MOSCOW (MRC) --Shell has agreed to buy a total of 3.25 billion litres of sugar-cane cellulosic ethanol under a long-term agreement with Brazil’s Raizen, said the company.
The low-carbon fuel is expected to be produced by five plants that Raizen plans to build in Brazil, bringing its total portfolio of cellulosic ethanol facilities to nine.
Shell contributed the cellulosic ethanol technology during the formation of Raizen, a joint venture with Cosan SA, in 2011. Since then, Raizen has developed and scaled-up the process for making low-carbon intensity ethanol from sugar-cane waste. The new plants will enable Raizen to operate highly integrated bio-energy parks, while the supply deal will help Shell with its strategy of becoming a net-zero emissions energy business by 2050.
By making use of sugar-cane waste, Raizen’s second-generation ethanol (E2G) technology can produce about 50% more ethanol from the same amount of land. The new plants, the first of which is expected to begin production in 2025, will enable Raizen to provide significantly more low-carbon fuel without creating land-use competition with food crops.
Raizen expects to invest around USD1.5 billion in the plants, the last of which is expected to be operational by the end of 2027, at the latest.
We remind, Shell has acquired Singapore-registered waste oil recycling firm EcoOils via wholly-owned subsidiary Shell Eastern Petroleum for an undisclosed fee. This acquisition is part of Shell’s ambition to increase production of sustainable low carbon fuels for transport, including sustainable aviation fuel, it said in a statement. The deal includes all of EcoOils' Malaysian subsidiaries and 90% of its Indonesian subsidiary, Shell said.