Shell stakes green future on sugar biofuel in $2bn Brazil venture

The oil major has signed an agreement to form a new company with Cosan, a Brazilian industrial group.

Cosan will provide $5bn of its assets, including all its production facilities and an ethanol-trading unit, while Shell will contribute $2bn in cash, 2,740 service stations, and stakes in two green technology businesses. The 50-50 joint venture will assume Cosan’s $2.5bn of debt.

The two companies want to increase production at Cosan’s mills from 2bn to around 5bn litres of ethanol, exporting the fuel beyond Brazil’s relatively mature market.

“This venture represents the best entry of scale into sustainable biofuels,” Mark Williams, head of Shell’s downstream business. “It is the biggest move into biofuels of an international oil company.”

Telegraph