We wish to be a leader in terms of biofuels in our markets.
Our ambition is to be able to contribute to a reduction of carbon dioxide emissions, not just in our own business but also by offering our customers fuel that results in lower emissions on combustion. We wish to be a leader in terms of biofuels in our markets.
We strengthened our position in the market in 2007. Biofuel is now available at more than 1,300 service stations in seven different countries. Our total sales of biofuel in 2007 resulted in a reduction of 167,000 tonnes of carbon dioxide emissions, a significant increase on 2006.
We aim to build a sustainable international upstream biofuel business which goes beyond sourcing our own downstream needs. Biofuels will clearly provide significant business growth opportunities for the company, and they may also represent value-adding industrial opportunities in our core exploration and production growth areas, such as Brazil and Angola. Biofuels should also be considered as a means of replacing oil and gas reserves in the longer term.
In August 2007, StatoilHydro acquired a 42.5 per cent holding in the Lithuanian bio-diesel plant Mestilla. This is the company's first investment in biofuel production. The Mestilla plant made its first deliveries in November 2007 and it has an annual capacity of 100,000 tonnes of bio-diesel.
The bio-diesel is based on rapeseed. StatoilHydro is responsible for marketing, sales and distribution. The plant will deliver bio-diesel to our markets.
In September 2007, StatoilHydro entered into a long-term strategic agreement with the Brazilian oil company Petrobras. The agreement provides new opportunities for developing the international value chain for biofuel, both in production and trading. We will look into the possibility of collaborating with Petrobras in three main areas:
- Brazilian ethanol production based on sugar plantations
- Developing technology for the next generation of biofuels
- Establishing standards for sustainable production
The environmental and social challenges relating to biofuel vary greatly depending on the biomass that is used and how the biomass is cultivated and processed. We are aware of the various possible environmental and social challenges relating to biofuels.
StatoilHydro's ethical standards concerning society and the environment and the UN Global Compact are fundamental to how we address these challenges, in relation to both the choice of biomass and the processing of the product.
Preliminary sustainability criteria have been defined for biofuel trading. We have started a comprehensive review of the challenges and are developing standards and management tools to ensure sustainability in all parts of the lifecycle of the product.
