French company Veolia and Brazilian Braskem, the largest producer of thermoplastic resins in the Americas, will invest R$400 million in the generation of thermal power from a renewable source in the Northeastern state of Alagoas.
By signing a 20-year contract, the petrochemical company has ensured the supply of steam produced with eucalyptus biomass for the industrial complex in Marechal Deodoro, where it makes PVC, replacing the use of natural gas and reducing greenhouse gas emissions.
Most of the resources, about 90%, will be provided by Veolia. Braskem will make investments to adapt the industrial complex to the new technology, increasing by 25% the participation of renewable power in its operations in the state. “This is a structuring project because it transforms the power generation mix in Alagoas,” Gustavo Checcucci, head of energy at the Brazilian petrochemical company, told Valor.
The project in Marechal Deodoro will generate 900,000 tonnes of steam per year, reducing CO2 emissions by about 150,000 tonnes per year. This is likely to accelerate the progress of Braskem towards the goal of reducing greenhouse gas emissions by 15% in scopes 1 and 2 and achieving carbon neutrality by 2050.
This is the first foray by Braskem, which already uses electricity from renewable sources in its operations in the country, into thermal power produced from biomass. On Veolia’s side, it is the second project of this nature in Brazil, but the first that starts from eucalyptus. In Rio Grande do Sul state, the French group was already operating a thermoelectric plant powered by rice husk.
To make the project possible, Veolia had to guarantee access to eucalyptus by leasing the land where the plantations will be made. There was already a planted base in the region, which was key for the investment – the talks between Braskem and the French multinational began over three years ago.
“We have 25 industrial units in Brazil, but this is the first agroforestry project,” said Pedro Prádanos, the chief executive of the Brazilian subsidiary of Veolia. The company will be responsible for managing 5,500 hectares of eucalyptus plantation, designing the engineering project, building the biomass processing and steam production plants, and operating the project over the 20-year contract period.
Another challenge, according to the executive, was to ensure the continuous supply of steam for the complex to operate uninterruptedly – a demand of the petrochemical operation in general. To this end, Veolia will put in place a proprietary digital solution, Hubgrade, which makes it possible to monitor and analyze operations in real time, with continuous improvement in performance and energy consumption.
During the construction phase, more than 400 direct jobs will be created. After the start of operation, there will be 100 new jobs. The operation is planned to start in 2023. Both Braskem and Veolia can use their own resources to finance the project, but they are also evaluating financing lines available in the market.
According to Mr. Checcucci, the eucalyptus biomass project adds a new source of renewable energy to the company’s generation mix and the company plans to expand its use. According to Mr. Prádanos, Veolia will also study opportunities of replicating the project in other states and may partner with Braskem in other efforts.
Since 2018, the Brazilian petrochemical company has already signed four partnerships for renewable power generation in the country and maintains its bet on the transformation of the power mix as one route to achieve carbon neutrality in 2050. This industry, in general, is engaged in energy transition initiatives because of the more competitive costs of renewable energy and the goals of reducing carbon footprint – which further down the road will represent costs to companies.
Source: Valor International