In the far north of Brazil, Roraima is the only state in the country not connected to the National Interconnected System (SIN) and its 650,000 inhabitants depend almost entirely on expensive, unstable and polluting electricity produced by diesel and fuel oil generators. And it is there, in the Amazon region, that one of the solutions for the energy transition is being made feasible, with palm plantations in degraded areas making it possible to use them to generate both electricity and renewable fuels.
Brasil BioFuels (BBF) will invest around R$2 billion in a biorefinery in the Manaus Free Trade Zone, which will produce more than 500,000 liters of HVO (green diesel) and SAF (green aviation kerosene) from 2025. Refining will take place in a region far from the centers where these fuels are consumed in Brazil - the South and Southeast - and will only be possible thanks to the use, as a raw material, of palm oil produced in Roraima, in São João da Baliza, a municipality of around 7,000 inhabitants, as a result of the crushing of palm oil grown in the region.
For BBF to make the investment feasible, another name entered the equation: Vibra Energia, which will be the sole buyer of all the fuel produced in the biorefinery for five years, a period that can be renewed for another five. It will be the capillarity of the former BR Distribuidora that will allow the green fuels to reach the consumption centers throughout the country, through its logistical and commercial capacity. The great advantage of these technologies is that they are drop in: unlike biodiesel, which after a certain percentage affects the performance of engines, HVO and SAF can be used immediately to replace fossil fuels, with the advantage of not generating sulfur.
Market for fuels
Although HVO and SAF are already green fuels exploited in the European and US markets, their use in Brazil is still in its infancy, and the lack of a defined incentive policy - such as the mandatory blending of biodiesel into diesel - and the absence of a consumer market were obstacles BBF had to develop its complex business model. "Without an industry, nobody buys palm fruit, especially in Roraima. This was a problem at the beginning to make the venture viable," said Milton Steagall, BBF's president, at an event held to announce the partnership with BBF in São João da Baliza, where the company's industrial unit is located.
In November 2021, Vibra and BBF entered into a contract for the purchase and sale of green diesel, the HVO, which will be produced at the biorefinery of Manaus. At the time, the investment was estimated at R$ 1.8 billion, but the project was adjusted to be a hybrid plant that also manufactures SAF, given the prospects of advancing the use of this technology in markets worldwide by the need to decarbonize also aviation.
"All the agricultural activity, oil production, fuels, is the raison d'être of BBF. Vibra's role is to be the buyer of the volume that will be produced, and we will place this volume in our markets. They are complementary roles," said Wilson Ferreira Junior, president of Vibra.
The government is currently studying rules that will allow a more intensive use of these fuels. Recently, the Ministry of Mines and Energy's Fuel of the Future Technical Committee organized premises for certification, governance, quality and taxation of the SAF and, according to the ministry's general coordinator of biodiesel and other biofuels, Renato Dutra, a bill was sent by the group to the Civil House proposing the establishment of minimum percentages for the mixture of green aviation fuel to QAV starting in 2027.
While there is no "guaranteed" market in Brazil due to the lack of these blending mandates, airlines are moving voluntarily. The international program for reducing and offsetting aviation emissions, Corsia, foresees emissions stabilizing at the levels observed in 2019, with obligations starting in 2027.
"We will have the advantage of having a pioneer fuel, of having made the investment in this way," Ferreira Junior said.
From the 500 thousand tons of vegetable oil, 400 thousand tons of biofuel will be produced, with flexibility for division between SAF and HVO. Initially, the idea is that there will be 200,000 tons of each. According to Vossos, the HVO has a density of 0.78, while the SAF has a density of 0.7%, which will result in the production of 250,000 liters of HVO and 280,000 liters of SAF.
In normal times, the Brazilian aviation market consumes around 7 billion liters of QAV a year, which means that the SAF produced represents around 4% of all this demand. In the worst-case scenario, if Brazil has no demand for green fuels, Vibra will be able to export to markets where demand is only growing exponentially, according to Marcelo Bragança, Vibra's Executive Vice President of Operations, Logistics and Sourcing.
The event in Roraima was attended by executives from the three main Brazilian aviation companies: Gol, Azul and Latam. All were enthusiastic about the technology and, in private conversations, said that to meet the emission reduction targets they will need to buy some type of SAF, being important to ensure the supply before 2027 since the production market is still restricted.
Vibra was also confident about putting green diesel on the market. "Vibra has 18,000 B2B customers today, and we have already had conversations with them about introducing products that emit less and decarbonize," Bragança added.
The executives avoided talking about fuel costs and prices, for contractual reasons, but affirmed that the verticalization of BBF's production, combined with the low cost of land, should make the palm oil product very competitive in the market in comparison with other vegetable oils, such as soy and corn.
"Without partnerships that enable renewable fuels, there is no way to zero emissions," said Ferreira, who recalled that Vibra has already secured offers of other biofuels, such as ethanol, in a partnership with Copersucar, and biomethane, in partnership with ZEG Biogas. In addition, the company recently closed the acquisition of 50% of Comerc Energia - parent company of MegaWhat - in another step towards energy transition and reducing the role of fossil fuels.
*The reporter traveled to São José da Baliza (RR) invited by BBF and Vibra
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