Shell and Cosan commit to Brazil

SHELL and its Brazilian energy partner Cosan have agreed to form a permanent joint venture in a move they say reaffirms their commitment to their sugar, ethanol and fuels distribution interests in the country.

The companies formed a temporary venture called Raízen in 2011 following a non-binding agreement to work together in 2010. Raízen is now the world’s largest individual producer of sugar cane, producing in 2015 more than 4m t of sugar, along with 2bn l of ethanol and 2.2 GWh of cogenerated energy. The company also operates more than 5,800 Shell-branded service stations in the country.

Cosan CEO Marcos Lutz said: “Transforming Raízen into a permanent joint venture strengthens the partnership we built with Shell over the last five years, while paving the way to continue our successful journey in Brazil.”

John Abbott, Shell’s Downstream director, added: “Low-carbon, sustainable biofuels play an important role today and will be required long term for heavy duty and long distance transport. We are pleased with Raízen’s strong performance. This commitment reaffirms the stability of Shell and Cosan’s partnership, and our shared view of the long-term objectives and value of the business.”

The partnership when it was first formed combined Cosan’s sugar cane crushing, ethanol production and cogeneration assets with Shell’s downstream assets in Brazil and its interests in Iogen Energy and Codexis, enabling the venture to take advantage of emerging technologies for producing cellulosic ethanol.