In the south of the northern state of Roraima, land costs one seventh of real state in other large centers of agricultural production in Brazil. In spite of that, when flying over it, it is possible to see areas that have been open for decades and have been abandoned due to lack of resources. They are holes in the middle of the Amazon biome.
Brasil BioFuels (BBF) will use this degraded land to cultivate palm and produce oil — which will later be transformed into 500,000 cubic meters of green diesel (HVO) and sustainable aviation fuel (SAF) in the biorefinery that is being built in the Manaus Free Trade Zone, with planned investments of R$2 billion.
Vibra Energia, formerly BR Distribuidora, will have exclusive access to this production for five years, and may renew the agreement for another five years. Leader in the Brazilian fuel market in general, the company intends to start distributing these biofuels between 2025 and 2026.
In a one hour and twenty minute flight between Manaus, the capital of Amazonas state, and São Luís, in Roraima, for example, a single engine burns 320 liters of aviation kerosene and releases carbon into the air. Aviation accounts for 2% of global carbon dioxide emissions — 915 million tonnes, out of a total of 43 billion.
It was because of this demand that Brasil BioFuels raised to R$2 billion from R$1.8 billion its investment in biofuel production. Besides the production of HVO, announced in November, the extra resource will guarantee technology to produce SAF, which emits up to 90% less pollutants than aviation kerosene.
Brasil BioFuels opted to verticalize palm production in São João da Baliza, a municipality neighboring São Luís, unlike the strategy it adopted in Pará, where it has about 70,000 hectares planted and partnerships with family farmers. In the south of Roraima, the company will plant 20,000 hectares this year and intends to reach 120,000 by 2026. With this, the expectation is to capture 600,000 tonnes of carbon dioxide per year.
BBF grows the seeds in small pots, called pre-beds. They count on a strict control of humidity and other needs for a good development. In the nursery BBF uses irrigation but subjects the plants to temperatures and winds similar to those in the field. Then the palms are transferred to the final planting area. The cycle from planting to harvesting is about four years.
The option for the palm is mainly due to its high productivity: it is estimated that it produces seven times more oil in volume than soy. “It is a paradigm break in relation to biofuels in the Center-South. The sugarcane cycle lasts seven months, while the palm yields the whole year”, says the CEO of BBF, Milton Steagall.
The palm’s agricultural zoning allows its cultivation in areas that were deforested until the end of 2007. This means that there are 31 million potential hectares, much more than what BBF plans to occupy.
The palm oil will be transported in biofuel-powered trucks to the Manaus Free Trade Zone, where the industry has tax exemptions. “And the largest consumers of diesel are concentrated in the Amazon,” says Dionisios Vossos, from BBF’s Business Development area.
Since part of the area opening in the Amazon biome happened after 2008, BBF is studying a way not to leave holes. For this, the plan is to cultivate cocoa and sell it to chocolate industries.
It is not yet clear what the demand for these biofuels will be, but the Carbon Offsetting and Reduction Scheme for International Aviation (Corsia) already foresees voluntary CO2 reductions starting in 2025 and mandatory after 2027. Executives from Azul, Gol and Latam airlines followed the presentation of BBF and Vibra.
“It’s not just a desire to be sustainable. In a while, it’s going to be mandatory. If this work doesn’t start now, things are going to get complicated later on,” said one of these executives, who spoke on the condition of anonymity.
HVO has advanced at a faster pace than ethanol and biodiesel, according to Marcelo Bragança, Executive Vice President at Vibra. “It is more stable, easy to use. Technically, it can be used in any proportion. But biodiesel presents some problems after a certain level of mixture”, he says.
The government is expected to soon send to Congress a suggestion for a mandate for green diesel. The proposal will be based on decarbonization metrics, instead of a percentage of mixture, as in biodiesel. The idea is that emission reductions will be between 1% and 10%. The text is at the Chief of Staff Office and may be altered before going to Congress.
The CEO of Vibra, Wilson Ferreira Junior, is confident that the Brazilian market for these products will grow significantly in the coming years. Asked about the carbon credit market, he said only that these are gains for the future, and that the focus now is to obtain cheap biofuels.
If everything goes wrong, Vibra says it will be possible to export the surplus. The volume of HVO and SAF supplied by BBF will represent only 2% of Vibra’s demand. If the production announced by the company were to stay in the North region to replace diesel and aviation kerosene, it would only meet 25% of demand — the global market for aviation fuel reaches 360 billion cubic meters of kerosene per year.
Mr. Steagall says that the structure allows to double production, to 1 billion cubic meters, in a year and a half, if Vibra wants so. However, BBF will only expand production if new agreements are closed, since sales contracts help in obtaining credit. Brazil’s development bank BNDES was invited to visit the project.
Founded in 2008, BBF operates in five states in the North region, where it employs more than 6,000 people. The company has 18 thermoelectric plants in operation and 18 under implementation, three palm oil crushing industries and a biodiesel industry.
Vibra, in turn, is a licensee of the Petrobras brand and has 8,300 service stations in all regions of the country. The company has more than 18,000 customers in various segments, such as transportation, trade, chemicals, and agribusiness. The BR Aviation brand holds 70% of the aviation market.
The journalist traveled at the invitation of BBF and Vibra
Source: Valor International