Mills seek certification to qualify as suppliers of raw materials for sustainable aviation fuels
04/12/2024
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Ricardo Carvalho — Foto: Divulgação/Daniela Toviansky
Brazil is expected to start exporting ethanol to the sustainable aviation fuel (SAF) industry this year. The volumes will still be small because, for now, there is only one SAF plant in the world focused on this technological path. However, according to Brazilian mills’ assessment, this market is expected to pick up steam starting in 2027. In addition, industry executives expect that 20% to 30% of all SAF that will be demanded by the end of this decade will be produced from ethanol.
Bioenergy company Raízen, a joint venture between Shell and Brazilian energy company Cosan, estimates that there is potential for the global ethanol industry to supply between 9 billion and 12 billion liters per year to the SAF industry by 2030, which would meet up to 30% of expected production.
Brazil may not be the sole supplier, but it has the potential to become the primary one, given that it represents half of the global ethanol trade. In addition, the SAF industry prioritizes renewable sources, which favors Brazilian sugarcane ethanol over U.S. corn ethanol, said Raphael Nascimento, trading business development director at Raízen.
Ricardo Carvalho, BP Bunge’s commercial director, projects that Brazil will have the capacity to supply 5 billion liters of ethanol per year to the SAF industry within a decade. For comparison, he said that this projected volume of growth in national fuel consumption aligns with the expected increase in the Brazilian fleet.
The aviation industry’s primary strategy to reduce carbon emissions is the substitution of fossil fuel with sustainable fuel, which features identical molecules and does not necessitate engine modifications.
The agreement led by the International Air Transport Association (IATA) provides that airlines will have to reduce emissions from all their international flights starting in 2027. This means that the SAF industry will already have to secure the necessary supply by then. The sector, which accounts for 2% of the planet’s greenhouse gas emissions, bets that SAF will guarantee 65% of its decarbonization.
Ethanol is not the sole eligible raw material for SAF production and will face competition from seven pathways, including the more established vegetable and waste oils (HEFA) pathway in Europe. IATA studies, however, indicate that ethanol tends to be the most competitive option. A document from 2022 released by the organization indicated that, at that time, ethanol had the lowest minimum price required for sale, alongside fats, one of the HEFA options.
The first alcohol-to-jet (ATJ) SAF plant was inaugurated by LanzaJet in January in Georgia, U.S. Mr. Carvalho of BP Bunge mentioned that it may begin importing Brazilian ethanol to fulfill its demand.
The U.S. wants to produce 11 billion liters of SAF by 2030 and is likely to be the main short-term market for Brazilian ethanol for SAF. Another potential market is Japan, which last year set a goal of mixing 10% SAF with fossil kerosene by 2030. In Brazil, there haven’t been any announced investments in SAF plants using the alcohol-to-jet process yet. However, companies like Raízen and ethanol trader Copersucar are already internally discussing the possibility.
According to Mr. Carvalho, the construction of SAF plans using the ATJ process will begin to increase next year, as the concept of the LanzaJet plant is demonstrated. However, significant scale gains are expected to take place only by 2027.
Brazilian mills, such as Raízen and BP Bunge, are seeking certification to supply ethanol to this industry—all, so far, from sugarcane. São Paulo’s Zilor also wants to advance in this market and has already certified 90% of the sugarcane of two of its three units. As a result, it ensured the capacity to serve the SAF sector with up to 300 million liters of ethanol per year.
Fabiano Zillo, CEO of Zilor, suggests that the new demand from SAF could potentially fill any gap that may arise due to the transition of part of the automotive fleet from combustion vehicles to electric vehicles.
In Mr. Carvalho’s assessment, sugarcane ethanol has more potential to meet the demand of SAF than corn, given its proximity to ports, which facilitates exports to promising markets, and due to the greater ease of tracking biomass, which guarantees a greater volume of ethanol eligible to serve the market.
Mr. Nascimento of Raízen argues that there is room to increase the production of sugarcane ethanol to meet the new market. According to him, if the sugarcane area in Brazil (10 million hectares) doubles, the supply of ethanol would triple since the focus of the mills would not be sugar.
He also believes that sugarcane will not be the only source. Corn ethanol “still has a journey to reach the minimum of carbon capture” and meet IATA requirements, he said.
*Por Camila Souza Ramos — São Paulo
Source: Valor International