Petrobras says given go-ahead to build its first biodiesel plants

Petrobras says given go-ahead to build its first biodiesel plants
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... 22Sep2006 Brazilian state-controlled oil company Petrobras said Friday it has received environmental licenses to build its first batch of biodiesel plants that ...
Brazilian state-controlled oil company Petrobras said Friday it has
received environmental licenses to build its first batch of biodiesel plants
that are part of the the company's broad renewable fuels plan.

Its objectives include making 855 million liters biodiesel/year by 2011
and also becoming the world's top ethanol exporter.

Petrobras said, in a statement, it received environmental authorization
to build a biodiesel plant in Quixada, Ceara State. In addition, Petrobras
said it has already obtained environmental approvals to build two more
biodiesel plants in the states of Bahia, also in the country's semi-arid
northeast region, and Minas Gerais.

To meet the goal of producing 855 million liters/year by 2011, Petrobras
is considering 15 new biodiesel plants in several regions of Brazil, with
partners ranging from large investment groups to rural worker unions, the
company added.

The first three plants, to be operational by the end of 2007, will
produce a combined 57 million liters/year of biodiesel from vegetable oils
such as cottonseed, soybean, castor, and palm, as well as animal fat,
Petrobras said.

Brazil has a mandate to add 2% biodiesel to its petroleum-derived diesel
fuel starting in 2008. The mandate is to increase to 5% by 2013, although the
government is studying moving up that target to 2010, the Energy Ministry said
earlier this month.

The 5% mandate would require at least 2.4 billion liters of biodiesel in
Brazil when it comes into force, based on current diesel demand. Brazilian
biodiesel makers are quickly lifting production capacity. According to an
Energy Ministry presentation earlier this month, even before Petrobras enters
the biodiesel production market, biodiesel plants will reach capacity of
around 800 million liters/year by the end of 2006.

To date, Petrobras has been buying biodiesel from several plants run by
farmer groups that began producing last year, mostly in the northeast.
Petrobras also unveiled plans this year to begin adding soybean oil to its
conventional hydrocracking process in some of its refineries, to make a diesel
fuel that contains part vegetable oil. The technology, known as H-Bio, will
begin commercial production by the end of the year, Petrobras said
earlier.

Meanwhile, while Petrobras says it has no plans to move into the
production side of Brazil's sugarcane ethanol business, the company said it
plans to export around 3.5 billion liters/year of the gasoline additive by
2011, potentially making Petrobras into the world's largest ethanol exporter.
Last year, Petrobras exported about 40 million liters of ethanol.

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