Why Yara Fertilizantes is betting on Brazilian biomethane

Yara Fertilizantes is betting on biomethane to decarbonize its production of nitrogen fertilizers in Brazil.

The aim is to replace natural gas with biofuel in the process to obtain green ammonia.

The company is already receiving loads of biomethane from Raízen at its fertilizer plant in Cubatão, in São Paulo state. 

“This is the future, one of the great opportunities we see in the country,” Yara Industrial Solutions CEO Jorge Noval told BNamericas. 

He said that this strategy creates a virtuous circle, generating extra income for farmers for the use of biogas. 

In addition to pig farming, another source of biofuel is the vinasse resulting from production of ethanol using sugarcane. 

“Nobody has the scale that Brazil has in agribusiness, particularly with regard to the sugar and alcohol industry,” said Noval. 

Besides fertilizers, another potential consumer of biomethane is the chemical industry, contributing to the reindustrialization sought by the federal government. 

“We’re discussing it with different companies, and I believe it will happen. I don't understand why it's taking so long. It's additional revenue for agribusiness, and an opportunity for the chemical industry and for Brazil to reindustrialize,” said the executive.  

There are, however, various obstacles to be overcome. 

“We need more biomethane production in Brazil” said Noval, noting that the short-term situation in the domestic gas market is “worrying” due to the high cost of the fuel. 

On another front, Yara is studying green hydrogen projects with Petrobras. In February, the company signed a master agreement with Petrobras to structure a potential partnership in the area.

For Noval, the regulatory framework for green hydrogen, approved in July by the national congress, is a step in the right direction.

“I think a carbon trade and carbon tax system could also help decarbonize the Brazilian economy more quickly,” he suggested.

The parliament is currently debating a bill (PL 182/2024) to create a regulated carbon market in Brazil.