BP and Bunge, an agriculture, food and ingredients company, will join forces in Brazil to produce sugarcane ethanol, one of the most carbon-efficient biofuels available globally, BP said Monday.
The new company, BP Bunge Bioenergia, will be an equal share joint venture and have 11 biofuels sites in Brazil.
Ethanol's lifecycle greenhouse gas emissions are around 70% lower than conventional hydrocarbon transport fuels.
Brazil is the ideal location for sugarcane ethanol as the country is the world’s second largest and most integrated market for ethanol as a transportation fuel.
In 2018, the Brazilian production of ethanol was some 26 billion liters, produced almost entirely in-country from sugarcane grown.
With 32 million metric tonnes of combined crushing capacity per year, the joint venture will have the flexibility to produce a mix of ethanol and sugar.
BP Bunge Bioenergia will also generate renewable electricity, via the waste biomass from the sugar cane and sell surplus electricity to the Brazilian power grid, BP said.
Deal completion is expected in the fourth quarter of 2019.
By Zeynep Beyza Kilic