Paraguay wants to build South America’s largest biofuels plant

RIO DE JANEIRO, BRAZIL – The announcement of a biofuels plant installation in Paraguay, the largest in South America, has divided the country.

The company and the government emphasize the project’s economic impact and that the soybean will not be deforested, but environmental organizations doubt the commitments.

They are fuels produced from raw materials of agricultural origin or organic residues and are therefore considered renewable. Some of the most widely used are biodiesel and bioethanol.

The Omega Green plant seeks to produce renewable diesel (HVO), renewable aviation fuel (HEFA-SPK), and process by-products (propane, butane, pentane, naphtha, acid gases, and hexane).

It is expected to start operating in 2025 and will be located in the city of Villeta, 33 kilometers from the country’s capital, Asunción.

Biofuels are considered renewable fuels because they are produced from agricultural raw materials or organic waste. In the case of Omega Green, they will be made from animal fats, used cooking oils, and soybeans.

Several airlines have already begun testing and using biofuels to reduce their greenhouse gas emissions.

It is expected to lead to a massive increase in palm and soybean oil demand, which would generate seven million hectares of deforestation globally by 2030.

The project in Paraguay is being promoted by the Brazilian company BSBIOS/ECB Group. The company was founded in 2011 by Brazilian businessman Erasmo Carlos Battistella.

Known as “the king of biodiesel”, Battistella wants to expand its production further. Some of the company’s business has been denounced in Brazil.

Although it was announced in 2019, the construction was delayed by the Covid-19 pandemic and is now scheduled to start in December this year with an investment of US$1 billion.

Company spokespersons told Diálogo Chino that Paraguay was chosen for its legal security, financial stability, and low energy costs.

LOCATION OF THE PLANT

The plant will be located in an industrial complex of 384 hectares. The land was acquired from former President of the Republic Luis Ángel González Macchi (1999-2003), according to Teodosio Gómez, mayor of Villeta.

In the area, industrialization has brought parallel processes of dispossession of territory and loss of community, according to a study carried out by the global network Stay Grounded, Biofuelwatch, Heñói, and Global Forest Coalition, which analyzes the plant project and addresses the reality of the Santa Rosa community in Villeta.

The territory of Santa Rosa, a community of 50 people, is close to the site where the Omega Green factory will be installed and where several industries already exist.

Many families have moved in recent years due to the isolation caused by the nearby industries, which have limited their freedom of movement by buying land.

Residents, who preferred not to be identified, told Diálogo Chino that they are not against another industrial project like Omega Green’s, as long as it does not generate environmental damage to the area.

The mayor of Villeta acknowledged that many families from Santa Rosa opted to sell their land and leave the area in the face of industrial expansion and the limitations on movement.

However, he favored the project because of its economic benefits. According to the company, the plant will contribute US$8 billion to Paraguay’s GDP over ten years.

THE OPERATION

According to the environmental impact study, the project proposes a production volume of 20,000 barrels per day of renewable diesel, renewable jet fuel, and by-products.

The BSBIOS/ECB Group said it would only use certified feedstock, as this is a requirement of the biofuel buyers.

The group has already signed contracts with Shell and BP for the supply of biofuels that should occupy 90% of the plant’s capacity, according to Paraguay’s Ministry of Industry and Commerce.

Depending on demand, the company will also seek to offer its production to the domestic market.

The plant will have an electrolysis unit to generate hydrogen, the raw material for the biofuel, using water and electricity from clean, renewable sources. The Paraguay River will be used mainly to capture river water and pipe it to the plant through adductors.

For Ramiro Samaniego, Vice Minister of Industry and Commerce, Omega Green is an example of the type of project and investment that Paraguay wants.

“The plant will add value to Paraguay’s soybean production, which today is mainly destined for export,” he said.

Samaniego affirmed that they are working “very closely” to ensure compliance with environmental protection.

At the moment, he said, they are working with producers to certify their soybean production. Such is the case of a soybean cooperative in Alto Paraná, a department with an expansion of monoculture.

The director of Environmental Impact Assessment of Paraguay’s Ministry of Environment, Carolina Pedrozo, declined to comment for this article.

BIOFUEL FEEDSTOCKS

“How sustainable can biofuel for aviation be, and why would the first jet biofuel refinery in South America, and one of the largest in the world, be built in Paraguay?” environmental organizations argue in their study of the project in Paraguay.

The low level of aviation in Paraguay and the potential negative impact of the production of raw materials that will serve as inputs, mainly soybean oil and animal fats, on people and the territory, they say, are the main reasons for the questioning.

“Animal fats would come from the by-products of cattle slaughter for export. Paraguay is the sixth-largest exporter of beef in the world. With only 7 million inhabitants, the country has a herd of 14 million cows,” says the report, which links the expansion of cattle ranching to deforestation in Paraguay.

Monocultures such as soybeans also contribute to the transformation of the country’s forest mass, they argue.

The total area under soybean cultivation reached 3,701,631 hectares in 2021, according to the Institute of Agricultural Biotechnology (INBIO). Paraguay is the sixth-largest soybean producer in the world and the fourth-largest exporter.

The study points out that about 60 million kilos of agrochemicals are used to produce soybeans every year. It has led to the contamination of surface and groundwater and soil deterioration, which impacts the livelihoods of indigenous peoples and rural communities.

Although it does not appear in the current environmental documents, it appears in announcements made by the company; another input for Omega Green would be Pongamia, a tree originating in Asia.

It is an exotic species that could compromise the Chaco area’s biodiversity, where the tree’s cultivation has already begun, according to the organizations.

“It cannot be sustainable when it reproduces the current model of primary extraction, mainly of soybeans and cattle, in a context of the climate crisis,” said Omar Yampey, researcher of Heñói, one of the organizations responsible for the study on Omega Green.

For the company, the study by environmental organizations “has no basis in reality” and refers to erroneous data, ignoring the certification process of raw materials.

“It is a piece destined to spread theses contrary to the progress of Paraguay, its economy, and its society. And this is not useful for a serious debate on the issue of sustainable development,” spokespersons told Diálogo Chino.

Amid the disagreement, preparatory work for the construction of the facility began in November 2021, when CEO Battistella once again reaffirmed Omega Green as “of national interest” and “strengthening [Paraguay’s] image with international investment organizations.”

With information from Diálogo Chino