Petrobras’ New Biofuel Ambitions

Brazil’s state-owned energy company Petrobras is jumping into the biofuels game, aiming to become a major biofuel producer and transporter. It looks like a smart move, since government regulations will guarantee biodiesel demand in the coming years, and the country’s numerous ethanol producers don’t have the pipeline capacity to move their product. The strategy will boost Brazil’s biofuels industry and Petrobras’ bottom line, although its environmental benefits remain questionable.
Petrobras has largely steered clear of Brazil’s ethanol industry, because the country’s powerful sugarcane lobby is hotly opposed to the energy giant’s intrusion into its sugar and ethanol markets. President Luiz Inacio Lula da Silva is one of the industry’s biggest fans and is of no mind to cross paths with the big sugar producers. But ethanol producers need help if they are to continue accessing foreign markets. They lack the experience and infrastructure to transport ethanol from inland agriculture mills to ocean ports. Petrobras has experience moving liquids, and it hopes to export 500 million liters of ethanol next year and 4.75 billion liters in 2012. To achieve that goal, the federal company will have to increase its ethanol pipeline capacity. Trucking the product is too expensive.

Energy Tribune