Shell and Cosan Partner for Ethanol Production

Royal Dutch Shell, an European oil firm, and Cosan SA, a Brazilian ethanol manufacturer, have partnered for producing ethanol. The two companies have signed a $12-billion agreement towards making ethanol from sugarcane along with the production and distribution of the biofuel.

This binding agreement signifies the largest investment ever made by an oil company in the history of Brazil’s ethanol industry.

Cosan will be contributing its existing capacity in order to crush sugar to the extent of 60 million tons annually at its 23 mills in order to produce 528 million gallons (2 billion liters) of ethanol.

Royal Dutch Shell’s contribution would be in the form of cash amounting to $1.6 billion along with the company’s equities that exist in Codexis and Iogen Energy, the two companies in the field of biofuel research, as well as its aviation fuel business in Brazil.  Both the companies would put their retail sites in Brazil into the distribution network. They will explore the global expansion of their respective sales and production.