Brazil has a "green pre-salt" to exploit

August 22nd, 2023
By Milton Steagall

Accelerating the energy transition is a global necessity in order to combat climate change and significantly reduce dependence on non-renewable energy sources such as oil and coal. Having a clean energy matrix with less environmental impact is a Brazilian vocation and advantage, as the country has enormous potential to take advantage of its natural wealth.

In this scenario, in a short space of time, it is possible to turn Brazil into a benchmark for the sector, with sustainable development and an important contribution to reducing greenhouse gas emissions on the planet. For this to happen, coordinated action is needed between public and private agents (companies, governments, the legislature and the judiciary).

It is well known that the country has one of the largest renewable energy matrices in the world, ranging from hydroelectric power, which is already used on a large scale in the country, to the use of biofuels such as biodiesel and ethanol, as well as the growing use of wind and solar energy.

I would like to draw attention here to a point that I believe is a watershed for Brazil. At the center of the debate on environmental preservation, the Brazilian Amazon region has a veritable "green pre-salt" available to be exploited. There are more than 31 million hectares of degraded areas available to be recovered with the sustainable cultivation of oil palm, which allows for the production of biofuels, biotechnology and the generation of renewable energy.

To get an idea of Brazil's potential in the sector, we need to go back to federal decree 7.172/2010, which established the Agroecological Zoning of Oil Palm. The law relied on a robust study carried out by the Brazilian Agricultural Research Corporation (Embrapa), which defined areas to develop the crop sustainably in the country, in order to protect and recover the Amazon rainforest.

The area permitted for planting was demarcated by georeferenced satellite images on land that had been degraded by December 2007. The crop offers an ecologically correct solution for the production of biofuels, the generation of clean energy and the development of renewable inputs for the chemical industry.

This is a unique opportunity to change the face of one of the most deprived parts of the country and at the same time promote environmental preservation and social equity, with the possibility of generating thousands of jobs.

Each hectare is capable of generating enough raw material to produce up to 7,000 liters of palm oil. The entire process, from planting to oil extraction, is manual, which requires a large amount of local labor. The model involves planting, harvesting and consuming in the northern region itself.

The lands demarcated by the Federal Government could give rise to approximately 210 billion liters of palm oil per year. The volume is equivalent to almost three times the entire world production in 2022, according to data from the US Department of Agriculture on the last harvest.

When it comes to "green pre-salt", just look at the available figures. Last year, Brazil extracted 1.103 billion barrels of oil, according to the National Oil and Gas Agency. This volume is equivalent to around 175 billion liters of oil, taking into account all the wells on national territory, including those in the pre-salt layer off the Brazilian coast. In other words: around 20% less than the potential for generating palm oil in the areas demarcated by Embrapa.

For all this potential to be put into practice, the country needs to invest in the modernization and expansion of its infrastructure, as well as having funding for renewable energy projects, in a scenario that still has fiscal and economic restrictions.

The entire operation involving oil palm brings together the decarbonization of the Amazon and socio-economic development in the region, with a focus on generating jobs and income. It's an opportunity for the country to make its global contribution to the energy transition without the need to expand deforested areas in its forest.

*Milton Steagall is CEO of Grupo BBF (Brasil BioFuels)

icon of Milton Steagall CEO - Grupo BBF
Milton Steagall
CEO of Grupo BBF