Italian oil and gas company Eni has announced it would be investing in farming projects in several African and Asian countries in a bid to increase its production of biofuel feedstocks by one fifth by 2025, Reuters quoted two senior executives at the energy group as saying.
Eni was increasing its production of biofuel feedstocks to secure supplies and reduce the risk of volatility in the commodity market, the 1 June report said.
“Our goal is to cover 20% of (our) biofuel production with feedstock coming from our agri-business by 2025, which is a relevant threshold since we have increased our output targets,” Eni Energy Evolution chief operating officer Giuseppe Ricci told Reuters.
In February, Eni announced it was aiming to increase its biofuel production from its current level of 1.1M tonnes/year to more than 3M tonnes/year of biofuels by 2025 and more than 5M tonnes by 2030, Reuters wrote.
According to forecasts by analysts at Barclays bank, global biofuel demand is forecast to triple to 30M tonnes by the end of the decade.
Against this backdrop, Eni had signed deals with several countries to identify degraded land where farmers cultivated crops that did not compete with the food supply chain, the report said.
“We have pools of local farmers who cultivate for us ... we get seeds, squeeze them and take the oil to our bio-refineries,” Eni Natural Resources chief operating officer Guido Brusco was quoted as saying.
The oil could also be derived from agro-industrial waste and residues, the report said.
Around 700,000 farmers were expected to be involved in Eni’s farming activities by 2026, under deals signed with Angola, Benin, Guinea Bissau, Ivory Coast, Kenya, Mozambique, Republic of Congo, Rwanda and Vietnam, Reuters wrote.
Feasibility studies are also being conducted in Italy and Kazakhstan, according to the report.
The business model was similar to the one Eni applied in its hydrocarbon business, the report said.
“We are replicating the vertical integration we have in other commodities and the logic is to reduce volatility, secure the raw material, and have more control over costs,” Brusco added.
In addition, Eni was set to make a final investment decision on a new bio-refinery in Livorno, Italy, Ricci was quoted as saying. This would add to the company’s two existing Italian bio-refineries and two potential new plants in the USA and Malaysia.