Palm oil is the most efficient raw material for producing second-generation biofuels

Brazil has the potential to become a benchmark in the development of SAF and Green Diesel

São Paulo, October 30, 2023 - Palm oil, also known as palm kernel oil, is the most efficient raw material for the development of second-generation biofuels, according to the CEO of Grupo BBF (Brasil BioFuels), Milton Steagall. According to the executive, although Brazil's global participation in palm oil production is still timid - it currently ranks tenth among the largest producers - the country has immense potential for sustainable palm cultivation and the opportunity to be a benchmark in the production of second-generation biofuels, such as Sustainable Aviation Fuel (SAF) and Green Diesel.

"Brazil still has a small share of the oil palm market. But palm has many virtues. One of the most important from a socio-economic point of view is that its cultivation cannot be mechanized, which generates thousands of jobs and income for the population of the places where it is grown. At Grupo BBF alone, there are more than 6,000 direct jobs generated and 18,000 indirect jobs in five northern states. Another important point is that it has a wide-ranging production chain, from planting the seed to cultivation, harvesting and the operation of oil extraction industries, biodiesel production plants and the unprecedented biorefinery for the development of SAF and Green Diesel," says Steagall.

This entire virtuous cycle of the palm oil production chain can be implemented without cutting down any forest trees. "The potential of palm oil for generating biofuels in the Amazon is enormous, given that we have a veritable 'Green Pre-Salt' in the region, with more than 31 million hectares suitable for the sustainable cultivation of oil palm," explains the CEO of Grupo BBF. Oil palm cultivation follows strict legislation defined by the Federal Government in decree 7.172/2010, the Agroecological Zoning of Oil Palm, defined in May 2010.

According to this legislation, considered one of the strictest in the world, oil palm can only be grown in areas that were anthropized in the Amazon region until December 2007. "Currently, Brazil has less than 2% of the world palm market, growing the plant on an area of less than 300,000 hectares. There is still a lot of potential to grow without cutting down any forest trees, on the contrary, reforesting previously degraded areas, generating jobs and income for the population. And in this way, develop biofuels and generate clean energy for the people who live there," he says.

In addition to the positive impact on socio-economic and environmental factors, palm oil stands out as the main raw material for the production of SAF and Green Diesel due to its chemical chain - identical to that of fossil fuels in the C16 and C18 carbon chain - and its high efficiency in oil production: palm produces 10 times more oil per hectare when compared to soy, another important raw material used to produce biofuels.

It is estimated that 20 billion liters per year of SAF will be needed by 2030 to meet global needs. "This is an ambitious target for a sector that needs to decarbonize quickly. On the other hand, the world still faces a shortage of raw materials for the production of advanced biofuels. In the medium and long term, the Brazilian palm 'is' and 'will continue to be' the most efficient crop for decarbonizing the air sector," the executive argues.

From 2026, Grupo BBF will start supplying SAF and Green Diesel 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 take place at the country's first biorefinery, which is currently under construction and will have the capacity to produce around 500 million liters of the new biofuels every year. In all, more than R$2.2 billion will be invested in the new plant.

Hydrotreatment (HEFA) is the technology defined by Grupo BBF to be used for the production of SAF and Green Diesel. One way of understanding it better is to imagine vegetable oil - the main raw material - as a long chain of molecules. During the hydrotreating process, this "chain" is "broken" or "cracked" with the help of hydrogen. This process transforms vegetable oil into a "drop in" biofuel, without the need to adapt engines or refuel, with characteristics similar to traditional "fossil" fuels, but with the advantage of being sustainable and renewable.

About Grupo BBF

Grupo BBF (Brasil BioFuels), a Brazilian company founded in 2008, is the largest palm oil producer in Latin America, with a cultivated area of over 75,000 hectares and a production capacity of 200,000 tons of oil per year. The company is a pioneer in creating sustainable solutions for generating renewable energy in isolated systems, with thermoelectric plants powered by biofuels produced in the region. Its agricultural activity recovers areas that were degraded until 2007 in the Amazon, following the Oil Palm Agroecological Zoning (ZAE), approved by Decree 7.172 of the Federal Government, of May 7, 2010.

Grupo BBF has created an integrated business model in which it operates from the beginning to the end of the value chain - from sustainable oil palm cultivation, crude oil extraction, biofuel production, biotechnology and renewable energy generation - with assets totaling around R$2.2 billion and activities generating more than 6,000 direct jobs in the northern region of Brazil. Grupo BBF 's operations are located in the states of Acre, Amazonas, Rondônia, Roraima and Pará, comprising 38 thermoelectric plants (25 in operation and 13 under implementation), 3 palm oil crushing units, a soybean extruder and a biodiesel industry.

The company is expanding its supply of biofuels and has signed partnerships to produce Sustainable Aviation Fuel (SAF) and Green Diesel. The new sustainable fuels will be produced from 2026 at the country's first Biorefinery, which is currently under construction in the Manaus Free Trade Zone.

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