By IANS
Rio de Janeiro : Brazilian state oil company Petrobras has said that it has formed a 50:50 joint venture with Japan’s Mitsui Group to produce bio-fuels, with a focus on supplying ethanol to the Japanese market.
The documents sealing the deal were signed Wednesday for formation of the venture in Brazil, Petrobras said in a statement, Spain’s EFE news agency reported Friday.
Besides ethanol production, the new company, Participaçoes Nippo Brasileira em Complexos Bioenergeticos S.A., plans to invest in projects to generate electricity from bagasse, the biomass left over after sugarcane is crushed to extract its juice, one of the residual products from ethanol produced in Brazil.
The new projects seek to meet future Japanese demand for ethanol, said Petrobras, the largest corporation in Brazil.
Ethanol, made from crops such as sugarcane and corn, is basically grain alcohol. The clean-burning fuel is usually mixed with unleaded gasoline and can be pumped into vehicles at existing service stations.
Last June, Petrobras sent its first shipment of ethanol to Japan, which deregulated the fuel alcohol industry in April 2006.
Petrobras and Nippon Alcohol Hanbai created the Brazil-Japan Ethanol joint venture two years ago to distribute ethanol produced from sugarcane in Brazil to Japanese customers.
The Japanese market has the potential for ethanol use of 300 million litres per year, according to Petrobras estimates.
Brazil, the world’s largest producer and exporter of ethanol made from sugarcane, has foreign sales of nearly 3.5 billion litres annually.