Brazil’s Petrobas to invest $3.5B to double biofuel output
Brazilian energy giant Petrobas expects demand for biofuels will rapidly rise within the next decade and intends to spend $3.5 billion over the next four years to more than double its biofuel output. During a recent interview, Miguel Rossetto, chief executive of energy giant’s biofuels unit, Petrobras Biocombustivel, stated:
We are preparing for a global scenario in which the demand for biofuels is expanding. The pace of growth, the volume of growth and the size of these markets are what’s in play. But the course of expansion for renewable energy markets for us is a given.
Petrobas intends to spend $2.5 billion to boost its biofuel production, with 80 percent of the funds earmarked for ethanol and 20 percent for biodiesel. The company will set aside an additional $1 billion for infrastructure development.
The demand for ethanol in Brazil is on the rise, at least in part, due to a mandate that requires pump gasoline to be blended with 25 percent ethanol (and we have issues in the U.S. getting to 15 percent). Additionally, the Brazilian government requires diesel fuel to contain a minimum of five percent biodiesel (B5), but it’s anticipated that this blend rate will continue to rise in the coming years.