BP and US agri-commodities company Bunge have formed a joint venture to create a biofuels powerhouse in Brazil.
BP Bunge Bioenergia will have 11 biofuels sites and the production capacity of 32 million metric tonnes of sugarcane a year, making it the second largest plater in the surgarcane ethanol biofuel industry in Brazil.
The move positions the new company for growth in both biofuels and biopower.
Bob Dudley, group chief executive, says: 'This is another large-scale example of BP's commitment to play a leading role in a rapid transition to a low carbon future. Biofuels will be an essential part of delivering the energy transition and Brazil is leading the way in showing how they can be used at scale, reducing emissions from transport. This combination will unlock new possibilities for improved efficiency and future growth in this key market.'
Dev Sanyal, chief executive of BP Alternative Energy, adds: 'In one step, this will allow BP to significantly grow the scale of our business in one of the world's major growth biofuels markets. With a shared commitment to safety and sustainability, bringing together our assets and expertise will allow us to improve performance, develop options for growth and generate real value. BP Bunge Bioenergia will be well-placed to support Brazil's increasing demand for both low carbon biofuels and biopower.'
The deal will grow BP's existing biofuels business by more than 50% and better positions the business in a country already geared up for biofuels, with 70% of vehicles capable of running on ethanol.
New rules in Brazil coming into force in 2020 mandate additional sales, encourage market growth and support further development of the sugarcane ethanol industry.
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