BP p.l.c. (NYSE:BP) shares are trading lower premarket on Wednesday. The company disclosed a 50:50 joint venture with Corteva, Inc. (NYSE:CTVA) to produce crop-based oils from canola, mustard, and sunflower for sustainable aviation fuel (SAF) and renewable diesel (RD).
The venture combines Corteva’s seed technology expertise with bp’s refining and fuel marketing capabilities to serve the commercial transportation market.
Etlas plans to produce 1 million metric tonnes of crop-based feedstock annually by the mid-2030s, yielding over 800,000 tonnes of biofuel.
The initial supply is set for 2027, supporting both co-processing at refineries and dedicated biofuel plants.
The global demand for SAF expected to rise from ~1 million tonnes in 2024 to 10 million tonnes by 2030, and renewable diesel projected to grow from ~17 million tonnes to 35 million tonnes.
The feedstock will come from crops grown on existing farmland between main food crops, improving soil health and providing farmers with new revenue without increasing land use.
Management Commentary
Judd O’Connor, executive vice president of Corteva’s seed business unit said, “By helping found Etlas, Corteva continues to deliver on two critical parts of our mission: to help fuel the world and to support farmers. Agriculture is part of the solution, and we are excited to see Etlas come to life.”
Philipp Schoelzel, senior vice president, biofuels growth, bp added, “This capital light joint venture creates optionality in our biofuels value chain, strengthening our position and helping deliver attractive returns.”
Castrol Sale
Last month, BP streamlined its portfolio by selling a 65% stake in Castrol lubricants business for about $10.1 billion.
The transaction is expected to generate approximately $6 billion in net proceeds for BP.
BP Price Action: Bp shares were down 1.19% at $33.95 during premarket trading on Wednesday, according to Benzinga Pro data.
Photo by Tada Images via Shutterstock
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