Canadian plans scrapped | Partners eyeing new plant in Brazil
A Brazilian ethanol giant is investing in a cellulosic ethanol project with Iogen Energy.
Iogen is an Ottawa technology company that devoted the better part of the 2000s trying to build a plant in Western Canada with its business partner, Royal Dutch Shell.
Shell said in April it was scrapping plans to build a 40 million litre facility in Portage la Prairie, Man., that would have used Iogen’s technology to make ethanol out of cereal straw.
Six months later, Raizen Group, the world’s largest producer of sugar cane ethanol, is making an initial investment toward developing a commercial cellulosic ethanol plant in Brazil using sugar cane bagasse, which is the plant material left over after the sugar is extracted from the cane.
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The unspecified investment will cover development and engineering costs to design a facility to be located with one of Raizen’s ethanol plants in Sao Paulo, Brazil.
“We believe Iogen has one of the most robust, well proven and competitive technologies in the cellulosic ethanol business,” Raizen chief executive officer Vasco Dias said in a news release.
Raizen is a $12 billion, 50-50 joint venture between Shell and Cosan S.A., a Brazilian ethanol firm. The venture gave Raizen the rights to use Iogen’s technology because Shell is part owner of Iogen.
Raizen produces 2.2 billion litres of sugar cane ethanol annually, which it sells at its 4,500 fuel service stations in Brazil.
“We’re excited to be working with a major ethanol industry player like Raizen,” Iogen chair Brian Foody said in the news release.
Iogen consultant Jeff Passmore said the company began exploring the Brazilian venture once it determined it couldn’t make the economics work for a western Canadian project.
“It was largely too expensive,” he said.
“We were all disappointed that the project didn’t go ahead in Western Canada, but I would say that (today’s announcement) is a good news story for Canadian technology.”
Passmore said the failure of the Iogen project doesn’t mean there will never be a cellulosic ethanol project in Western Canada.
He said U.S. companies are still looking at their own technology to convert forestry and agriculture residues into ethanol in Alberta and Saskatchewan.
The Brazilian project has the advantage of having access to Raizen’s sugar cane bagasse.
“There is no feedstock collection costs. It’s already at the facility,” said Passmore.
The cost, scope and timing of the Brazilian project are all to be determined.
“Hopefully, there will be an announcement sometime in the first quarter of 2013 once the results of the engineering work are finished.”
