse by 40 percent within the next few years. “Petrobras began its biofuels project in 2004, and in order to accelerate the process, we joined forces with Novozymes for their enzyme technology and KL Energy to collaborate on testing and mature technology development,” he said. The company is also focusing on process sustainability and analyzing the entire life cycle of both ethanol and biodiesel.

Sustainability played a key role in several of the conference panels and Petrobras also repeatedly addressed the issue. Brazil is currently facing an issue of not enough supply to meet its annual demand and Neto said vertical growth in productivity is a challenge for the industry. However, he pointed to research that demonstrates it can be possible to sustainably improve sugarcane production through extended harvest periods, storage and by rotating other crops with sugarcane. Ricardo Castello Branco, ethanol director of the company’s biofuels division, also addressed the sustainability factor in his presentation, stating the importance of increasing sugarcane production without expanding plantation boundaries. “We have spent a lot of time discussing the issue of vertical growth, with a view to limiting the use of natural resources,” he said, adding “we need to provide the consumer with sustainably-produced ethanol at a competitive price.”

Other projects discussed by Petrobras during the conference included the approximately 800-mile long ethanol pipeline currently being constructed by a joint venture formed between Petrobras, two of the country’s largest ethanol producers - Cosan S.A. and Copersucar S.A. - and several logistics and construction firms. The pipeline, which is expected to be ready for use beginning in 2013, will “radically change the ethanol logistics scenario in Brazil,” Paulo Roberto Costa, Petrobras’ downstream director said. To further address financing constraints for the country’s ethanol producers, Petrobras also officially launched a program in partnership with Brazil’s six largest retail banks to facilitate credit to companies within Petrobras’ supply chain on June 6. Petrobras is not providing funding for the program but will transfer its credit perception in the market to participants, which should alleviate some of the risk associated with financing small and midsize companies, according to the company.