TMO, Usina form joint venture for Brazilian cellulosic plant

By TMO Renewables | April 18, 2013

TMO Renewables, the leading British developer of second generation biofuels technology,  and Usina Santa Maria Ltda have entered into an agreement to form a joint venture to build the first commercial production plant in Brazil to convert sugar cane waste (bagasse) to cellulosic bioethanol.

TMO has signed a binding memorandum of understanding (MOU) with Usina Santa Maria Ltda to build Brazil’s first second generation bioethanol production facility in São Paulo state. Under the MOU, TMO in joint venture with Usina Santa Maria Ltda will build, own and operate a 10 million litre second generation ethanol pilot plant to convert bagasse to cellulosic bioethanol. This will be followed by the construction of full-scale industrial plant. The plant will be located alongside a sugar mill owned by Usina Santa Maria at Cerquilho (São Paulo state). The plant is scheduled to go into production in 2014. The bioethanol will primarily be used to power flex-fuel vehicles in the domestic market.

TMO worked with the support of BB2E, a British company that assists the development and commercialization of British technology, who have helped to build what has become a strong relationship between TMO and the owners of Usina Santa Maria.

TMO entered into negotiation with Usina Santa Maria in September 2012 when it formed part of a UK business delegation to Brazil led by the UK Prime Minister David Cameron.

“This is a great example of how British businesses can profit from our trade missions and succeed in fast growing markets,” said Prime Minister David Cameron.

“This exciting new venture is testament to British expertise in pioneering technologies, such as biofuels. And with over 150 new British jobs in the pipeline, it shows how by doing more abroad we can reap the benefits back at home.”

 “Of the world’s largest economies, Brazil has made the move to encourage flex engine cars that can run on 100% ethanol,” said David Weaver, chief executive of TMO. “Through 10 years of research and development TMO has created a market-leading process to convert waste to biofuels. We will now prove the effectiveness of our process by building the first plants of their kind to convert waste-to-ethanol at commercial volume.”

The joint venture is a new milestone in the transformation of TMO from a research-based entity to a fully-commercialized company under the stewardship of Weaver, who joined TMO in May 2012. The agreement will create jobs in Brazil and the UK.

“Our friends and partners, particularly Mr. Edson Patto on our side and Rodolpho Koch, Theo Chapman and James Buchan from BB2E, have been fundamental in developing this opportunity into a contract. I believe this is a milestone for ethanol industry and I feel honored and privileged to be a part of this moment. We hope TMO feels the same and we look forward to new opportunities,” said José Pilon, Director and President of the Usina Santa Maria.

Brazil is the second largest producing nation of First Generation ethanol with a rapidly-developing demand for ethanol to replace hydrocarbon fuels. In September 2012, TMO signed a Letter of Intent to secure long-term supply of feedstock. The MOU signed today guarantees a 20-year supply of feedstock as part of the joint venture to build the pilot plant

Brazil is also the world’s leading market for ethanol fuels. According to two separate research studies conducted in 2009, 65 percent of flex-fuel registered vehicles regularly use ethanol fuel. In São Paulo, usage climbs to 93 percent of flex car owners.