Greenergy, Bauche launch Greenergy Brazil

By Holly Jessen | January 04, 2010
Posted Jan. 27, 2010

Greenergy International Ltd., a UK fuel supplier, and Bauche Group, a France-based ag commodities business, have announced a joint venture to sell sustainable Brazilian ethanol in Europe. Greenergy will have a 70 percent stake in Greenergy Brazil, which will be headquartered in Sao Paulo, and Bauche the remaining 30 percent.

The new business will create a direct commercial relationship with both suppliers and Brazil's ethanol and sugar mills, according to Alex Lewis, head of communications for Greenergy. The company has been working with suppliers in Brazil since 2007 to develop and implement environmental and social sustainability criteria. Bauche, on the other hand, has extensive trading relationships with Brazilian mills.

The joint venture was prompted by increasing demand for biofuels due to the UK's Renewable Transport Fuels Obligation (RTFO) and the European Union's Renewable Energy Directive (RED), both which mean fuel suppliers are required to include greater amounts of biofuels. RTFO and RED also require that the biofuels meet greenhouse gas and sustainability requirements. "We can't just supply any old biofuel," Lewis told EPM.

Greenergy has established a gold standard sustainability audit program for ethanol producers in Brazil. That standard looks at environmental sustainability as well as social sustainability, considering issues such as land use, provisions for local fauna and flora and health and safety conditions for workers. "It's very broad ranging," she said. A total of 100 percent of the ethanol supplied from Brazil to Europe through Greenergy Brazil will meet the company's gold standard sustainability criteria.

Greenergy, which already supplies some sustainable Brazilian ethanol in the UK, says the joint venture will help secure future supplies and reduce the cost of buying ethanol. In 2010 traded volumes of Brazilian ethanol are expected to exceed 600 MMly (158 MMgy), according to a Greenergy press release. Of that amount, about half will be supplied by Greenergy to the UK market. "These levels are expected to more than double over the next 3 years as obligated biofuel inclusion levels increase across Europe," the press release said.

"Working with Greenergy has enabled us to strengthen our network and to develop the supply infrastructure to guarantee the highest quality sustainable bioethanol from the Brazilian market," said Alexander Bauche, Bauche board director. "Greenergy Brazil is the next step in establishing a secure export market and in expanding our trading position."

According to the companies' Web sites, besides producing traditional fuel in the UK, Greenergy imports sustainably produced ethanol and biodiesel as well as producing biodiesel on the east coast of England. The company supplied more than one third of all the biofuel sold in the UK since 2005. Bauche, founded in 1880, is today an international trade group in agricultural commodities and agribusiness products. In 2005 the company set up Bauche Energy, specializing in research and distribution of biofuels.