Shell and ethanol producer Cosan have launched a multi-billion-dollar joint venture that will become a leading ethanol producer. It is the first time that Shell, a fuel distributor, will move into production. Named Raízen, the company will operate in Brazil, one of the world’s fastest-growing markets for biofuel. Raízen will produce and sell over two billion litres a year of ethanol made from Brazilian sugar cane, which it said is the lowest-carbon biofuel commercially available.
Raízen will distribute biofuels and over 20 billion litres of other industrial and transport fuels annually through a combined network of nearly 4,500 Shell-branded service stations. It will become the third largest fuel company in Brazil, with plans to extend ethanol exports to other key markets in the future. Raízen’s 24 mills can process up to 62 million tonnes of cane into sugar or ethanol each year, with the flexibility to adapt to market demand. Biofuels make up more than 20 per cent of Brazil’s current transport fuel mix, four per cent of transport fuel in Europe, and three per cent in the U.S. Global biofuels currently meet around three per cent of road transport fuel demand, but Shell expects this to rise by about nine per cent by 2030. Brazil’s fuel mixture is expected to be 40 per cent biofuel by 2030. Raízen’s current annual production capacity will be enough to meet nearly nine per cent of Brazil’s current ethanol demand.