SAO PAULO / RIO DE JANEIRO: Brazilian energy company Raizen SA and its shareholder Royal Dutch Shell have signed an agreement with the Ferrari Formula 1 team for the supply of high-performance second-generation ethanol from next year when the main category of motorsport 10 percent ethanol mixture in gasoline is used.
The International Automobile Federation, known as the FIA, wants F1 cars to use only sustainable fuels by 2025.
Shell, which has a 70-year partnership with Ferrari, expects the use of ethanol on the racetrack to encourage more consumers to use it as global initiatives like India advance its goals of increasing the use of ethanol in gasoline blending.
Raizen, Shell’s joint venture with Brazilian sugar and ethanol maker Cosan SA, is one of the few energy companies to commercially sell second-generation ethanol, which is made from non-food biomass and has 86 percent fewer emissions than fossil fuels.
The second-generation ethanol used by Ferrari is made from sugarcane bagasse, a by-product that used to be thrown away. According to Raizen, second-generation ethanol is already being produced in a Raizen plant in the countryside of the state of Sao Paulo and increases ethanol productivity by 50 percent without additional cultivation area.
The company is building a second cellulosic ethanol production facility, which will increase second-generation annual ethanol capacity from 40 million liters to 120 million liters by 2023.
“We are currently producing 4 billion liters of first generation ethanol, so we could have an additional 2 billion liters of second generation without increasing the acreage,” said Ricardo Mussa, CEO of Raizen.
Mussa said that each new unit to produce second-generation ethanol costs between 800 million reais ($ 146 million) and 1 billion reais ($ 183.2 million). The CEO added that Raizen could have up to 35 second generation ethanol units.
The Raizen deal could give Ferrari an edge on the fuel mix, as the other teams will most likely use first-generation ethanol in the first 10 percent renewable fuel mix. “We’re not going to deliver second-generation ethanol to the other teams,” said Istvan Kapitany, vice president of Shell Mobility, in an interview with Reuters.
Kapitány said Shell believes the fuel can make the Ferrari team more competitive. After F1 cars use second generation ethanol, it will be rolled out to general consumers, the manager added, as Shell has already done with fuels and lubricants that were initially tested on the racetrack. Ferrari, Shell and Raizen did not provide any information on the financial terms of the partnership.
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