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BP announces major expansion into renewables with new biofuels joint venture

23/07/2019
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BP has today announced a ‘major expansion’ into renewable energy thanks to the formation of a 50:50 joint venture with Bunge – a leader in agriculture, food and ingredients – to create a leading bioenergy company in one of the world’s largest fast-growing markets for biofuels.
BP announces major expansion into renewables with new biofuels joint venture
(Image via BP Bunge Bioenergia).

The joint venture will see BP combine its Brazilian biofuels and biopower businesses with that of Bunge to create a ‘world-scale, highly-efficient producer of sugarcane ethanol in Brazil, BP Bunge Bioenergia’. The partnership will see BP’s existing biofuels business grow by more than 50%.

Under their agreement, BP and Bunge will each contribute their existing Brazilian biofuel, biopower and sugar businesses into the new, equally-owned, standalone joint venture. On completion, BP will pay Bunge $75 million, subject to customary closing adjustments, and the joint venture will assume $700 million non-recourse debt associated with Bunge’s assets.

Once the partnership has been finalised, BP Bunge Bioenergia will have 11 biofuels sites in Brazil. With 32 million metric tonnes of combined crushing capacity per year, the joint venture will have the flexibility to produce a mix of ethanol and sugar. It will also generate renewable electricity – fuelled by waste biomass from the sugar cane – through its cogeneration facilities to power all its sites and sell surplus electricity to the Brazilian power grid. BP and Bunge’s assets are largely complementary, with sites in five Brazilian states including three in the key region of Sao Paulo.

In 2018, the two businesses produced a total of around 2.2 billion litres of ethanol equivalent and, after powering the sites, exported 1,200 gigawatt hours of low-carbon biopower to the national grid. Together the two businesses currently employ over 10,000 people in Brazil.

The combined businesses will be ranked the second largest player in the sugar cane ethanol biofuel industry in Brazil by effective crushing capacity.
The new venture BP Bunge Bioenergia will employ a total of 10,000 people across Brazil.
(Image via BP Bunge Bioenergia).

Commenting on BP’s ongoing expansion into renewables, Bob Dudley, BP group chief executive, said:

“This is another large-scale example of BP’s commitment to play a leading role in a rapid transition to a low carbon future. 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.”

Dev Sanyal, chief executive of BP Alternative Energy, said:

“In one step, this will allow BP to significantly grow the scale, efficiency and flexibility of our business in one of the world’s major growth biofuels markets. With a shared commitment to safety and sustainability, bringing together our assets and expertise will allow us to improve performance, develop options for growth and generate real value. BP Bunge Bioenergia will be well-placed to support Brazil’s increasing demand for both low carbon biofuels and biopower.”

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Recent Comments
This will put more pressure on the Amazon rainforest and, over time, evolve into reputational suicide for BP.
Arild Dyrseth, 24 July 2019
If you need instrument technician I'm willing to apply in your company.thank you
Sammy T. Vergara , 25 July 2019
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BP announces major expansion into renewables with new biofuels joint venture - Time to read 3 min
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