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Abu Dhabi’s state investment company, Mubadala Capital, has signed an agreement to build a plant in Brazil to produce sustainable aviation fuel. The $2.5 billion project, to be built in the northeastern state of Bahia, will be managed by the company’s Brazilian subsidiary, Acelen.
Construction is expected to begin in January 2024, with production planned for the first quarter of 2026.
Once done, The plant is expected to produce 1 billion liters of diesel-like fuel Annually made from hydrotreated vegetable oil. The project will also inject R$85 billion into the economy, create 90,000 jobs and reduce carbon emissions by up to 80%.
The goal of the project is for Brazil to use its rich natural resources to establish itself as a sustainable aviation fuelHowever, since Brazil does not yet have any regulations on renewable fuels, none of these fuels will be sold domestically.
This is not the first time Mubadala has used renewable fuels in Brazil. In 2021, the company bought another company that makes soybean biodiesel. In addition, Acelen owns Brazil’s second-largest refinery in the state of Bahia, which means the company already has the knowledge of how to produce refined products.
The first phase of the project will focus on extracting raw materials such as soybean oil from Brazil’s large-supply agricultural projects. The second phase is expected to focus on fuel production using the country’s palm oil and makaba oil resources. The entire project will use the existing infrastructure of the Mataripe refinery, which currently produces petrochemicals.
The start-up of the plant comes at a time when Airlines increasingly demanding clean fuels operate their fleets. Companies are looking around the world for places that can supply large quantities of the materials needed for sustainable aviation fuel. “We will produce sustainable fuels globally, involving Brazil in the development of an international sustainable chain,” said Luiz de Mendonca, CEO of Acelen.
Aviation is just one component of the expanding bilateral relationship between the UAE and Brazil. In Abu Dhabi, UAE President Mohamed bin Zayed and Brazilian President Lula da Silva signed a number of agreements aimed at boosting mutual trade and investment.
Abdullah Al-Marri, UAE Minister of Economy, stated that “the total non-oil foreign trade between the UAE and Brazil will exceed the US$4 billion mark in 2022, a 32% increase from more than US$3 billion in 2021”.
Furthermore, both countries are working to improve the sustainability of their economies amid the ongoing climate crisis. The UAE is expected to host the UN’s COP28 climate change conference later this year, while Brazil is a candidate to host COP30 in 2025.
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