Shell and Cosan launched Raízen, their multi-billion dollar joint venture to produce ethanol made from sugar cane. (Earlier post.) The major retail and commercial fuels company will operate in Brazil. Raízen will produce and sell more than 2 billion liters (528 million gallons US) of sugarcane ethanol per year.
Raízen will distribute biofuels and more than 20 billion litres of other industrial and transport fuels annually through a combined network of nearly 4,500 Shell-branded service stations. In Brazil it becomes the third largest fuels company. Plans would extend the company’s reach in future years to export more ethanol to other key markets.
Shell is already one of the largest distributors of sustainable biofuels: now it is moving for the first time into production. The deal with Cosan is a major development in Shell’s strategy of investing for selective growth in its fuels business.
The joint venture combines Shell’s expertise and technology partnerships in advanced biofuels with Cosan’s experience in the commercial production of low-carbon biofuels. This has the potential to accelerate the commercial production of biofuels from crop waste and inedible plants, the partners said.
Raízen’s 24 mills can process up to 62 million tonnes of cane into sugar or ethanol each year, with the flexibility to adapt to market demand.
We are building a leading position in the most efficient ethanol-producing country in the world. Low-carbon, sustainable biofuels will be increasingly important in the global transport fuel mix.—Peter Voser, Shell CEO
Biofuels make up around 4% of transport fuel in Europe, and 3% in the USA. Globally biofuels currently meet around 3% of road-transport fuel demand. Shell expects this to rise to about 9% by 2030.
Brazil leads the world in the use of biofuels for transport. They are likely to make up more than 40% of the country’s transport fuel mix by 2030, double today’s proportion. Raízen's current annual production capacity will be enough to meet nearly 9% of Brazil’s current ethanol demand.
|Carbon intensity (CI) of Brazilian sugarcane ethanol—the California view|
|Shell says that ethanol made from Brazilian sugar cane produces around 70% less CO2 than gasoline, when the cultivation and production processes are taken into account.|
|According to the California Air Resources Board (ARB) carbon intensity lookup tables for gasoline and fuels that substitute for gasoline, ethanol derived from Brazilian sugarcane with average production process, mechanized harvesting and electricity co-product credit has a direct emissions carbon intensity value of 12.40 gCO2e/MJ, compared to 95.86 CO2e/MJ for CARBOB gasoline (based on the average crude oil delivered to California refineries and average California refinery efficiencies)—an 87% reduction.|
|ARB’s CI is a full lifecycle measure of the greenhouse gas emissions associated with the production, transport (to California), storage, and use of a fuel.|
|Factoring in land use or other indirect effects adds 46 gCO2e/MJ, raising the total to 58.40 gCO2e/MJ—a 39% reduction.|
|Brazilian sugarcane using average production processes (no mechanized harvesting, no electricity credit) raises the direct emissions to 27.40 gCO2e/MJ, and the total to 73.40 gCO2e/MJ. These equate to a 71% and a 23% reduction, respectively, compared to CARBOB gasoline.|
At the pump Brazilian motorists are offered the choice of pure ethanol or a blend of gasoline and ethanol. Around 90% of the country’s new cars can run on either fuel type.
Brazilian sugar cane yields 7,000 liters of ethanol per hectare of cane compared to, for example, 3,800 liters for a hectare of corn in the USA and 2,500 liters for a hectare of wheat in Europe, according to Unica, the Brazilian sugar-cane industry association.
By-products from turning sugar cane into ethanol are recycled as organic fertilizer. Plant waste, called bagasse, is burned to produce power for the processing mills and surplus energy is supplied to the national grid.
To further improve productivity, Raízen will use its own advanced geographical information system to monitor its land. This allows its scientists to make accurate predictions about crop yields and adjust fertilizer or pest control, for example, to help boost production.
Brazilian sugar-cane ethanol is one of the most sustainable and lowest-CO2 biofuels available. We expect the development of advanced biofuels to benefit from Cosan’s feedstock and its expertise in large-scale biofuels production. This has the potential to accelerate the future commercial viability of cellulosic ethanol.— Mark Gainsborough, Shell Executive Vice-President Alternative Energies
The deal includes part of Shell’s interest in the firm Iogen, which uses enzymes to break down plant waste into ethanol, as well as Shell’s interest in Codexis, developers of super-enzymes for the faster conversion of plant waste into transport fuels.
Sustainable production. Raízen will work to improve the sustainability of its operations. Sugar cane for ethanol requires little water to be added because Brazil’s tropical rainfall provides natural irrigation. In the industrial process Raízen has been introducing a system that recycles up to 90% of water used.
Raízen supports the development of varieties of sugar cane to suit regional climate and resist disease. To protect cane from pests, it breeds and releases natural predators, further reducing the use of chemical pesticides.
As a member of Bonsucro, formerly the Better Sugarcane Initiative, Raízen has joined with other producers, non-governmental organizations and other experts to establish an EU-approved certificate for sustainable sugar-cane production. This covers areas such as human rights and the impact of activities on biodiversity.
Raízen is working towards achieving certification for all ethanol produced by its own operations over the coming years. It also plans to have certified all ethanol produced from suppliers’ cane.
Current sugar-cane production in Brazil takes up 8.1 million hectares, around 0.9% of the country’s land. Government legislation forbids industries from entering sensitive areas such as rainforests or land needed for other food crops, and from displacing food crops into other sensitive areas. National laws also recognize the rights of indigenous communities and their claims to land ownership. The main sugar-growing areas are hundreds of kilometers from the Amazon rainforest.
Raízen is well advanced in phasing in mechanized harvesting, ahead of requirements due to come into force in the main Brazilian sugar-cane growing state of São Paulo in 2014. It already uses machines on around 64% of its suitable land (with a slope of less than 12%). CO2 emissions can be reduced because it avoids the need to burn the hard straw, a necessary step in manual cutting.