Copersucar and Eco-Energy Combine to Create World’s Top Ethanol Trader

on Nov 6, 2012

**New Market Leader on the Biofuel Stage**

Brazil’s largest sugar and ethanol trader Copersucar and US biofuels company Eco-Energy announced on Monday the integration of their ethanol operations, creating the world’s largest ethanol trader and deepening the relations between the two leading ethanol-producing countries, The Financial Times reported on 6 November 2012.
Copersucar, which represents 48 sugar mills across Brazil, announced that it has purchased a controlling interest in Eco-Energy. The Brazilian company did not reveal the price of the deal, but said it would take two of the three seats on the board. The merger, which is expected to close within 45 days after receiving US regulatory approval, will create the largest and most sophisticated biofuels platform in the world. Together, Copersucar and Eco-Energy will reach global supply capacity of 2.6 billion gallons of biofuel per year, becoming the world’s top ethanol trader with a 12 per cent share of the global biofuel market.

**Merger Marks Emerging Partnership Between the US and Brazil**
The joint venture between Copersucar and Eco-Energy deepens an emerging partnership between the world’s two top ethanol producers: the United States, which makes corn ethanol, and Brazil – the second-largest producer, but a pioneer in the more efficient and environmentally friendly production of biofuels from sugar cane.

!m[Deal Marks Deepening Relationship between the Two Leading Ethanol Producing Nations — the US and Brazil](/uploads/story/730/thumbs/pic1_inline.png)A decades-old government subsidy for US ethanol producers and a 54-cent-a-gallon tariff on biofuel imports have long caused resentment among Brazilian producers, straining diplomatic relations between the two countries amid accusations of protectionism. At the end of last year, however, Washington ended the tariff and subsidies as pressure from environmental groups and food price inflation concerns have risen. This move eased tension in the ethanol industry and paved the way for more cross-border co-operation, such as the merger of Copersucar and Eco-Energy.

**Win-Win Agreement**
In an official statement, Copersucar’s chairman Luís Roberto Pogetti, said the deal would allow the group to become a “truly global company in the biofuel market”. He added that the merger would double Eco-Energy’s operations in the US over the next three years and help Copersucar increase its exports to the burgeoning European market. The company’s representative also said that the diversification into corn-based ethanol would leave Copersucar less exposed to sharp reductions in Brazilian sugar production as a result of poor weather in the country’s key centre-south region.

In a sign that the deal has been made on a win-win principle, Eco-Energy’s chief executive Chad Martin added that the partnership will contribute to Renewable Fuels Standard (RFS) requirements in the US. He said: “The biofuels industry continues to evolve and expand beyond the borders of North America, and we need to constantly be working to open new markets, while also being in a position to meet the current biofuel requirements domestically under the RFS. This partnership builds on the great platform and team we have created at Eco-Energy and opens up significant opportunity for our producer partners.”