Shell and Raizen sign large cellulosic ethanol deal

Shell has agreed to buy a total of 3.25 billion litres of sugarcane cellulosic ethanol under a long-term agreement with Brazil’s Raízen. The low-carbon fuel is expected to be produced by five plants that Raizen plans to build in Brazil, bringing its total portfolio of cellulosic ethanol facilities to nine.

Shell contributed the cellulosic ethanol technology during the formation of Raizen, a joint venture with Cosan SA, in 2011. Since then, Raizen has developed and scaled-up the process for making low-carbon intensity ethanol from sugar-cane waste. The new plants will enable Raizen to operate highly integrated bio-energy parks, while the supply deal will help Shell with its strategy of becoming a net-zero emissions energy business by 2050.

“Global demand for sustainable fuels is growing,” Andrew Smith, Executive Vice President for Shell Trading and Supply, said. “Combining Raízen’s innovative sugar-cane waste technology with Shell’s global distribution network and customer relationships will help to meet that demand.”

By making use of sugar-cane waste, Raízen’s second-generation ethanol (E2G) technology can produce about 50% more ethanol from the same amount of land. The new plants, the first of which is expected to begin production in 2025, will enable Raizen to provide significantly more low-carbon fuel without creating land-use competition with food crops.

Raizen expects to invest around $1.5 billion in the plants, the last of which is expected to be operational by the end of 2027, at the latest.

Ricardo Mussa, Chief Executive Officer of Raizen, said: “Large-scale production of sugar-cane based cellulosic ethanol will position Raizen as a leading global provider of waste-based, low-carbon fuels and feedstock to replace fossil fuels. The size of this deal underscores that our E2G technology has achieved commercial scale and is able to support our customers’ decarbonisation journeys around the globe.”

(Source: Press Release)


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