Petrobras banking on renewable fuels, niche refining

Spanish Market: Biofuels, Emissions
02/12/20

Brazil's state-controlled Petrobras is developing green diesel and other niche refining businesses as part of its effort to reduce emissions.

Earlier this year, the company concluded refinery tests on its patented hydrotreated vegetable oil (HVO) production technology. The co-processed renewable fuel uses up to 10pc vegetable oils to produce a drop-in fuel that is chemically identical to petroleum diesel.

Petrobras' HVO diesel, also known as green diesel, reduces emissions by 70pc compared to conventional diesel and by 15pc compared to biodiesel, downstream director Anelise Lara said in a call with analysts this week.

Production of renewable diesel is technically possible at the company's existing refineries and has already been tested at the 208,000 b/d Presidente Getulio Vargas refinery (Repar) in Parana state, Lara said. Repar is among the refineries that Petrobras plans to divest.

While Petrobras is in the process of exiting conventional biofuels production, the company is evaluating investments in greenfield biokerosene projects, as well as the construction of dedicated co-processed green diesel refineries.

"We are waiting for approval from the CNPE (national energy policy council) and the ANP (hydrocarbons regulator) to begin selling our renewable diesel in Brazil," she said. "Recognition that our renewable diesel meets the requirements of the Renovabio (biofuels law) is an important step to making these projects economically viable."

The ANP conducted a public hearing process between July and September regarding the classification of HVO and renewable diesel. The agency received nearly 40 contributions from market participants and is expected to release its recommendations to the CNPE later this year or in early 2021.

In a preliminary designation, the ANP stopped short of classifying HVO as biodiesel as Petrobras had hoped. Instead, it sided with Brazil's biodiesel and agricultural industry associations, which asserted that only 5pc of Petrobras' green diesel comes from renewable sources while 95pc of its feedstock remains fossil fuel.

Lara highlighted that the company's renewable diesel reduces the "collateral impact" of biodiesel use on engines, which "suffer" from conventional biodiesel blends.

Brazil's biodiesel producers' association Ubrabio rejects claims that biodiesel causes engine damage.

The expansion of second-generation biofuels production is part of Petrobras' new niche refining strategy, which will focus on environmentally friendly products with a renewable content, Lara said. The company is also planning to concentrate its refining assets in populous southeastern Brazil, while it divests half of 2.2mn b/d of refining capacity in other parts of the country.

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19/04/24

India mulls using more natural gas in steel sector

Mumbai, 19 April (Argus) — India's steel ministry is considering increasing natural gas consumption in the sector as it aims to lower carbon emissions from the industry. Steelmakers held a meeting with the steel ministry earlier this month, to discuss challenges and avenues to increase gas allocation to the sector, according to a government document seen by Argus . Steel producers requested that the government set gas prices at an affordable range of $7-8/mn Btu for them, to make their gas-based plants viable, as well as for a custom duty waiver on LNG procured for captive power. India's LNG imports attract a custom duty of 2.5pc. City gas distribution firms sell gas at market-determined prices to steel companies. Representatives from the steel industry also requested for the inclusion of gas under the purview of the country's goods and service tax, and to be given higher priority in the allocation of deepwater gas, which has a higher calorific value. Deepwater gas is currently deployed mostly to city gas distribution networks. Steelmakers are currently undertaking feasibility tests for gas pipeline connectivity at various steel plants. But a gas supply transmission agreement requires a minimum five-year period for investment approval. The steel industry is heavily reliant on coal, and the sector accounts for about 8-10pc of carbon emissions in the country. A task force of gas suppliers including IOC, Gail, BPCL, Shell, and HPCL and steel producers like Tata Steel, AMNS, All India Steel Re-roller Association and the Pellet Manufacturers Association has been set up, and the team is expected to submit a report on increasing natural gas usage and lowering carbon emissions by 15 May, the government document said. This team is one of the 13 task forces approved by the steel ministry to define the country's green steel roadmap. The steel ministry aims to increase green steel exports from the country in the light of the policies under the EU's Carbon Border Adjustment Mechanism (CBAM), which will take effect on 1 January 2026. Under the CBAM, importers will need to declare the quantity of goods imported into the EU in the preceding year and their corresponding greenhouse gas emissions. The importers will then have to surrender the corresponding number of CBAM certificates. CBAM certificate prices will be calculated based on the weekly average auction price of EU Emissions Trading System allowances, expressed in €/t of CO2 emitted. This is of higher importance to Indian steelmakers as the EU was the top finished steel export destination for Indian steelmakers during the April 2022-March 2023 fiscal year with total exports of 2.34mn t, and has been the preferred choice for Indian steel exports in the current fiscal year owing to higher prices compared to other regions. Indian steelmakers have started to take steps to lower their carbon emissions by announcing collaborations with technology companies to decarbonise, and are trial injecting hydrogen in blast furnaces, and increasing the usage of natural gas in ironmaking. By Rituparna Ghosh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Amapá cancela regime especial de ICMS

18/04/24

Amapá cancela regime especial de ICMS

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Conab: Safra de cana-de-açúcar bate recorde

18/04/24

Conab: Safra de cana-de-açúcar bate recorde

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TUI Cruises receives methanol-ready ship

18/04/24

TUI Cruises receives methanol-ready ship

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Canada furthers investment in GHG reductions

18/04/24

Canada furthers investment in GHG reductions

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