Brazil Raizen to Build More Cellulose Ethanol Plants

Brazil's Raizen said it plans to start building additional cellulose ethanol plants after production costs for the second generation biofuel become competitive with conventional ethanol costs, Chief Executive Vasco Dias said on Wednesday.

Raizen, a joint venture between local conglomerate Cosan SA and Royal-Dutch Shell Plc, inaugurated its first second-generation biofuel plant in Piracicaba.

The plant currently produces cellulosic ethanol at about 1.40 reais a liter, compared with 1.15 reais/ltr for conventional ethanol. Cellulosic ethanol costs are expected to converge on conventional costs in 2017 and drop below them in 2018, Raizen executives said.

(By Marcelo Teixeira)