By Oliver Griffin
SAO PAULO, July 14 (Reuters) – Brazilian firm Energis8 expects to produce around 1 billion liters of sustainable aviation fuel annually, Chief Executive Marcos Guerra told Reuters in an interview, adding that important planning should be finished by the end of this year.
The company, also known as E8R, will produce aviation fuel via a tolling model where clients supply Energis8 with ethanol to turn into SAF for a fee, Guerra said on Monday, adding that the mechanism will be cheaper than spot prices.
Brazil is a major ethanol producer. Though the sector has long been the preserve of the country’s sugarcane producers, ethanol produced from corn and other grains has exploded in recent years, with industry leaders calling for expansion into maritime and aviation fuels.
The project is expected to start running in 2031 and is forecast to need capital expenditure of $1.3 billion, Guerra said, adding that he was confident that the global move toward using renewables rather than fossil fuels is only going to build momentum.
“This decision is not going to be taken back,” he said in Sao Paulo, adding that the project will be built in Paulinia, in Sao Paulo state, to take advantage of its proximity to major aviation hubs like Guarulhos and Viracopos Campinas airports.
Though SAF is currently more expensive than fossil-based jet fuel, costs will surely move towards parity in the future, Guerra said.
“There will come a moment in aviation where renewable fuel will be cheaper or level with oil,” he said, noting that the tolling model would mitigate the exposure to SAF price volatility.
The project will require 1.7 billion liters of ethanol per year to convert into SAF, he said, with clients to be charged a fee per liter for the conversion.
While Guerra currently controls 85% of the company – with 15% being held by three other executives he declined to name – 40% of project funding is expected to come from equity while the rest will come from debt, he added.
(Reporting by Oliver Griffin in Sao Paulo)
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