Biofuels and biopower: BP and Bunge new joint venture

As BP and Bunge announce the completion of a new joint venture, BP Bunge Bioenergia, we look at how effective biofuels are in lowering emissions and whether growing them is to the detriment of the Amazon rainforest. Find out more from those leading the business

What’s ethanol’s impact on emissions?

Ethanol produced from sugarcane is one of the most carbon-efficient biofuels available globally, says Mario Lindenhayn, executive chairman of BP Bunge Bioenergia.

“These fuels have lifecycle greenhouse gas emissions about 70% lower than conventional hydrocarbon transport fuels, when considering the entire production process,” he says. “The majority of vehicles in Brazil – around 75% – are flex fuel, meaning they are able to run on ethanol and/or gasoline. Diesel for light vehicles is banned in Brazil.

Lindenhayn says the joint venture clearly demonstrates BP’s commitment to the energy transition. He also highlights Brazil’s recent Low Carbon Transport Policy (RenovaBio), which supports Brazil’s pledges under the Paris Agreement on climate change and makes the country one of the few officially regulated carbon markets in the world.

RenovaBio is expected to further support growth in the sugarcane ethanol industry. “Looking forward, the country’s demand for ethanol is estimated to increase by about 70% by 2030,” Lindenhayn says, adding: “Biofuels will be an essential part of advancing towards a low carbon future by reducing emissions from transport and electricity, and Brazil is leading the way in showing how they can be used at scale.”

What about sustainability and deforestation of the Amazon rainforest?

People are often concerned about the possibility of deforestation in the Amazon rainforest due to the cultivation of sugarcane, according to Lindenhayn. “That is almost always the first question we hear,” he says.

But BP Bunge Bioenergia was formed around both parties’ existing biofuel mills and existing land under sugarcane cultivation. “Ten out of the 11 mills belonging to the newly-created JV are in Brazil’s centre south cane area and are more than 1,500 kilometres (932 miles) away from the rainforest, greater than the distance between Chicago and Dallas.”

One mill is located farther north, in the Tocantins state, but also out of the Amazon region and in an area historically established for agriculture. “All of our mills are in Brazil’s ZAE Cana [sugarcane agroecological zone],” he says. “This is the Brazilian legislation that prohibits the cultivation of cane in the Amazon and the ecologically important Pantanal biomes and the Upper Paraguay River Basin.”

He also notes that sugarcane cultivation is not in competition with other agricultural areas since Brazil uses less than 4% of the arable land available. Sugarcane is a very robust crop that can be cultivated in locations with limited soil quality that are not usually well suited for growing food (degraded pasture, for example). 

“In fact, with the use of new technologies and new cane varieties, we are seeing a massive improvement in yields that will allow the same production of ethanol with reduced use of land, he says. “So we have no plans to look beyond our existing land by way of large-scale greenfield expansion to new mills or agricultural areas.”

Behind the scenes: how sugarcane becomes a biofuel

Brazil is the world’s largest grower of sugarcane and the country’s indicative reserves are estimated at 11.6 billion barrels of oil equivalent.

Geovane Consul, CEO of BP Bunge Bioenergia, says the industrial process begins when cane reaches the manufacturing sites and the liquid is extracted from the cane fibres and the remainder, ‘bagasse’, is then burned to create power.

“The energy produced from the bagasse is used to power the manufacturing sites, making the plants self-sufficient in sustainable electricity,” says Consul. The surplus power – around 70% of the biopower generated – is sold to the Brazilian national grid. 

Considering BP and Bunge’s mills, that makes up for an annual total of around 1,200GWh. Consul says the extracted liquid is fermented into anhydrous ethanol, the type added to gasoline (in Brazil, it is mandatory to blend 27% of fuel with ethanol, the largest blending mandate in the world), and hydrous ethanol, which is also sold at petrol stations.

Whether it is mixed with gasoline or used in its pure form to power vehicles, ethanol has a significant role to play in the decarbonization of transportation, producing 70% fewer greenhouse gas emissions than conventional fuels. In 2018, ethanol met nearly 50% of Brazil’s light fuels demand. 

“In about 20 years, about 22% of all liquid fuel consumed in Brazil – not just for light vehicles – is expected to come from biofuels,” he says. ‘That’s up from 15% in 2016.” 

Lindenhayn closes by returning to sustainability. “We take safety and environmental sustainability extremely seriously,” he says. “Whilst BP Bunge will be responsible for its own operations, as a 50% shareholder, BP’s safety and environmental expectations will continue to be clear.”

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