by Francesca Landini (Reuters) Eni aims to develop farming ventures in at least 9 countries; Eni replicates upstream-downstream model with agri-business; Eni to decide over new bio-refinery in Livorno by year-end — Italy’s Eni (ENI.MI) is investing in farming in several African and Asian countries as it aims to produce by itself around one fifth of the agricultural feedstock it will need for its biofuel business by 2025, two top executives at the energy group said.
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To satisfy this expected demand, Eni is ramping up its bio-refining capacity and, at the same time, is expanding farming ventures to secure supplies and reduce the risk of excessive volatility in the commodity market.
“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 an interview.
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Eni has signed deals with several countries to identify degraded land where farmers cultivate crops that do not compete with the food supply chain.
“We have pools of local farmers who cultivate for us … we get seeds, squeeze them and take the oil to our bio-refineries,” said Guido Brusco, Eni Natural Resources chief operating officer. The oil also derives from agro-industrial waste and residues.
Around 700,000 farmers are expected to be involved in Eni’s farming activities by 2026, under deals signed with Angola, Benin, Republic of Congo, Guinea Bissau, Kenya, Ivory Coast, Mozambique, Rwanda and Vietnam. Feasibility studies are under way in Italy and Kazakhstan.
The business model is similar to the one Eni applies in its hydrocarbon business.
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Also following the vertical integration model, BP (BP.L) is considering buying stakes in biofuel feedstock producers and investing directly in farming ventures, BP head of biofuels Nigel Dunn told Reuters.
Eni says biofuels can cut net greenhouse gas emissions by between 65% to 90% compared with fossil fuels, depending on the type of raw material and the production process.
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Even if biofuels have higher costs, the fact that they can be produced with existing infrastructure make them a competitive solution to decarbonise transport, Ricci said. READ MORE