Local and foreign groups betting on Brazilian biofuels to cut emissions

Brazilian and foreign groups from numerous industrial sectors are investing in biofuel projects to reduce greenhouse gas emissions and step up their energy security. 

The initiatives mostly involve road transportation, but there are also cases of research for river, sea and aviation applications and commercial undertakings.

The highlight is biodiesel, thanks to the increase in the amount of biofuel in the local diesel blend. 

Currently under analysis in the national congress, the Combustível do Futuro (fuel of the future) federal bill outlines the gradual increase in the biofuel component of the blend over the next few years to 20% of the volume (B20) by 2030.

“Biofuels are a real option for Brazil and can play a central role in the strategy to decarbonize transport,” Rodolfo Taveira, director of the energy and natural resources area at consultancy Oliver Wyman, told BNamericas. 

For light vehicles, ethanol is the most mature option at present, but the growth in biomethane production could also fuel the fleet that currently runs on vehicular natural gas. 

“However, this would compete with the industrial use of biomethane, which could restrict the supply for transportation,” he said. 

According to Taveira, in heavy transportation there are more alternatives: biodiesel blended with fossil diesel, renewable diesel/green diesel (HVO), biomethane and even ethanol, depending on the technological development of engines.

For aviation, sustainable aviation fuels (SAF) are a concrete alternative, and their production via ethanol or biomass is a possibility for Brazil.

"In the case of maritime transport, methanol and ammonia are the alternatives that are maturing, without the former being able to use a biomass production route," the consultant added.

ROAD CASES 

Volkswagen Group’s truck manufacturer Scania and Casa Scania Brasdiesel recently launched the first 100% biodiesel (B100)-powered 6x2 truck on the market. 

The partnership involves Catto Transportes together with 3tentos, which will supply the carrier's B100 truck. The vehicle will start operating in May for the Amaggi Group. 

In December 2023, Scania and Brazilian biodiesel producer Grupo Potential began operating a biodiesel-powered truck in Paraná state. 

The pilot vehicle, manufactured in 2019, has a 95% reduction in carbon dioxide emissions, the main contributor to greenhouse gases.

“Brazil's potential to produce biodiesel from agricultural crops, given that the country is one of the global giants of agribusiness, shows us that we have an interesting path to explore,” Alex Nucci, solutions sales director at Scania Commercial Operations in Brazil, told BNamericas. 

“We can no longer rely solely on diesel and maintain it as our main fuel. That's why biodiesel is another alternative to diesel,” he added.

In November 2023, Brazilian food industry multinational JBS began a project to introduce the use of B100 biodiesel into its own fleet of trucks. 

The tests involve three vehicles from Dutch automaker DAF, running an average of 1,200km per day.

RIVER/MARINE TRANSPORT 

A company in the Amaggi group, Hermasa Navegação da Amazônia, is analyzing the possibility of fueling its river fleet operating in the north of the country with B100 biodiesel.   

Meanwhile, mining giant Vale is betting on biofuels to fuel its fleet of marine vessels. 

In November 2023, in partnership with Oldendorff Carriers, Vale began its first voyage with a biofuel-powered ore carrier.

The B24 biofuel used on the voyage between Rio de Janeiro and Asia was comprised of fuel oil and biodiesel produced from waste vegetable cooking oil. 

The initiative is part of the Ecoshipping program, an R&D initiative developed by Vale's shipping area to reduce greenhouse gas emissions from maritime transport.

A supplier of bunker fuels for shipping, Denmark's Bunker One conducted research in partnership with Universidade Federal do Rio Grande do Norte (UFRN) that concluded that the addition of 7% biodiesel to fossil fuel can be used without generating losses compared with the traditional bunker fuel.

The company is part of the decarbonization alliance for local ports, which will be formally launched on March 6. 

"Participating in the alliance is another step toward our goal of promoting an increasingly sustainable and environmentally friendly ship supply operation," Flavio Ribeiro, CEO of Bunker One Brasil, said in a release.

AVIATION 

Brasil BioFuels (BBF) is investing 2.2bn reais in a biorefinery in Manaus, Amazonas state, focused on HVO and SAF. 

The new aviation fuel will cut greenhouse gas emissions by around 90% and will make it possible to reduce sulfur emissions by up to 100%. 

Production capacity will be more than 280Ml/y from 2026.

The offtaker is Vibra Energia, the country's main fuel distributor and former retailer of Petrobras. 

The federal oil giant’s low-carbon budget for the period between 2024 and 2028 includes US$1.5bn for biorefining, involving renewable diesel and aviation biokerosene. 

BIOMETHANE 

In 2023, the L'Oréal Group in Brazil signed a contract with Urca Energia's Gás Verde to supply 3.6Mm3 of biomethane, which will be used to fuel 100% of the company's dedicated fleet. 

The filling station is located next to the Gaia distribution center, which is the company's second largest in Latin America. It will be the first firm in the cosmetics industry to use 100% renewable biofuel for its entire dedicated fleet. 

Gás Verde produces renewable gas from the treatment of solid urban waste from the Seropédica landfill in Rio de Janeiro state.

The company's other clients include Ambev, Ternium and Saint Gobain.

"We've seen a growing movement to decarbonize company fleets. Large companies in particular have ambitious decarbonization targets that need to be met and are demanding environmental solutions," Gás Verde CEO Marcel Jorand told BNamericas.

REGULATORY 

According to Anna Paula Góes, a partner at law firm Schmidt Valois Advogados, in order for the objectives of fuel for the future to be achieved, there must be broad alignment between the public administration bodies that will be responsible for implementing, regulating and/or improving the regulatory framework 

"There's no point, for example, in obtaining authorization from the ANP to produce biodiesel if the federal revenue service doesn't grant special registration for the activities of marketing and importing biofuel," Góes told BNamericas.

For Rodolfo Taveira, the fuel of the future program encourages the creation of demand by defining minimum levels of blending and use of certain biofuels, which should generate security for investments in production capacity.

“Today the main constraint is supply, with some biofuels lacking local production infrastructure, so the bill plays an important role providing an outlook,” he said.