Brazilian ethanol producers rally behind Petrobras joint venture plans – BNN Bloomberg

(Bloomberg) — Brazilian ethanol producers including Raizen SA and Cosan SA rallied after Petrobras announced it was in talks with “major” biofuel producers to form a joint venture.

Raizen shares rose 5.8% and Cosan rose 7.3%, their biggest intraday gains in months.

Petroleo Brasileiro SA plans to return to the ethanol market as a hedge against declining gasoline demand, Mauricio Tolmasquim, energy transition project manager, said during a news conference Friday. The state-controlled oil giant is considering producing ethanol from sugar as well as corn, he said. Petrobras plans to reach 2 billion liters of ethanol per year, he said.

“How can we stay big if gasoline is losing market share? Entering the market of our main competitor, ethanol,” Tolmaskim said, noting that gasoline demand is expected to decline in the long term.

The Rio de Janeiro-based company committed $2.2 billion to invest in ethanol production in its latest five-year business plan. Tolmaskim said the company plans to quickly enter the ethanol market, without providing further details.

–With assistance from Leda Alvim.

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