Petrobras signss agreement to supply Vale fuel with renewable content

Petrobras and Vale have agreed to sell Vale diesel containing renewable content. The two Brazilian giants announced the agreement on Friday.

The agreement represents a concrete step by Vale in decarbonizing its operations. It also marks a victory for Petrobras, the state-owned oil company that is working to create a market for its sustainable fuels.

Petrobras and Vale, two of Latin America’s largest companies in terms of market value, are both owned by Petrobras.

Magda Chabriard, CEO of Petrobras, said that the partnership with Vale was yet another step towards improving Petrobras' production capacity and logistic structure in order to provide greener products on the market.

The agreement initially covers the supply of diesel fuel with renewable content to the mining giant's locomotives and trucks, but could eventually be extended to include marine fuel with a 24% renewable content as well as natural gas.

First reported the agreement on Friday, citing familiar sources.

Chambriard stated that Petrobras can provide diesel fuel up to 5% renewable content and marine fuel up to 24 %.

Last week

When she said that Vale had a deal in the works, I was intrigued.

This deal also marks a major milestone for Vale

New leadership

As the company, one of the largest iron ore producers in the world, attempts to improve its relationship to the Brazilian government which has pressed it to invest more money in the country.

Former Finance Head

Gustavo Pimenta

Eduardo Bartolomeo was replaced as CEO by Alicia Ayala earlier this month. Analysts believe that the new CEO's main goal will be to improve ties with government.

Pimenta stated in a press release that he was "very happy" to announce the partnership, which would benefit both companies while creating value for Brazil. (Reporting and writing by Rodrigo Viga Gaier, Fabio Teixeira, Editing by Gabriel Araujo & Marguerita Choy).

(source: Reuters)