Shell and Raízen sign cellulosic ethanol deal
Type of post: NEWS IN BRIEF.
Shell has agreed to buy a total of 3.25 billion litres of sugar-cane cellulosic ethanol under a long-term agreement with Brazil’s Raízen. The low-carbon fuel is expected to be produced by five plants that Raízen plans to build in Brazil, bringing its total portfolio of cellulosic ethanol facilities to nine.
Press release: "Shell and Raízen sign large cellulosic ethanol deal", 07/11/2022.
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Under the agreement, Shell Trading Rotterdam will buy the cellulosic ethanol produced during the first 10 years of each new facility’s operational life. Raízen will supply cellulosic ethanol with a carbon intensity that is approximately 75% lower than gasoline. Raízen 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. Shell would continue to receive sugar cane cellulosic ethanol from that plant until 2037.
Shell contributed the cellulosic ethanol technology during the formation of Raízen, a joint venture with Cosan SA, in 2011. Since then, Raízen has developed and scaled-up the process for making low-carbon intensity ethanol from sugar-cane waste. The new plants will enable Raízen 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. 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 Raízen to provide significantly more low-carbon fuel without creating land-use competition with food crops.
