This excerpt taken from the PBR 20-F filed May 22, 2009.
We aim to become a major producer of biodiesel in Brazil and actively participate in Brazils growing ethanol industry, particularly in the production, transportation and exportation of ethanol. Brazil has highly favorable climate and soil conditions for growing sugarcane and vegetable oil crops and is an important player in the international biofuels market.
Ethanol from sugarcane is widely used as a substitute for gasoline in Brazil. We do not currently produce ethanol, but distribute it through our Distribution business segment. We intend to expand our participation in the ethanol business through partnerships with ethanol producers and international offtakers where our role would primarily be as a producer, transporter and exporter of Brazilian ethanol. We also intend to participate in
the growth of the domestic ethanol market by investing in ethanol plants that will reach 63.6 mbbl/d of production by 2013.
In recent years, we invested in the introduction of biodiesel into the Brazilian market. By law, all diesel sold in Brazil was required to be at least 2% biodiesel since January 2008; this proportion was increased to 3% in July 2008. In an effort to adhere to this mandate, we have been securing and blending biodiesel supplies and furnishing these to smaller distributors as well as our own service stations.
We have signed contracts to secure the purchase of vegetable oils from family farmers and industrial producers in order to supply our three biodiesel plants with a combined capacity of 2,950 bbl/d. These plants are located in Northeastern Brazil at Candeias and Quixada and in Southeastern Brazil at Montes Claros. We intend to increase our participation in the industry, with a targeted installed capacity to produce 11 mbbl/d of biodiesel in Brazil by 2013. The creation of Petrobras Biocombustível in July 2008 to consolidate all initiatives regarding ethanol and biodiesel production reinforces our commitment to the environment and social responsibility.
We have also developed a new refining technology (H-Bio) that allows us to introduce vegetable oils into our existing refineries to produce a cleaner form of diesel. Six of our refineries are already prepared to use H-Bio technology and we plan to adapt all of our refineries for this process, which will give us increased raw materials flexibility and access to markets seeking cleaner forms of diesel.