May 10, 2010
Petrobras Announces Plans to Establish Another Biofuel Project
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Petrobras, Brazil's largest company, recently announced their plans to build a biodiesel plant in the state of Para in the eastern Amazon Region that uses palm oil as the feedstock. The total investment is R$ 330 million, of which R$ 240 million will be devoted to the palm oil plantations and R$ 90 million for the industrial part of the project. Two oil extraction plants are scheduled to be built along with a co-generation electrical plant as well. Once operational, the project will produce 120 million liters of biodiesel per year for consumers in northern Brazil. Biodiesel production is scheduled to begin in July 2013.
This year they are acquiring seeds to produce 1.1 million palm seedlings which they will start planting in December of 2011. The first harvest is expected to occur starting in 2014. The palm oil plantations will be established in regions that have already been deforested and are heavily eroded. It's all part of the government's plan to increase agricultural production in regions of the country that have already suffered environmental degradation due to deforestation. Instead of opening up new areas for expanded production, the government is pushing for expansion into areas that could actually benefit from well managed agricultural enterprises.
Petrobras has been aggressively moving into both ethanol production as well as biodiesel production. They are building new ethanol plants, purchasing existing operations, and trying to diversify the feedstock used in biodiesel production. Approximately 80% of the current feedstock for biodiesel production is soybean oil and the government has been pushing for increased production of other vegetable oils such as palm oil.