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Brazil's Raizen launches second-generation ethanol plant, mulls new contracts

Brazil's Raizen inaugurated its second cellulosic ethanol plant as part of a plan in which four more production units will be opened by the 2025/26 harvest.

Cellulosic ethanol, also known as second-generation biofuel, is a renewable biofuel made from lignocellulosic biomass.

Raizen's new units could bring its total fuel production capacity to 440 MM liters per year (lpy), and the company is considering selling new contracts to expand its plan from 2025 onward.

Located in Sao Paulo state, the new unit has more than double the capacity of its first second-generation plant and would increase the company's total production to 112 MMlpy, according to Raizen.

Its newest plant for cellulosic ethanol, produced from biomass waste from the process of making regular ethanol, received 1.2 B reais ($232.93 MM) in investments.

"We've had very strong demand, especially from European destinations, for this cellulosic ethanol solution, which is competitive and unique in the world," said Paulo Neves, vice president of trading at Raizen.

The company expects to inaugurate two more second-generation ethanol production units this year in Sao Paulo, and two more in 2025, each with a capacity of 82 MMlpy. As a result, the company should reach a production volume of 440 MMlpy in the 2025/26 harvest.

It may start selling contracts again next year in order to continue its growth plan in the area and reach its target of operating 20 second-generation ethanol plants, said Neves.

Cellulosic ethanol has been in high demand in countries looking to speed up their energy transition, notably in Europe, but also in Japan and the United States, he added.

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