Brazil’s Petrobras creates biofuels unit; aims to become largest biodiesel producer

In Brazil, the state oil giant Petrobras said that it will establish a biofuels subsidiary to centralize its biofuel production management. The new unit will supervise both biodiesel and ethanol production, although sales and logistics will continue to be supervised by the Petrobras supply division. The company has set a goal of becoming the largest producer of biodiesel in the country.

Petrobras said it will construct a new 193 Mgy “superplant” for biodiesel production, and will make biodiesel directly from seeds rather than oils. The new technology is being tested at a pilot plant in Guamare, Rio Grande do Norte state. Petrobras is already constructing three smaller plants that will each have a capacity of 15 Mgy. Total project investment for the four plants will be $300 million.

Petrobras previously announced that it will construct 10 new biodiesel plants between now and 2012. Total project cost for the 13 facilities was projected at $507 million and planned capacity at the time was anoucned at 225 Mgy.Petrobras commenced marketing biodiesel in the past few months, and the company has made sales to date of 41 Mgy, primarily in Rio Grande do Sul. Petrobras will market a total of 100 Mgy which is estimated to cover Brazil’s consumption of biodiesel for the first half of 2008. Brasil Ecodiesel has a 62 percent market share in the Brazilian biodiesel market.

The Brazilian government has targeted reaching a B5 biodiesel blend level by 2013. Brazil has set a B2 blending mandate effective in January 2008, and the director general at the National Petroleum, Natural Gas and Biofuel Agency (ANP), said that he expected that there would be enough biodiesel to cover more than twice the amount mandated.

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