Petrobras reduces 20-plant project with Mitsui to 3 as ethanol margins bite

In Brazil, Petrobras announced a slowdown in their expansion strategy as Japan struggles to expand ethanol demand. Earlier, the state oil company had announced plans to build 20 ethanol plants in Brazil in cooperation with Mitsui.

Now, the company is going ahead with only three pilot projects until Japan’s market growth rate becomes more clear.

The Mitsui project was announced in September, and involved twenty 50 MGy facilities.

Petrobras announced a similar deal structure for Korea last week. Petrobras established a joint venture with Samsung to cooperate in the production and marketing of ethanol. Petrobras projected that it will sell 80 to 105 Mgy of ethanol in South Korea per year.

South Korea has said it will increase the current B0.5 mandate will be increased annually by 0.5 to bring the nation to B3 in 2012. In addition, South Korea has extended biodiesel tax breaks until 2010.

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