Mubadala Capital’s Acelen has announced that it will invest $2.44bn (BRL12bn) over 10 years to make biofuels in Brazil. This work will begin in 2026.

The company signed a memorandum of understanding with the government of Bahia in Abu Dhabi on Saturday.

The new biorefinery, which the company plans to begin building in 2024, will have the capacity to produce one billion litres per year of hydrotreated vegetable oil, a diesel-like fuel dubbed “green diesel”. The biorefinery will make the fuel substitute without fossil fuels, from resources that come from vegetable oils and animal fats. Green diesel emits around 80% less carbon dioxide than fossil fuel diesel when burned.

The project will reinforce Brazil’s role as a strategic provider of renewable fuels by capitalising on its natural resources. The country already has the infrastructure in place to produce soy-based biodiesel and ethanol from sugar and corn.

The first phase of the new project will use soybean oil and complementary raw materials to produce biofuel in Brazil. These materials have the largest available volume in Brazil, Acelen said. The plant will require up to 900,000 tonnes of soy oil per year, with an additional annual consumption of 100,000 to 150,000 tonnes of corn oil and animal fat.

New biofuels in Brazil

Marcelo Cordaro, vice president of new business at Acelen, said the biorefinery will use the infrastructure at its Mataripe plant. This will include tankage and logistics, and the port terminal for the export of new fuels.

The second stage will use oil from the Macaúba tree, which is native to Brazil. The tree holds high energy potential, along with palm oil to generate renewable fuels. Planting of the trees required for this will begin in 2025. The company said it will plant an area of 200,000 hectares, and prioritise degraded land.

Acelen will also prioritise the production of green diesel and sustainable aviation fuel, first aimed at the foreign market. “We want to be a global player; we are starting to be big, we already have the competitiveness to operate abroad,” said Acelen’s vice-president of institutional relations, communication and ESG, Marcelo Lyra via Reuters.

“Obviously, the Brazilian market is developing and starting to encourage this type of fuel, so logically for us it would be interesting to participate in it.”

Acelen plans to build a sustainable hydrogen generation unit to hydrotreat fuels, with work on this planned to begin in January 2024.

According to a 2021 report by the International Energy Agency, approximately 70% of Brazil’s total renewable energy supply was made up of biomass energy.

Approximately 25% of transport fuels in Brazil also come from biofuels, a high percentage compared with most other countries. In 2019, the role of biodiesel was growing, representing 9.6% of diesel use in the country.