Shell and Cosan announce joint venture plans to establish strong position in world ethanol market
Mon 01 February 2010
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Shell International Petroleum and Cosan S.A. (Cosan) have announced plans for a major joint venture that could be set to dominate Brazil's ethanol market. and enable the export of product around the world. The companies have signed a non-binding memorandum of understanding, with the intention to form a $12 billion joint venture for the production of ethanol, sugar and power, and the supply, distribution and retail of transportation fuels.
According to Shell's press release, the JV would enable Shell and Cosan to establish a scalable and profitable position in sustainable biofuels – one of the most realistic commercial solutions to take carbon out of the transport fuels sector over the next twenty years – by building a market-leading position in the most efficient ethanol producing country in the world.
With annual production capacity of about 2 billion litres and significant growth aspirations, the JV would be one of the world’s largest ethanol producers. In addition, the inclusion of Shell’s equity interests in Iogen and Codexis would potentially enable the JV to deploy next generation biofuels technologies in the future.
There was controversy about the deal after an NGO Anti-Slavery International said that Cosan had been included in the Brazilian Labour Ministry’s slave labour ‘dirty list’ after an inspection in June 2007 by the country’s anti-slavery taskforce rescued 42 people from Cosan’s Junqueira refinery.
Anti-Slavery International said that the enslaved workers had been trafficked from north east Brazil, the poorest region of the country, with false promises of a good job and decent wages.
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