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Investment in Renewable Fuels: reality and opportunity part 1


Alberto Barriga – Senior Partner at DMS PARTNERS


In an increasingly complex world, with more environmental restrictions (GHG), new legislation, capital restrictions, new technologies on the path to energy transition, the search for new opportunities is constant. Never, for the survival of a company, has it been so strongly linked to its ESG values to maintain the prospects for its “stakeholders”, with a sustainable operational cycle, expressed by values of the circular economy, “compliance” and the search for optimization. the entire production process.


Oil in energy is no longer, even if very embryonically, its protagonist. The search for new sources with lower atmospheric emissions at cost competitive, brings alternatives for new investments with increasing prospects for agroenergy. Brazil has enormous potential in renewable sources, but liquid biofuels stand out here, a renewable source, where we are just beginning a new era. In Brazil, our history with the production of ethanol from sugar cane (E1G) expresses the reality of our potential for alternative consumption, whether “pure” finished products or in mixtures.


The alcohol content - anhydrous ethanol - in gasoline is currently 27% vol. addition for regular gasoline and 25% for premium gasoline. Annual ethanol production in Brazil is close to 30 billion liters and the “flex fuel” engine has done its part to increase this demand.


Biodiesel, which is a product of plant and animal origin, has its current share in final diesel limited to 12%vol in 2023. It is projected to grow to reach 15% in 2026. The annual production of Biodiesel in 2022 was 6 .7 billion liters. To get an idea of the gap between “bios” and fossils, Brazil annually consumes 40 billion liters of diesel and 23 billion liters of gasoline via oil (ANP, 2022). The biggest difficulties with Biodiesel are the flow conditions in the engines and the oxidation potential that deteriorates its fuel properties. To minimize impacts, you can add antioxidants to diesel.


In other alternative sources in Brazil, the great progress we have made in solar energy stands out – the fourth producer in the world, offering the electrical equivalent equal to the amount that the Itaipu Plant supplies through hydro energy (14 GW) and is the sixth producer in wind energy (26 GW).


In liquid biofuels, the initial concept has always been “in-natura” additive mixtures, additions of biodiesel to fossil diesel. Recently, cracking and hydrocracking technologies used in refineries have been adapted to process vegetable and animal oils together with fossil material – co-processing – obtaining fuels that are plausible for consumption as fuels, but have limited stability due to oxidation.


These mixing units remove sulfur, nitrogen, oxygen and unsaturated compounds (more unstable), but maintain some instability.


An important and consistent alternative to biofuels was to work with these units in isolation, without oils of fossil origin, only of vegetable and animal origin. The hydrotreating route for these renewable oils is the one that has advanced the most, as it modifies the molecular structure of the fuels generated, giving them greater chemical stability to oxidation, better performance in the diesel engine through isomerization reactions, as they convert linear carbon chains into branched ones. which improves the flow quality for use in engines. This process is similar to those used in oil refineries, but requires different care because they are oils of different, non-fossil origin.


An old (1920) and competing process is Fischer–Tropsch (FT). They generate more specific products, free from aromatics, sulfur, nitrogen and oxygen from the synthesis of carbon molecules from renewable or non-renewable sources, such as biomass, coal, natural gas, but these plants are more complex, with high Capex and Opex – costs technological – and require high quality biomass sources. They use special catalysts and a complex product separation system. In the regulation of biodiesel by the ANP based on paraffinic hydrocarbons (green diesel), the Fischer-Tropsch process was restricted to biomass. There is also the fermentative process, organisms such as yeast transforming materials such as sugarcane juice into organic substances similar to petroleum fractions and also the oligomerization of alcohols transforming into diesel, but both face challenges of high cost and difficult practical application.


In this time of environmental requirements and evolving technology, we will now show the technological “status-quo” of these biofuel production plants using the hydrogenation route (part 2/2).


Always count on the advice of the team of Senior Partners at DMS PARTNERS,


specialized in the most diverse functional areas, industries and technologies.

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