The Brazilian state of Ceará wants to be the first in South America to set up a production hub to supply Sustainable Aviation Fuels to the European market. As new and more stringent emissions regulations become standard around the globe, countries and airlines will be forced to move toward low carbon fuel alternatives.
The Ceará branch of the National Service for Industrial Training (SENAI/CE) signed an international partnership agreement with several European companies and organizations on Oct. 27. The agreement aims to assess the possibility of setting up an electro-sustainable aviation fuel (e-SAF) hub in Northeast Brazil.
This partnership is part of the NedBraSAF project and brings together SENAI Ceará, the Port of Pecém, the Port of Rotterdam, and Green Energy Park, among others. The project also received support and co-funding from the European Union and Germany’s Ministry of Economic Affairs and Energy (BMWE).
While this project is promising, the timeline for the project, as well as production levels and facility construction details, remain undisclosed.
The goal behind the NedBraSAF project is to help countries, including those in the EU, meet the ReFuelEU Aviation mandate which aims to have sustainable aviation fuels represent at least 1.2% of the total aviation fuel supply in 2030, with an additional 5% and 35% being added in 2035 and 2050, respectively.
E-SAF is a type of sustainable aviation fuel. To be competitive in the fuel market, it is necessary to produce a low-cost, low-impact sustainable aviation fuel. This will require the investment in renewable electricity, electrolyzers, and certification of sustainable sources for fuel and feedstocks, along with an integrated logistics chain for the transport of sustainable feedstocks and products to the end user.
Brazil’s abundant, low-cost energy could give it an advantage in the production of green hydrogen and synthetic fuels for export.
Pecém strengthens European connections
Brazil’s Port of Pecém is a joint venture between the Ceará State government and the Port of Rotterdam with a 30% / 70% split in ownership respectively.
In May of 2016, an agreement was announced between the Port of Pecém, the Port of Rotterdam and Duisport of Germany to transport green molecules (e.g. green hydrogen) from Brazil to Europe by 2029.
NedBraSAF goes further than that with the supply chain of synthetic aviation fuels, taking in everything from production and storage, to handling at port, and distribution for sales.
Logistics and energy infrastructure are already getting an boost with Brazil’s Congress approving $123.5 million of external credit, $90 million of which is earmarked for the Pecém Energy Transition Program, and $33.5 million for additional spending under the Pecém Verde program. Although these programs will certainly benefit the green hydrogen sector, they are not strictly tied to the NedBraSAF initiative.
SENAI Ceará plans to address technological and human resource needs as the sustainable aviation fuel (SAF) market grows.
“To go beyond the ability to generate energy, we need to create the ability to transform it, technology and qualified personnel,” says energy transition consultant Isabela Maciel of SENAI.
Brazilian market creates additional opportunities
The domestic market is larger than the export market. Brazil’s Fuel of the Future law has instituted the National Sustainable Aviation Fuel Program, ProBioQAV, that requires airlines to cut their domestic flight emissions.
ProBioQAV establishes reduction targets for 2027 of 1%, 2030 of 3% and 2037 of 10%. While the European regulations mandate the exclusive use of synthetic fuels, the Brazilian regulations enable a variety of SAF production technologies.
SAF production is likely to positively impact the market for Hydrotreated Vegetable Oil, HVO, or renewable diesel. As the fuels share some production methods and raw materials, innovations and investments in SAF may also benefit HVO supply.
However, the lack of scale in the production of renewable diesel remains the biggest bottleneck to making it competitive in the Brazilian market.
Olímpio Alvares, the environmental committee coordinator of Brazil's National Association of Public Transport (ANTP), said expanding production of HVO at the regional level can make its price comparable to that of conventional biodiesel in the near future.
Alvares said mandate mixing renewable diesel and regular biodiesel will provide more stable demand, spurring more investment in biodiesel production, which was also done for the biodiesel program in Brazil.
Using HVO over regular biodiesel means not having to modify engines and transport infrastructure to use biodiesel.
Pure HVO lowers diesel transport fossil fuel related emissions. It has less particles and is less toxic than conventional biodiesel.
While HVO is more beneficial, it requires a larger production, and the price needs to be more competitive to gain larger market share.
The development of the Brazilian SAF industry will increase renewable fuels diversity. Although more support of this industry is still necessary to make HVO more cost competitive compared to fossil diesel.
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