Brazil & US to produce Biodiesel

Brazil has been the world’s largest producer of ethanol from sugar cane for nearly three decades and the country has more than 30,000 filling stations that market the biofuel. U.S. Company Amyris Biotechnologies and Brazilian sugar and ethanol group Crystalsev have formed a joint venture to produce and sell the first commercial diesel made from sugar cane instead of oilseeds like soy and canola. In sugar cane, Melo said, “Brazil has the most sustainable and economic raw material,” adding the new diesel will be competitive as long as crude oil remains above $60 a barrel. The first commercial production unit will be built in partnership with one of Brazil’s most advanced sugar and ethanol mills, Santa Elisa — owned by Crystalsev’s major shareholder, Santelisa Vale — in Sao Paulo state. The mill will supply 2 million tonnes of cane a year to the plant, which is expected to come on-line in 2010 and produce 10 million gallons of biodiesel in the first year of operation. Total production within the first five years of operation is expected to reach 1 billion gallons, including the first plant and other units to be built. Amyris is negotiating with Brazil’s National Petroleum Agency to get permission to market the new product. Brazil launched in January a biodiesel program that now mandates a 2 percent blend in all retail diesel. The blend will rise to 3 percent on July 1 and to 5 percent by 2013. Brazil is the world’s largest cane ethanol producer and is forecast to harvest a record cane crop of about 550 million tonnes this season.

The companies did not specify the investment at the initial plant but said costs to build a diesel plant next to a regular sugar and ethanol mill would be of around $20-$30 million.
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