Shell is one of the largest blenders and distributers of biofuels worldwide. In 2016, we used around 9.5 billion litres of biofuels in the petrol and diesel we sold worldwide.
In the coming decades, we expect biofuels to play a valuable part in the changing energy mix. They can be a cost-effective way to reduce carbon dioxide (CO2) emissions in the transport sector, as long as their production is managed in a responsible way. In addition to closely understanding their emissions, we want to ensure other environmental impacts from their production are well managed (such as impacts on soil, air and water) and that social impacts are beneficial for local communities.
Shell purchases biofuels to blend into our fuels in line with country specific regulations. We continue to support the adoption of international sustainability standards including the Round Table on Responsible Soy, the Roundtable for Sustainable Palm Oil (RSPO) and Bonsucro, a non-profit organisation, for sugar cane. We also support the Roundtable for Sustainable Biomaterials and the International Sustainability and Carbon Certification (ISCC) scheme both of which can be used for any feedstocks.
The majority (75%) of the biofuels we purchase are from feedstocks that come from North America or Europe. In addition to good agricultural practices, both regions have sustainability rules that include land-use restrictions and set controls for greenhouse gas emissions.
We have specific purchasing policies for biofuels made from palm oil, soy from South America or sugar cane, to increase our use of independently certified sustainable biofuels. Every year, 100% of the palm oil that Shell blends is either independently certified by RSPO or the ISCC, or covered by offsets from the RSPO certificate trading system. In Argentina, we have assessed several of our cane suppliers against the Bonsucro standard and are encouraging their full certification. We are also setting up several projects in the country, aiming to increase the amount of sustainable soy and cane.
At the end of 2016, 30% of the sugar-cane ethanol and South American soy biodiesel used in biofuels that Shell blended was either independently certified as sustainable, audited against robust standards, or offset by purchasing soy or cane sustainability credits.
Producing biofuels with Raízen
In 2016, our joint venture Raízen (Shell interest 50%) produced more than 2 billion litres of low-carbon ethanol from Brazilian sugar cane. Around 40% of Raízen’s production was certified as sustainable to the standards set by Bonsucro.
Raízen’s production process is designed to minimise its environmental impact. The company’s harvesting process is already 98% mechanised which improves worker conditions and operational efficiency. By the end of 2016, 16 of Raízen’s 24 sugar-cane mills were certified to the Bonsucro standard.
Raízen purchases around half of the sugar cane it uses as a raw material from independent suppliers. The company is working in partnership with two non-governmental organisations, Imaflora and Solidaridad, to support these suppliers to become more sustainable producers. The suppliers complete a confidential self-assessment against a list of sustainability criteria which enables Solidaridad to prepare individual improvement guides. Since the programme started in 2014, more than 1,300 suppliers have completed the assessments and are working on improvements.
In 2015, Raízen opened its first cellulosic ethanol plant at its Costa Pinto mill in Brazil. Production in 2016 was almost 6.9 million litres, and over time the mill is expected to produce around 40 million litres a year of advanced biofuels from sugar-cane residues.
Developing advanced biofuels
We continue to invest in new ways to produce biofuels from sustainable feedstocks such as waste and cellulosic biomass from non-food plants. Shell has two pilot plants in the USA, which convert cellulosic biomass into a range of products, including petrol, diesel, aviation fuel and ethanol.
Another pilot plant is being installed in Bangalore, India, that will demonstrate a technology called IH2 that turns waste into fuel using a two-stage catalytic reaction. The technology was developed by a USA-based research centre, the Gas Technology Institute.