Vale and Petrobras Enters into Agreement to supply Decarbonization-Focused Products

On October 18, 2024, Vale and Petrobras announced the signing of a Strategic Alliance Agreement aimed at enhancing competitiveness and advancing decarbonization efforts. This agreement builds on the protocol of intentions established by the two companies in September 2023 and sets the groundwork for testing and potentially marketing three key products: co-processed diesel with renewable content, natural gas, and a bunker fuel containing 24% renewable content. The selection of these products was based on joint studies conducted by both companies.

Vale's CEO, Gustavo Pimenta, expressed enthusiasm about the partnership, stating, “We are very happy to announce this broad partnership with Petrobras, which brings benefits to both companies and creates value for Brazil.” He emphasized that the agreement aligns with Vale's commitment to decarbonizing its operations and providing solutions to help reduce customer emissions, thus enhancing Brazil's position in the renewable fuels market.

Petrobras President Magda Chambriard echoed this sentiment, highlighting the company’s dedication to developing greener fuels and its ongoing commitment to decarbonization. She noted, “The partnership with Vale is yet another realization of Petrobras' goal of improving production capacity and the company's logistics structure to deliver to the market greener products such as Diesel R and reinforce our decarbonization strategy.”

One of the primary products included in the agreement is Diesel R5, a type of S10 diesel containing 5% hydrotreated vegetable oil (HVO). This fuel is produced by co-processing oil derivatives with plant-based raw materials, resulting in a product with the same technical specifications as conventional diesel but with a 60% reduction in carbon intensity for the renewable portion.

Additionally, the alliance focuses on developing more competitive models for supplying natural gas, which is crucial for producing pellets and iron ore briquettes—products developed by Vale that aid in decarbonizing the steel industry. Additionally, Petrobras will provide a very low-sulfur bunker fuel blend containing 24% biodiesel for testing on an iron ore transport vessel operated by Vale.

The first initiative under this agreement has already commenced, with Petrobras beginning to supply Diesel R5 to Vale in the second week of October. These supplies are intended for industrial-scale testing on the Vitória-Minas Railroad and at the Fábrica Nova mine in the Mariana Complex, located in Minas Gerais, Brazil. Petrobras is recognized as a pioneer in developing renewable content diesel, which is produced through co-processing in its refineries and can be utilized without any modifications to existing vehicles or storage systems, requiring only a mixture of biodiesel ester as specified by current regulations.