Brazilian biofuels update
Yesterday's announcement of a 30 year ethanol supply agreement between Brazilian producer Sao Martinho and Japan's Mitsubishi Corporation (earlier post), was echoed today by a cooperation agreement between a major northeast Brazil sugarcane group, Farias, who signed a protocol of intentions with a handful of Chinese investors to build ethanol mills that could process up to 10 million metric tons of sugarcane per harvest. Meanwhile, more details have emerged on the partnership between Italy and Brazil, in which both countries plan to kickstart a biofuel industry in Africa, starting with Angola and Mozambique, two countries with a very large bioenergy potential. Finally, during his visit with President Bush later this weekend, President Lula will urge the US to reform its tariff and subsidy rules on biofuels. Like Prodi, the two leaders will discuss collaboration on biofuel projects in Africa.
China enters Brazil
According to a report referred to in Valor Economico, the investments could hit 1.2 billion Brazilian reals (€436/US$582 million), with two greenfield projects currently being analyzed in the northeast state of Maranhao.
The Chinese companies interested in investing in Brazilian ethanol mills reportedly are Jilin Fuel Ethanol - a joint venture between the China National Petroleum Corp (CNPC), China Resources Enterprises Ltd and Jilin Grain Group -, Henan Tianguan, Anhui Fengyuan Bio-Chemical, and Heilongjiang China Resources Jinyu, who together produce 1 billion liters of ethanol per year.
The Farias group - with headquarters in the key northeast cane state of Pernambuco - currently has five operational mills, and a new Goias mill expected to enter operation for the 2007-08 harvest. The group crushed roughly six million metric tons of cane last season.
By 2010, the Farias group plans to hit a crush capacity of just under 15 million metric tons, and by 2015, it expects to process 32 million ton of cane.
Italy to cooperate, focus on African countries
Meanwhile, Italian Premier Romano Prodi is visiting with Brazilian President Luiz Inacio Lula da Silva and both will try to strike a partnership on producing ethanol and biodiesel. Details about the deal which also includes cooperation on biofuels in Africa (earlier post), have now emerged.
After meeting with the powerful Sao Paulo Federation of Industries on Monday, Prodi announced that Brazilian and Italian energy companies will likely build four biodiesel plants in Brazil at a cost of €360/US$480 million.
The premier, who will meet with Silva in the capital of Brasilia today, did not mention any possible ethanol projects, but the Brazilian president said on his biweekly radio program that "Italy is willing to engage in a partnership with Brazil in the area of ethanol and biodiesel production to help African countries."
Prodi also said he thought a deal would be reached to name Angola as the first African country where the nations will team up on biodiesel. Angola has a very large sustainable bioenergy potential (earlier post). Petrobras downstream director Roberto Costa said Eni officials also showed interest in the construction of biodiesel and ethanol plants in Mozambique, an equally promising country (earlier post):
biomass :: bioenergy :: biofuels :: energy :: sustainability :: biodiesel :: ethanol :: China :: Italy :: US :: Angola :: Mozambique :: Africa :: Brazil ::
European Union leaders have agreed to produce 20 percent of their energy from renewable sources such as cane ethanol by 2020, and Italy does not have the capacity to do that alone, Prodi said.
Italy's move to renewable fuels requires structural changes, making Brazil an obvious ally, Prodi said. The partnership between Brazil's state-run oil company Petroleo Brasileiro SA and Italian energy company Eni SpA will focus on biodiesel plants in Brazil and Africa to export the fuel to Italy, a Petrobras executive said last week.
The Italian government has a stake of about 30 percent in Eni, while the Brazilian government owns 60 percent of Petrobras.
US - Brazil cooperation in Africa, tariffs
Brazilian President Lula da Silva is visiting the US this weekend, and plans to talk with Bush about the possibility of a joint Brazil-U.S. effort to help poor African countries start producing biodiesel and ethanol. Brazil already has a dedicated task-force in Accra, Ghana, to promote the biofuel industry on the African continent (earlier post)
The Brazilian leader will meet with Bush Saturday, less than a month after the American president visited Silva in Brazil, where the two forged an ethanol alliance aimed at promoting the fuel and reducing international dependance on fossil fuels.
Bush and Silva argued earlier this month that alternative fuels lead to more jobs, a cleaner environment and greater independence from the oil market. In Brazil, nearly eight in 10 new cars already run on fuel made from sugar cane. Ethanol in the United States is made from corn.
The U.S. and Brazil also want to create global ethanol quality standards so the fuel can be traded as a commodity, like oil.
But Brazil and the U.S. remain at odds over the 54-cent-a-gallon U.S. tariff on imports of Brazilian ethanol. Lula da Silva didn't mention the tariff during his bi-weekly radio interview at home, but he expected to bring it up during his visit.
The tariff discussion is part of a larger debate on World Trade issues, in particular the attempts to revive the stalled Doha Round.
China enters Brazil
According to a report referred to in Valor Economico, the investments could hit 1.2 billion Brazilian reals (€436/US$582 million), with two greenfield projects currently being analyzed in the northeast state of Maranhao.
The Chinese companies interested in investing in Brazilian ethanol mills reportedly are Jilin Fuel Ethanol - a joint venture between the China National Petroleum Corp (CNPC), China Resources Enterprises Ltd and Jilin Grain Group -, Henan Tianguan, Anhui Fengyuan Bio-Chemical, and Heilongjiang China Resources Jinyu, who together produce 1 billion liters of ethanol per year.
The Farias group - with headquarters in the key northeast cane state of Pernambuco - currently has five operational mills, and a new Goias mill expected to enter operation for the 2007-08 harvest. The group crushed roughly six million metric tons of cane last season.
By 2010, the Farias group plans to hit a crush capacity of just under 15 million metric tons, and by 2015, it expects to process 32 million ton of cane.
Italy to cooperate, focus on African countries
Meanwhile, Italian Premier Romano Prodi is visiting with Brazilian President Luiz Inacio Lula da Silva and both will try to strike a partnership on producing ethanol and biodiesel. Details about the deal which also includes cooperation on biofuels in Africa (earlier post), have now emerged.
After meeting with the powerful Sao Paulo Federation of Industries on Monday, Prodi announced that Brazilian and Italian energy companies will likely build four biodiesel plants in Brazil at a cost of €360/US$480 million.
The premier, who will meet with Silva in the capital of Brasilia today, did not mention any possible ethanol projects, but the Brazilian president said on his biweekly radio program that "Italy is willing to engage in a partnership with Brazil in the area of ethanol and biodiesel production to help African countries."
Prodi also said he thought a deal would be reached to name Angola as the first African country where the nations will team up on biodiesel. Angola has a very large sustainable bioenergy potential (earlier post). Petrobras downstream director Roberto Costa said Eni officials also showed interest in the construction of biodiesel and ethanol plants in Mozambique, an equally promising country (earlier post):
biomass :: bioenergy :: biofuels :: energy :: sustainability :: biodiesel :: ethanol :: China :: Italy :: US :: Angola :: Mozambique :: Africa :: Brazil ::
European Union leaders have agreed to produce 20 percent of their energy from renewable sources such as cane ethanol by 2020, and Italy does not have the capacity to do that alone, Prodi said.
Italy's move to renewable fuels requires structural changes, making Brazil an obvious ally, Prodi said. The partnership between Brazil's state-run oil company Petroleo Brasileiro SA and Italian energy company Eni SpA will focus on biodiesel plants in Brazil and Africa to export the fuel to Italy, a Petrobras executive said last week.
The Italian government has a stake of about 30 percent in Eni, while the Brazilian government owns 60 percent of Petrobras.
US - Brazil cooperation in Africa, tariffs
Brazilian President Lula da Silva is visiting the US this weekend, and plans to talk with Bush about the possibility of a joint Brazil-U.S. effort to help poor African countries start producing biodiesel and ethanol. Brazil already has a dedicated task-force in Accra, Ghana, to promote the biofuel industry on the African continent (earlier post)
The Brazilian leader will meet with Bush Saturday, less than a month after the American president visited Silva in Brazil, where the two forged an ethanol alliance aimed at promoting the fuel and reducing international dependance on fossil fuels.
Bush and Silva argued earlier this month that alternative fuels lead to more jobs, a cleaner environment and greater independence from the oil market. In Brazil, nearly eight in 10 new cars already run on fuel made from sugar cane. Ethanol in the United States is made from corn.
The U.S. and Brazil also want to create global ethanol quality standards so the fuel can be traded as a commodity, like oil.
But Brazil and the U.S. remain at odds over the 54-cent-a-gallon U.S. tariff on imports of Brazilian ethanol. Lula da Silva didn't mention the tariff during his bi-weekly radio interview at home, but he expected to bring it up during his visit.
The tariff discussion is part of a larger debate on World Trade issues, in particular the attempts to revive the stalled Doha Round.
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