Acelen, a downstream company created by Mubadala Capital, announced plans to invest over BRL12bn ($2.44bn) over the next 10 years in Brazil towards the production of renewable fuels.

A memorandum of understanding (MoU) was signed in Abu Dhabi, UAE by the company in this regard with the government of Bahia. The MoU is aimed at producing renewable diesel and Querosene de Aviação or sustainable aviation kerosene (QAV) to help expedite the energy transition of Brazil.

Acelen plans to build a new biorefinery in the Brazilian state of Bahia to produce one billion litres per year of renewable fuels, which is equivalent to the annual supply of 1.1 million vehicles.

The biorefinery will have a production capacity of 20,000 barrels/day. Its production will be aimed initially at the foreign market, where green diesel and sustainable aviation fuel are approved already for sale as well as consumption.

The company expects the project to move BRL85bn ($17.3bn) in the Brazilian economy. Besides, the biorefinery project is anticipated to create 90,000 direct and indirect jobs and decrease CO2 emissions by up to 80% by replacing fossil fuels.

Acelen plans to produce renewable diesel and sustainable aviation kerosene by subjecting vegetable oils and animal fat to hydrotreatment. Production from the new Brazilian biorefinery is anticipated to be achieved in Q1 2026 with work to begin on it as early as January 2024.

The biorefinery will be designed to have 100% synergy with the Mataripe refinery owned by Acelen in the Mataripe district. The biorefinery will leverage the existing utilities, tanking, and logistics infrastructure of the Mataripe refinery.

For the hydrotreatment of fuels, a sustainable hydrogen generation facility will be constructed, said Acelen.

Acelen’s CEO Luiz de Mendonça said: “Acelen’s path towards energy transition began at the beginning of its operations, with the modernisation of the Mataripe Refinery and reduction of its environmental impact.

“Now, we are taking a strategic step in our mission to play a leading role in the energy transition in a solid way, with a unique and transformative project, renewing the company’s commitment to a more sustainable future.”

The first phase of the biorefinery project will see the use of soybean oil and complementary raw materials. In the second stage, Macaúba oil, which is derived from a Brazilian tree, and palm oil will be used.

According to Acelen, Macaúba oil has high energy potential and is yet to be exploited on a commercial scale.