BP and Bunge form joint venture to produce biofuels

BP and agricultural trader Bunge have announced a joint venture to produce biofuels and bioenergy in Brazil.

BP will combine its Brazilian biofuels and biopower businesses with Bunge’s to create a new, equally-owned, standalone company called BP Bunge Bioenergia. This will allow BP to grow its existing biofuels business by more than half.

Ethanol produced from sugarcane has 70% lower emissions than fossil transport fuels, taking into account the full lifecycle emissions of the ethanol. It is estimated that Brazil’s demand for ethanol will increase by 70% by 2030.

BP Bunge Bioenergia will have 11 biofuels sites in Brazil. The waste biomass will be used to produce renewable electricity to power the sites and surplus power will be sold to the Brazilian national grid. Last year, the two companies produced 2.2bn L of ethanol and exported 1,200 GW of power.

Bob Dudley, BP Group Chief Executive, said: “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."

The deal is expected to be completed in the fourth quarter of 2019.