The beginning of the entire process lies in our raw material. We invest in sugarcane because it is one of the most efficient sources for converting solar energy into affordable biomass. According to calculations from the Federation of Agriculture and Livestock of the state of Goiás (FAEG), presented by the Brazilian Sugarcane Industry Association (UNICA), one hectare of sugarcane produces an average of 8,000 liters of ethanol. Compared to corn, the raw material used in most of the global production, the ratio is 3,000 liters per hectare.

Another advantage is that the energy balance of sugarcane ethanol is much higher than that of corn ethanol. This is due to the fact that, because it has smaller molecules, sugarcane starts its fermentation process in a little less than 11 hours. For corn, carbohydrates need to be broken down into sugars before fermentation, resulting in a fermentation time of 40 to 70 hours.

In addition, sugarcane by-products have a higher value added than corn by-products, increasing the potential for reuse, recovery, and recycling of materials and energy—the basis of the circular economy. Innovation plays a key role in this: we apply natural fertilizers to the fields in the form of vinasse, a by-product of the distillation process of the sugarcane juice; filter cake, which comes from the filtration of this juice; and ash, resulting from the burning of bagasse. Approximately 75% of our raw material is water, which is evaporated after the crushing process and condensed to be used in the industry. Filter cake and vinasse are also used for energy generation in our biogas plant, as is sugarcane bagasse, from which we produce electricity for our own use and for trading. Sugarcane bagasse is also an input for our second-generation ethanol (E2G). This reduces our carbon footprint by 35% compared to the processing needed to produce first-generation ethanol. By doing this, we have increased our production by up to 50 percent without expanding the planting area—a milestone for responsible land use and conscious production.

There are favorable perspectives, based on the trends for greater relevance of renewable sources, accelerated by the pandemic and driven by public policies, such as RenovaBio and the appreciation of sugar in the international market.

Potential for increasing agricultural productivity of sugarcane

Source: Raízen

We are in the right place, at the right time, and with the right culture. Brazil is a continental country, with plenty of land, a good climate, and differentiated export logistics. In this scenario, in line with our purpose of leading the energy transition and converging with a global agenda that is increasingly moving toward a low-carbon economy, at the end of the 2020/2021 harvest, we announced the commercial agreement for the integration of Biosev's assets. The company is a Brazilian subsidiary of Louis Dreyfus Holding, composed of nine strategically located production units (six in the State of São Paulo, three in Mato Grosso do Sul, and one in Minas Gerais) and an installed crushing capacity of up to 32 million tons of sugarcane. The operation also includes energy cogeneration, with an export capacity of up to 1.3 GWh of electricity/year and an area of 233,000 hectares of planted sugarcane. The transaction strictly follows our principles of capital discipline and will not impact leverage, preserving the investment grade credit profile assigned by the three largest global rating agencies.

After the integration, approved by the Administrative Council for Economic Defense (CADE), we will have 35 bioenergy parks with a total installed capacity of 105 million tons of sugarcane and approximately 1.3 million hectares of cultivated area. We will also expand the availability of biomass to expedite the energy transition as we accelerate monetization of the ethanol ecosystem and increase our share in the sugar value chain. We will also gain scale in logistics and trading, complementing the existing portfolio. With these operational, commercial, and financial synergies, our estimated gain is R$6 billion over ten years.

Our integrated ecosystem also includes qualified operations at fuel distribution bases at airports and sea ports that reach global markets; the robust logistics we have developed to take the Shell brand to service stations; and customers being able to make payments right in the palm of their hands via the Shell Box app.

We operate end-to-end, with the understanding that bringing people and business together will lead us to unique opportunities which, if properly managed, can generate unique experiences that are made possible because of our differentiated portfolio of products and solutions.

External recognition of our performance included, in 2021, being featured in Exame magazine's ESG Guide as the most sustainable company in the energy sector.