Boosting biofuels
One of Brazil’s biggest biofuels producers, bp Bunge Bioenergia, is now 100% owned by bp, strengthening the biofuels element of our integrated energy company strategy
Anyone who’s filled up their car’s tank is probably familiar with the E5 and E10 symbols on the pump.
It’s a code that means although the fuel is still mostly traditional petrol, it also contains either 5% or 10% ethanol – a biofuel that has around 70% lower lifecycle carbon emissions than the conventional transport fuel it replaces, when made from sugarcane.
In Brazil, most cars are built with hybrid engines that can run on up to 100% ethanol – which makes a lot of sense in one of the world’s most prolific biofuels-producing countries.
Fuels like these will have an important role to play in supporting the energy transition and helping to supply the energy customers need today.
In Brazil, bp is involved in offshore oil and gas exploration and has also been part of the country’s biofuels story since becoming the first international energy company to invest in the sector in 2008. bp is now one of Brazil’s leading ethanol producers, after recently taking full ownership of its Brazilian biofuels joint venture, bp Bunge Bioenergia, an industrial-scale sugar and ethanol business.
Here are five reasons why we’re excited about this acquisition.
1. Sugarcane is versatile
The crushing of sugarcane can produce more than just one product. Cane juice can be used to make ethanol or sugar, and the leftover biomass can then generate electricity.
bp bioenergy’s mills – 11 in total across five Brazilian states – can vary, to an extent, the balance of ethanol to sugar they produce based on market conditions. The sugar, which gets sent for further refining, is mostly exported to countries around the world, while the ethanol can be used either domestically – for example, as a fuel for transport – or sold on international markets.
bp bioenergy in Brazil currently has capacity to produce 1.7 million tonnes of sugar annually, and around 1.7 billion litres of ethanol.
The mills, which operate round the clock when needed, also use the leftover biomass, known as bagasse, in a process involving high-pressure boilers that generates enough bioenergy to meet the needs of the business and produces around 1,400 GWh/year of electricity to export into the grid.
Additionally, vinasse, another byproduct from the fermentation of cane juice, is used as a biological fertilizer, helping to reduce reliance on chemicals. That reduction in chemical use is also important for helping to maintain soil health and supporting regenerative agriculture.
2. Ethanol’s advantage
Ethanol’s lifecycle carbon emissions are around 70% lower than conventional hydrocarbon transport fuels.
Brazil started investing in ethanol production in the 1970s. Since then, production has expanded significantly. “Brazil has a robust agenda to become an energy transition hub. Over the years, the country’s ongoing support for biofuels has contributed to the growth of ethanol as a popular fuel for cars here. Around 85% of cars run, at least partly, on ethanol,” says Carolina Fratta, bp’s vice president of bioenergy asset management.
Outside Brazil, ethanol is also used as a transport fuel with smaller amounts blended with petrol in places like Europe, the UK and US. That blend helps to create a lower lifecycle carbon fuel that can be used with the same engines and other infrastructure. Ethanol can also be used as a bio-feedstock for chemicals, including ethylene, which can be used in agriculture and manufacturing.
“We can now bring our wealth of knowledge on safety and processes to these operations in Brazil and help to make the mills even more efficient.”
Allan Giumelli, vice president of bioethanol
3. Leveraging bp’s expertise and experience
Following the acquisition of bp Bunge Bioenergia, bp expects to unlock greater value in the business, taking full advantage of our expertise in technology and industrial processes, as well as the potential to use our trading and shipping capabilities.
“One of our strengths is not only in running large industrial operations, but our focus on safety. We can now bring our wealth of knowledge on safety and processes to these operations in Brazil and help to make the mills even more efficient,” says Allan Giumelli, vice president of bioethanol.
“What’s more, our trading and shipping teams can now trade the ethanol we produce, and improve the way we connect bp customers, both domestic and international, with our bioenergy products.”
In 2023/24, the business produced 1.4 billion litres of ethanol and 1.5 million tonnes of sugar, an increase of 10% and 19% respectively, compared to the 2022/23 harvest.
“bp bioenergy complements our position in Brazil, where we are investing in today’s energy system by exploring for oil and gas offshore, while also investing in tomorrow’s energy system. It’s all part of our journey to become an integrated energy company.”
Andres Guevara, bp head of country for Brazil
4. Potential for future growth
Looking to the future, bp bioenergy is exploring the development of additional bioenergy products from sugarcane, including next-generation ethanol and biogas.
“New processes and technologies have already helped bp to boost ethanol production from 5,000 litres to 7,000 litres per hectare in the past decade. We believe that ethanol production from bagasse – known as second-generation ethanol – and other technologies applied to agricultural practices with our partners, could increase volumes per hectare even further without needing to expand to new areas,” says Carolina.
In addition, bp teams are looking into the production of biogas from vinasse.
5. Benefit to Brazil’s communities
bp bioenergy has had a meaningful impact on the areas where it operates, creating opportunities for employment and supporting programmes for youth in these communities.
The company employs around 9,000 people, and in total supports around 13,000 jobs, directly and indirectly across five states in Brazil. The joint venture helped to set standards for safety that are now a benchmark for the industry and in 2023/4, recorded no lifechanging injuries or fatalities.
The company has also taken steps to encourage greater participation of women in the workforce. Meanwhile, the culture, sport and education programmes it supports have reached around 24,000 children and teens.
“bp bioenergy complements our position in Brazil, where we are investing in today’s energy system by exploring for oil and gas offshore, while also investing in tomorrow’s energy system. It’s all part of our journey to become an integrated energy company,” says Andres Guevara de la Vega, president of bp Brazil and chair of bp bioenergy.
💡 Why it matters
Demand for biofuels is growing. From fuels for aviation to shipping to road transport, this source of energy has an important role to play in helping towards decarbonizing hard-to-electrify sectors. Made from a range of feedstocks, biofuels can go in many of the pipes and engines we already have, either as a straight ‘drop-in’, or blended with fossil fuels.
biofuels are an important part of bp’s larger bioenergy portfolio and the acquisition of bp Bunge bioenergia in Brazil is a milestone in bp’s effort to grow the bioenergy businesses. In addition to bp bioenergy, bp also has eight exploratory blocks in Brazil as we continue to expand the country’s deepwater resources.
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