The sustainability of Brazilian oil palm production - the plant that gives rise to the most consumed vegetable oil in the world, palm oil - and the rigidity of national legislation for this sector need to be shown to the American, European and Asian markets, according to Milton Steagall, CEO of Grupo BBF (Brasil BioFuels). The executive made the case for sustainable oil palm production during the panel "Brazil's commitments to ESG", which is part of the programme of the "Brazil Economic Forum", an event organized by LIDE in Zurich, Switzerland, this Friday (19).
Alongside names such as the Minister and President of the Supreme Court, Luis Roberto Barroso, and the President of the Federal Senate, Rodrigo Pacheco, leaders and businesspeople from Brazil and abroad, Steagall explained that palm oil is a key element in decarbonization, as it can be used to produce biofuels and electricity for remote regions of the Brazilian Amazon, which are connected to Isolated Systems.
The sector's biggest challenge, however, is to explain to the world that Brazil's palm oil production model is completely different from that of Southeast Asia, the region that is home to the world's largest producers of the crop, and that Brazilian palm is produced in an environmentally sustainable and socially fair way.
"The big challenge today for the crop to thrive is financing and for us to be able to show the community in the United States, the European Union and Asia that Brazilian production is different from that practiced in Southeast Asia. Europe, for example, has banned palm oil from its trade relations because today 90% of palm oil is produced in Southeast Asia and they deforested it in order to have this production, which means that the origin of this oil is contaminated. The case of Brazil is different, because we have very robust legislation [that prevents deforestation]," he explains.
According to the businessman, the sustainable cultivation of oil palm, popularly known as dendê, follows federal government legislation from 2010, called the Agroecological Zoning of Oil Palm (Decree 7.172), which is considered one of the strictest in the world. According to the legislation, oil palm can only be grown in the country in degraded areas of the Amazon region until December 2007, which prevents the clearing of forest for new plantations.
A robust study carried out by the Brazilian Agricultural Research Corporation (Embrapa) mapped 31 million hectares in the Amazon region where oil palm can be grown in a totally sustainable way. Today, around 300,000 hectares are cultivated with the crop in Brazil, 75,000 of them by Grupo BBF in Roraima and Pará.
"We are in a position to take the lead from Indonesia and Malaysia, the world's largest producers, who together cultivate oil palm on 22 million hectares. Brazil can grow this crop on 31 million hectares, without cutting down a tree," he explained.
The Brazilian businessman also argued that preserving the Amazon rainforest depends on creating job and income opportunities for the local population, estimated by IBGE at 30 million people. "We will only stop the deforestation of the forest when we are able to offer decent jobs to this population," he said.
For him, palm production also contributes in this area, since the plant cannot be mechanized, which generates jobs and income for local communities. Today, Grupo BBF employs around 6,000 direct workers and 18,000 indirect workers in the five states where it operates: Pará, Roraima, Rondônia, Amazonas and Acre.
Steagall often says that Grupo BBF works "from seed to megawatt", because as well as planting the palm, the company processes the oil and transforms it into biofuels to generate renewable energy in remote regions of the Amazon and also produces inputs that replace petrochemicals in products for various sectors, such as pharmaceuticals, beauty, agribusiness and cleaning.
From 2026, the company should start supplying SAF (Sustainable Aviation Fuel) and Green Diesel (RD) to Vibra Energia (formerly BR Distribuidora) - under an offtaker contract. The raw material for the advanced biofuels will be palm oil grown by Grupo BBF in the Amazon region. Refining will be carried out at the first biorefinery in the country to produce the unprecedented biofuels on an industrial scale. More than R＄ 2.2 billion will be invested in the new plant, which will have the capacity to produce around 500 million liters of SAF and Green Diesel annually.
