Brazil must review its mandated blend of biofuels in order to avoid over-regulation and to help increase the overall market for cleaner fuels, an executive with state-controlled oil company Petrobras told the Rio Oil & Gas 2020 forum on Wednesday.
Current Brazilian rules requiring a 12% blend of methyl ester biodiesel with conventional diesel are no longer sufficient to keep the country up to speed with a global drive towards cleaner fuels, Claudio Mastella, Petrobras’ executive manager for domestic market commercialisation, said on the digital event.
Taking part in a panel entitled “Biofuels: the road to a free market", Mastella noted that some countries are setting more ambitious quantitative decarbonisation criteria, with measurable outcomes.
“Rather than looking at which type of biofuel is being used, allowing for a possible cornering of the market by less efficient fuels, it would be more effectively to consider the environmental gain that a given fuel brings,” he said, arguing that such approaches are working in locations with the highest expectations on decarbonisation, such as California and the European Union.
This change is needed to open up space for more advanced renewable biodiesels and “will allow fuels to be sold to consumers with less pollution along the whole supply chain", Mastella claimed.
The Petrobras executive pointed out that newer forms of renewable diesel can produce 15% less greenhouse gas than methyl ester biodiesel.
Biofuels support from Brasilia
Mastella offered support for the Brazilian government’s Renovabio incentives for providing leverage for the growth of biofuels in the country’s fuels matrix, but spoke out against creating specific regulatory categories of fuel considered eligible for benefits.
“Renovobio helps increase the overall competitiveness of biofuels in the Brazilian energy matrix, but also accelerates the development and commercial application of more advanced biofuels,” he said.
In another downstream session at Rio Oil & Gas 2020, Total’s president of refining and chemicals Bernard Pinatel laid out the French company’s own plans for biodiesels within a wider context.
Total’s ambition to be carbon neutral by 2050 means the company is planning for a portfolio mix, which Pinatel said will be broadly made up of 40% gas — a large part of which will be biogas and low-carbon hydrogen — plus 40% electricity — much of which will be generated by renewable energy.
The remaining 20% of Total’s likely future energy mix will be from oil, but about of quarter of this will be from biofuels, he added.
“The segment of renewable diesel is a very attractive market for us. It is a premium grade product with no technical cap on demand potential, it has good entry barriers to competitors, and it is pretty capital intensive with some technology to understand. This points to a current lack of capacity, which tips the balance in favour of the producer,” Pinatel said.
Right frameworks needed
Pinatel also homed in on ambitious plans to reduce emissions in the air transport sector as a plan that relies squarely on biofuels.
“It is important to create the right market conditions so governments and states have to put the right incorporation mandates in place in terms of regulations, tax incentives… and the outcome should not be too complex,” he said.
Total’s investments in renewables energies — which include major investments in solar power in Spain — have expanded to include investing $600 million in retrofitting two French refineries for renewable diesels.
The first project, at Chateauneuf-les-Martigues, produces HVO (hydrogenated vegetable oil) biodiesel and biojet products, among others.
A second, announced in September, will focus on producing jet fuel from waste residues at the company’s Grandpuit refinery, near Paris.