Deriving Biofuels from Sugarcane

As the world transitions to lower carbon energy sources, biofuels (derived from living matter such as corn, soy, and sugarcane, for instance) are expected to play an important role in hard to abate sectors. Biofuels are a renewable energy source that generally have lower carbon emissions than fossil fuel equivalents.

In the United States, for instance, ethanol – considered a “first generation biofuel” - is added to gasoline to oxygenate the gas. This helps fuel burn more cleanly and produce lower emissions.

According to the IEA, demand for biofuels is expected to grow by 28% between 2021-2026.  

Brazil is the world’s biggest producer of biofuel derived from sugarcane.

Raízen Energia is the country’s largest exporter of sugar and ethanol. It has extensive sugarcane growing operations from which it derives 3.5 billion liters of ethanol and produces 2.9 TWh of electricity from biomass-fueled cogeneration facilities.

According to Raizen, its “first generation” ethanol derived from sugarcane emits 80% less carbon dioxide than gasoline. The company also produces “second generation” ethanol from waste products such as sugarcane bagasse and straw. Ethanol produced in this way, the company says, emits even less - 30% less carbon dioxide than conventional ethanol.

The company was formed in 2011 as a joint venture between oil and gas giant Shell and Brazilian biofuel company Cosan.

In this interview, Andre Valente, Head of Sustainability at Raizen, discusses what it takes to produce sustainable biofuel from sugarcane, his perspectives on the role of biofuels in the energy transition, and the importance of working with your suppliers to embed sustainability throughout your value chain.

Diana Davis, IX Network: As a leading supplier of sustainable sugar and biofuels, could you tell me more about your operations and your products?

Andre Valente, Raizen: The sugarcane industry is centuries old in Brazil; our country is the largest sugarcane producer in the world. The industry is highly consolidated, but it has been through significant changes in the recent decades.

From only 1% of Brazilian territory, the sugarcane industry is able to produce sugar, ethanol, and bioelectricity. We do that on land that is hundreds of miles away from the Amazon rainforest.

Sugarcane is a crop that is different from other crops. It's a perishable one that you can’t store it in silos in the same way that you can store grains, for instance. Instead, you have just a few hours to process sugarcane.

While that can make for a logistics challenge it has been a boon for sustainable production. We know exactly where our feedstock comes from, even if it's from a third-party supplier. In our case, half of the sugarcane we use is produced by us and the other half is purchased from over 2000 farmers that supply to us.

For all of our suppliers, we have a geo-based reference of the cane supplied to us on a certain day at a certain moment with a certain truck. It's a big, complex, operation that allows us to be the largest company to have sustainable sugar and ethanol.

A criticism of sugarcane production in the past is that the industry used to practice widespread burning to make harvesting more efficient. This practice of intentional preharvest burning has been extinguished for many years now, with positive impacts on GHG emissions and local air quality, for instance.

Today we have mechanized harvesting as the country’s common practice, displacing manual sugarcane cutting through a fully mechanized and automated process that has increased our yields, safety indicators, and environmental preservation.

Diana Davis, IX Network: Does the logistics aspect of it make it difficult for competitors to spring up?

Andre Valente, Raizen: Sugarcane farms must be within close range to make the business feasible. The average supplying radius varies from 20 to 50 kilometers from the processing facilities.

The better you know your supply chain, the more efficient your process can be. We have a program called Elos, which is Raizen’s sustainability continuous improvement program for suppliers. We assess every supplier's facility with our own people and two NGO's that partner with us. We run an assessment on their production process and their social and environmental challenges. Then we develop an action plan for them so that they can improve the way they work step-by-step.

We find this approach valuable for us, because it creates a more resilient and sustainable supply chain. For our suppliers it is also valuable because it helps their business grow and improve. We find that we have less competition for feedstock in those regions because our suppliers see value in working with us. It’s a win-win situation.

Diana Davis, IX Network: What would you say differentiates Raizen in the market?

Andre Valente, Raizen: We are a new company working in a centuries old industry and we had strong sustainability commitments from day one.  Raizen was formed 12 years ago, when Shell and Cosan formed the joint venture that led to Raizen.

Nearly a third of every sugarcane that is certified in the Bonsucro standard in the world is from Raizen. We ensure we maintain our sustainability credentials with strong governance. We have a board committee that meets every three months.

No one gets this far overnight. We started this sustainability journey way before our competitors and now we're harvesting the fruits of having invest in much money and time into it.

Diana Davis, IX Network: Turning to a wider discussion: What role do you see biofuels playing in the energy transition? How pervasive do you think they'll be in supporting the net zero world?