photo: Robert Gale via flickr.
Royal Dutch Shell has announced that it has a signed a memorandum of understanding with Brazilian biofuel company Cosan that would create a $12 billion joint venture for the production and distribution of sugarcane-based ethanol. Both companies will contribute Brazilian assets to the joint venture and Shell will pony up an additional $1.625 billion in cash, to be paid over the next two years:The ethanol production capacity of the joint venture will be about 529 million gallons per year, with plans to scale that up to over 1,300 million gallons--making it one of the world's top three ethanol producers alongside Archer Daniels Midland and POET. (Biofuels Digest)
Additionally, the joint venture will be the third-largest fuel distributor in Brazil's retail and commercial fuels market, operating some 4,500 retail locations.
In their press release, Mark Williams of Shell said:
We see joining with Cosan as a way to grow the role of low-carbon, sustainable biofuels in the global transportation fuel mix. The joint venture would also enable Shell to set up a material and profitable biofuels business, with the potential to deploy next generation technologies.
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