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Peru Biofuels Activities

Outline map of Peru.

Here you'll find information about Peru's work in biofuels. Learn more about its:

Background

Peru is interested in adding ethanol and biodiesel to its energy matrix, driven by the desire to create jobs, attract new investments, increase exports, and mitigate climate change. Some of the challenges for the biofuels industry in Peru include lack of strong policy and incentives for promoting the sector's development as well as substantial R&D investments.

Production

Currently, there is no fuel ethanol production in Peru. As of March 2008, there are two ethanol plants under construction, both in Sullana, Piura, each with 100 million liters/year capacity. Two more plants, also in the northern region, are planned with a total capacity of 200 million liters/year.

There is one operating biodiesel plant in Callao, Lima. The plant is operated by Pure Biofuels Corporation with a capacity of 127 million liters/year, and it is currently under expansion. Pure Biofuels acquired Interpacific Oil SAC's biodiesel production business in 2007, Peru's largest and longest-running biodiesel processor. Interpacific currently produces 27 million liters per year of biodiesel and has been producing commercial quantities since 2002. Two plants are under construction: Industrias del Espino (capacity 42.5 million liters/year) near Tocache, San Martín; and Herco (capacity 85 million liters/year) near Lurin, Lima.

Feedstock

The primary feedstock for ethanol production in Peru is sugarcane. Sugarcane production was about 7 million tonnes in 2006. Sugar mills in Peru are located along the coast and have a total milling capacity of 37,000 tonnes of cane per day. Because sugarcane in Peru is produced year-round, mills do not need to be very large. Yields and cane-age vary greatly from one producer to another. Yields range from 53 to 190 MT of cane per hectare and age from 13 to 18 months between cuts (USDA).

Main feedstock for biodiesel production is palm oil. According to the Peruvian minister of agriculture, Peru's current palm oil production is 48,000 tons per year. Production is concentrated in the provinces of Ucayali, San Martin, and Loreto. Peru still needs to import significant quantities — upward of 475,000 tons per year. Peru is also considering jatropha as feedstock with several plantation trails in different locations in San Martin (Tarapoto) and Amazonas (Bagua Chica) (GTZ).

Economics

The following charts show specific economic statistics for the member economy.

EthanolUS$/liter
From sugarcane0.25

Source: Palmas e Industrias del Espino, 2008

BiodieselUS$/liter
From palm oil0.24

Source: Palmas e Industrias del Espino, 2008

Biofuels in Use

Biofuels are not currently used in Peru. However, B2 (2% biodiesel with 98% petroleum diesel) will be offered at service stations beginning July 2009; and, in January 2010, E7.8 will be offered for use.

Infrastructure and Vehicles

There are no stations offering biodiesel or ethanol blends in Peru. However, 10 Toyota Hi Lux vehicles are running on vegetable oil as a test since January 2006 (GTZ).

Trade

Peru plans to produce ethanol and biodiesel for domestic consumption and export. According to the current U.S.-Peru Trade Agreement, Peru would be able to export ethanol tariff-free into the United States.

Policy

The Peruvian government plans to introduce a B2 mandate in January 2009 (extending it to B5 in 2011) and E7.8 mandate in 2010. To support the development of biofuels in Peru, the government adopted Law 28054 "Ley de Promoción del Mercado de los Biocombustibles" in 2003. The main objectives of the law is to diversify the fuel market, stimulate farming and agribusiness, promote sustainable development, and offer an alternative market in the fight against drugs.

References

  1. Palmas e Industrias del Espino
  2. Dirección General de Hidrocarburos, Ministerio de Energía y Minas
  3. Asociacion Peruana de Productores de Azucar y Biocombustibles
  4. U.S. Department of Agriculture, GAIN Report, 2006 (PDF 42 KB) Download Adobe Reader.
  5. Programa Desarrollo Rural Sostenible (PDRS) and RöttgerDeutsche Gesellschaft fDeutsche füür Technische Zusammenarbeit (GTZ)