Biofuels Shell and Cosan: Fuelling a Lower-carbon Future With Biofuels
Shell and Cosan recently have launched a multi-billion dollar joint venture that will become a leading producer of the low-carbon biofuel, ethanol made from sugar cane. Named Raízen, this major retail and commercial fuels company will operate in Brazil, one of the world’s fastest-growing markets.
The Hague/Netherlands – In one of the biggest biofuels deals to date, Shell is combining its extensive retail experience, global network and research in advanced biofuels with Cosan’s technical knowledge of producing biofuels on a large scale. Raízen will produce and sell over two billion litres a year of the lowest-carbon biofuel commercially available – ethanol made from Brazilian sugar cane.
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 company says.
Raízen will distribute biofuels and over 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.
Low-carbon biofuels will be the most practical and commercially realistic way to take carbon dioxide out of transport fuel in the coming years and will be a vital part of the future energy mix.
The joint venture also 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.
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,” says Peter Voser, Shell Chief Executive Officer. “Low-carbon, sustainable biofuels will be increasingly important in the global transport fuel mix.”
“This is a turning point in the search for alternative energy sources,” says Rubens Ometto Silveira Mello, Cosan’s Chairman of the Board. “Raízen is one of Brazil’s largest companies and is ready to offer international markets a clean, renewable and economically viable solution.”