Petrobras secures initial approval for 3rd biodiesel plant ...

Petrobras secures initial approval for 3rd biodiesel plant ...
BNamericas - Santiago,Chile
Brazil's federal energy company Petrobras (NYSE: PBR) has secured initial approval to build a biodiesel plant in Ceará state that could produce up to 19 ...

Brazil's federal energy company Petrobras (NYSE: PBR) has secured initial approval to build a biodiesel plant in Ceará state that could produce up to 19 million liters a year (Ml/y), a company spokesperson told BNamericas, elaborating on a statement.

Ceará's state environmental protection agency Sema approved the environmental impact study for the plant, which would be the company's third. Petrobras now needs to seek a full license.

Together the three plants would have capacity to produce 57Ml/y of biodiesel. Petrobras aims to start plant operations by the end of next year.

Petrobras already has started talks with small-scale farmers to acquire oil seeds such soybean, cotton, palm and castor to process in the plant.

The company plans to increase biodiesel production to guarantee supply of 855Ml/y by 2011 to meet rising demand. The government will require a 2% admixture of biodiesel from January 2008-January 2013, when the admixture will increased to 5%.

POLITICAL IMPACT

Many consider biodiesel programs to be one of President Luiz Inácio Lula da Silva's successes as they could help reduce pollution in city centers and ensure self-sufficiency in oil.

The program also is popular in some rural areas as the government gives tax breaks to companies that buy oilseeds from small-scale farmers.

Brazil's federal electoral court TSE has ordered Petrobras to suspend its biodiesel advertising campaign as Lula's reelection campaign has highlighted his emphasis on the fuel programs, TSE said in a statement.

The ban will stay in place until the October elections.

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