Chemical engineer Sá Parente “created biodiesel which is a motive of pride for all Brazilians” recalled President Rousseff in an official release underlining that “the discovery patented by Brazil, had a wide international acknowledgement and has had a decisive influence in the country’s future.”

His dedication to bio-diesel “produced from the raw material developed by thousands of farmers’ families contributed significantly to reduce rural poverty,” added Ms Rousseff.

Brazil is the world’s second largest producer of biofuels behind the US and has 74 plants with an annual capacity of six million cubic meters. Production in 2010 was 2.4 million cubic meters involving 276.000 small farmers.

But the issue is also controversial. Biofuels help save on fossil fuels and cuts drastically the emission of greenhouse gases which affect world warming and climate change. There are also benefits for farmers who can supply the market with a high value produce.

However biodiesel extracted from oilseeds and other grains has also triggered criticism since it contributes indirectly to increase the price of food items worldwide, as more farmland is dedicated to the production of biofuels.

The UN Food and Agriculture Organization has repeatedly warned that the production of biofuels puts pressure on food prices and could be responsible for as much as 60% of global increases.

Likewise biodiesel forces the expansion of the agriculture frontier which leads to deforestation and to exhaust soils.

Mercopress/BRAZZIL MAG

Tilapia entrails, not used as food, can be an important souce of biodiesel. (Photo: Stock File/FIS).

The Ceara Nucleus Foundation of Industrial Technology (NUTEC) is moving forward with a project that will transform it into a pioneer in the research of biodiesel production from tilapia entrails.

For Fernando Pedro Dias, a researcher at NUTEC, the advantage in producing this type of biodiesel is that it does not depend on the use of byproducts apt for food production, but rather on fish discards.

Within the framework of this project, the Biodiesel Reference Laboratory (LARBIO) is in charge of gathering, storing and producing the biodiesel.

“The research with tilapia arises as an alternative to using the raw material of fish that does not serve as food, ”Pedro Dias explained.

At present, biofuel use is extending because it is a clean, renewable and less polluting fuel.

The burning of biodiesel is more healthful for the environment because it is a biodegradable, non-toxic fuel that releases fewer chemical components that assault and jeopardise the health of people and the medium.

In addition, biodiesel has similar physic-chemical properties to those of diesel fuel, which is why it can be used in conventional motors with minimal modifications for adequate operation.

Biofuel can also be used in pure form or mixed with diesel fuel.

According to the experts, the only obstacle in producing this type of biofuel is the approval of the Biopeixe Project, necessary for the financing of the construction of a factory to extract fish oil from the entrails of fish.

According to LARBIO coordinator Jackson Malveira, the project was sent to the Northeast Bank of Brazil and it is in the phase of analysis.

An investment of BRL 500,000 is proposed (USD 278,000) to carry out the research and launch of the initiative, by part of the Funding Entity of Studies and Projects (FINEP).

A similar amount will be financed by the Government of Ceara, in an effort to facilitate the project’s set up.

“When the breeding of tilapia began in net-tanks in A çude Castanha, the problem arose of finding a destination for fish waste (entrails, among others), which did not have any use for producers in the beginning,” Malveira added.

Tilapia is the most cultivated fish in Brazil, and represents 38 per cent of national production.

The state of Ceara is the leading producer of tilapia in the country.

Source: FIS

Braskem expects to become the first commercial-scale producer of polyethylene made from a renewable source when a plant in Brazil begins producing the building block resin used in plastics at the Triunfo plant, said Leonora Novaes, Braskem’s commercial head for green polyethylene.

A second plant is likely to follow, if manufacturers show sufficient interest in the plastic, which will have the same characteristics as petroleum-based polyethylene but help reduce greenhouse gasses and meet consumer demand for more environmentally friendly products.

A new plant would take about three years to build.

The firm is studying possible locations for a second plant, including real estate in the center-south’s sugar cane heartland to have ready access to ethanol, the plastic’s raw material.

Ethanol will have to be transported over a long distance to reach the Triunfo plant in Rio Grande do Sul, Brazil’s southernmost state.

“Cane (ethanol) brings many advantages. Cane is very efficient at capturing CO2 in the growth process,” Novaes said in a presentation on the product at the opening of the three-day FO Licht Sugar and Ethanol Conference in Sao Paulo.

The firm has committed to selling 50,000 tonnes of the green plastic to Toyota (8015.T), a quarter of the 200,000 tonnes the Triunfo plant will produce initially.

Novaes said European firms had shown keen interest in the product and Braskem expected to export to the United States.

Demand appeared limited on the domestic market so far.

“It’s still a niche,” said Novaes, who said the 200,000 tonnes was less than 1 percent of total global polyethylene consumption. (Reporting by Peter Murphy; Writing by Reese Ewing; Editing by Walter Bagley)

Source: Reuters

SAO PAULO (Reuters) – Royal Dutch Shell plans to form an ethanol and fuel distribution joint venture worth up to $12 billion with Brazilian sugar and biofuel giant Cosan, becoming the latest global energy company to buy into one of Brazil’s fastest-growing industries.

The deal, announced on Monday, marks Shell’s first foray into ethanol production and follows moves by British oil company BP, which in 2008 took a stake in a big Brazilian biofuel project and unveiled $1 billion in investments.

Cosan shares jumped 12 percent in Sao Paulo, compared with a 1.1 percent gain by the benchmark Bovespa index. Shell shares rose 1.1 percent in London, outperforming a 0.3 percent rise in the Dow Jones European oil and gas index.

“It’s a vote of confidence from an oil major for the Brazilian ethanol industry,” said Jonathan Kingsman, managing director of the Lausanne-based Kingsman SA ethanol and sugar consultancy. “I expect more interest from the oil companies in Brazilian ethanol, both in production and distribution.”

The 50-50 joint venture will be the third-largest fuel distributor in Latin America’s largest country, with almost 4,500 filling stations nationwide. By joining forces, Cosan and Shell will be better positioned to compete with the two top players in the market, state oil giant Petrobras and Ipiranga, a unit of Brazil’s Grupo Ultra.

Cosan first branched out into the fuel distribution business in 2008 when it acquired U.S.-based Exxon Mobil Corp’s Esso chain of service stations for nearly $1 billion. Cosan also agreed in December to buy a local chain of filling stations called Petrosul for an undisclosed sum.

While the deal will not immediately add to Cosan’s existing cane crushing capacity of about 60 million tonnes a year, it will give it a deep-pocketed partner at a time when some of its smaller rivals are vulnerable to takeovers.

The companies hope to more than double ethanol output to up to 5 billion liters a year from about 2 billion now, Shell’s downstream director, Mark Williams, said in London, without giving a time frame. The increase would come from takeovers and organic growth, he added.

The deal is another feather in the cap of Cosan Chairman Rubens Ometto, whose family has been in the sugar business since 1936. On Ometto’s watch, Cosan went on an acquisition spree and expanded into fuel distribution and port terminals.

Ometto hopes to capitalize on Shell’s global clout to make ethanol a widely traded commodity.

“Brazil’s aim is to become an ethanol exporter. Shell has distribution facilities throughout the world that we could use in a much more integrated way,” Ometto said in Sao Paulo.

“This step will be very important to consolidate ethanol as a clean and renewable fuel … and help it become a global commodity.”

Oil companies and major global investors have been searching for partnerships in Brazil’s promising ethanol sector, which is still largely dominated by family companies with complex ownership structures.

Shell has been looking for opportunities in Brazil’s ethanol industry for years. About 90 percent of all new cars in Brazil are flex-fuel, running on any mix of ethanol and gasoline, making the country a huge market for biofuels.

Other foreign companies have also been delving into Brazil. U.S. agribusiness giant Bunge Ltd struck a deal in December to buy sugar and ethanol producer Moema for $452 million, while French commodities company Louis Dreyfus said in October it would take over the Santelisa Vale mill for an undisclosed sum.

COSAN EYES OVERSEAS MARKETS, TECHNOLOGY

The combined entity will have about 40 billion reais ($21.4 billion) in annual sales, Cosan Chief Financial Officer Marcelo Martins said on a conference call with analysts and investors.

For Cosan, the world’s largest sugar and ethanol producer, teaming up with Shell could give it access to a vast overseas distribution network and new technologies in ethanol production, an area where Shell has been investing. Shell’s network may help Cosan export more ethanol as output grows.

“We’ll have a partner with an absolutely huge international presence in fuels sales,” Martins said.

The so-called second-generation in ethanol production has yet to reach commercial scale, but some companies are betting on the use of cellulosic material such as bagasse or cane stalks and grasses to make biofuels, in part to move away from making fuel from foodstuffs.

Cosan, which recently obtained a court injunction to remove its name from a government black list of companies with workers in slave-like conditions, said it had 180 days to discuss the nonbinding memorandum of understanding exclusively with Shell International Petroleum Co Ltd.

As part of the transaction, Cosan will transfer its sugar, ethanol, fuel distribution and energy generation business to the merged entity, with assets valued at $4.93 billion and debt of $2.52 billion.

Shell will contribute its retail fuel and aviation distribution business, valued at up to $3 billion, and inject $1.63 billion into the merged company in up to two years.

Brazilian investment bank BTG Pactual advised Cosan on the transaction, while JPMorgan Chase advised Shell.

Cosan and Shell will have the option of buying each other’s stake in the venture after 10 years, with the price to be determined at the time of purchase.

Earlier on Monday, Cosan released its quarterly earnings for the three months ended December 31. It posted net income of 167.1 million reais, up sharply from 5.2 million reais a year earlier. ($1=1.87 reais)

Reporting by Elzio Barreto and Inae Riveras; additional reporting by Reese Ewing in Sao Paulo and David Brough, Nigel Hunt and Tom Bergin in London; editing by Todd Benson, Dave Zimmerman and John Wallace.

Source:  Reuters

State-run oil giant Petrobras (PETR4.SA)(PBR.N) and General Electric Co (GE.N), which helped design the plant, are betting that increased use of ethanol generation by green-conscious countries will boost demand for the product.

Brazil, the top global ethanol exporter, is already in talks with Japan to develop biofuels power generation there.

“We have great expectations to show the viability and economy of generating electricity from … an alternative feedstock to fossil fuels,” Maria das Gracas Foster, head of Petrobras’ natural gas division, said.

Petrobras with the help of GE upgraded the 87-megawatt power plant to switch between running on natural gas or ethanol instantaneously. Brazil primarily relies on hydroelectric power but needs backup thermoelectric generation during the dry season.

John Ingham, Latin America Products Director for GE, said tests showed switching the plant to ethanol reduced carbon dioxide emissions without lowering energy output.

GE has around 770 turbines like those used in the Juiz de Fora plant, including many in Japan, that could be converted to run on ethanol, he said.

“A plant like that consumes a lot of ethanol, so it has to be in a place that makes sense (such as) places that have no access to gas, like Japan, some islands, or places that depend heavily on diesel like the Amazon region,” he said.

Brazil is expected to produce a record 27.8 billion liters of ethanol in the 2009/2010 season. It began its biofuels program 30 years ago and now mandates a minimum 20 percent of ethanol in gasoline.

Petrobras itself is only starting to enter the ethanol market. Brazil’s ethanol production comes from sugar cane milled by companies such as Cosan (CZZ.N) or commodities giants including Cargill Inc [CARG.UL], Bunge (BG.N) and ADM Co (ADM.N).

Domestic demand for ethanol is being driven by the popularity of the flex-fuel car technology that was launched in 2003 and now makes up around 90 percent of new vehicle sales. (Writing by Brian Ellsworth; Editing by Marguerita Choy).

By Denise Luna

Source: Reuters