Japan’s Sumitomo Corp. has formed a joint venture with the world’s largest sugar company, Brazil’s Cosan S.A. Industria e Comercio, to create the world’s first mass producer of sugarcane biomass pellets for power generation, which is considered an environmentally sustainable alternative to coal.

Cosan Biomassa S.A., which has spent six years developing a commercially viable pellet, plans to produce 2 million tonnes of pellets a year by 2025. Cosan Biomassa has commenced commercial production at its first plant with an initial capacity of 175,000 tonnes in the countryside of São Paulo in December 2015. Cosan Biomassa plans to complete its first shipment of pellets to Europe in the second half of this year.

Through the participation of Sumitomo Corp., Cosan Biomassa will increase its exports to Japan and Europe along with increased domestic sales. It is said that there is a potential of 45 million tonnes per year of sugarcane pellet from the sugarcane farm in Sao Paulo state alone, and Cosan S.A. is a dominant player there through its group company.

“By the year 2030, we foresee that Japan will consume as much as 10 million tonnes of pelletized biomass, or even more. Majority of which would come from overseas. Renewable energy including biomass will play a prominent role in our power generation sector by that time,” said Yoshinobu Kusano, general manager, Biomass Business, Sumitomo Corp.

“Brazil is already among the largest producers and exporters of agricultural commodities in the world.  Pelletized biomass is a new commodity being created to serve the low carbon economy,” said Mark Lyra, Cosan Biomassa CEO.  “By making use of sugarcane residues and benefiting from the economic and environmental advantages that the shift to rail logistics brings to the game, Brazil is positioned to become the Saudi Arabia of renewable energy.”

Faced with new EU emissions targets and the UK’s promise to close all coal plants by 2025, utilities are under pressure to invest in alternative forms of energy. Sugarcane pellets are considered more environmentally sustainable as the sugarcane straw and bagasse used in their production would otherwise go to waste. Each sugarcane harvest in Brazil produces the equivalent in biomass of 1.5 million barrels of oil equivalent a day. While mills need to burn some of the bagasse, the waste cane left from sugar production, to power their own plants and keep enough straw on the ground to protect the soil, the remaining biomass is enough to make 80 million tonnes of pellets a year, which is equivalent to 600,000 barrels of oil equivalent a day.