Raizen to begin cellulosic ethanol production in 2014

By Susanne Retka Schill | December 04, 2012

Brazil’s Raízen expects to begin commercial production of cellulosic ethanol in 2014, CEO Vasco Dias told shareholders at Cosan investor days, held in New York City and Sao Paolo in November. Raízen is a  joint venture between sugar company Cosan SA and Royal Dutch Shell that began operations in June 2011.

Citing a potential second-generation ethanol production capacity of 1.5 billion liters (40 MMgy) utilizing 6 million tons of biomass, Dias reported Raizen will first produce cellulosic ethanol at its 40 MMly pilot Costa Pinto mill which represents an investment of R$180 million ($90 million). It expects the first mill to produce cellulosic ethanol commercially will come online in the 2014-’15 season, and eight additional mills will add second-generation capacity by 2024. As part of the joint venture, Shell contributed commercialization rights related to Iogen Energy Inc. technology and shares in Codexis.

Raizen’s net revenues totaled R$50 billion, providing jobs for 43,000 in Brazil. In its Energia division, Raizen reported 6 billion liters of ethanol trading volume, and 1.9 billion liters of upstream ethanol production in 2011-’12 from 24 mills with a combined sugarcane crushing capacity of 65 million tons and 900 MW of cogeneration capacity. The Combustiveis division handled 22 billion liters of fuels at 4,600 retail stations, 720 C-stores, 55 terminals and 54 airports, giving it a 23 percent market share.

Dias outlined the annual results in a slide presentation available on the company’s website.

In a discussion of the company’s plans for growth and profitability, Dias said Raízen will focus on productivity increases surrounding sugarcane field renewal and increased machine harvesting. It also plans to extend its electric energy sales beyond the sugarcane harvest season, from 7.5 to 11 months per year.

Raizen also has a 20 percent stake in an 880-mile ethanol pipeline that is expected to begin operations in the first half of 2013. The 21 billion-liter-per-year pipeline includes investments from Petrobra,s Odebrecht, Copersugar, Camargo Correa and Unitos that total R$7 billion.