Acelen secures backing for Bahia biofuels push

Brazilian refiner Acelen has secured $1.5 billion to begin construction of a major biofuels refinery in Bahia, advancing Abu Dhabi’s Mubadala-backed strategy to build a large-scale renewable fuels platform in Latin America.

The project, led by Acelen Renováveis, is expected to start operations in 2029 and produce up to 1 billion litres a year of sustainable aviation fuel and renewable diesel. The financing package brings together 10 financial institutions, with HSBC and the World Bank’s International Finance Corporation playing leading roles, alongside development lenders and commercial banks seeking exposure to transport decarbonisation infrastructure.

The refinery will be built in the northeastern state of Bahia, near Acelen’s existing Mataripe refining complex, a former Petrobras asset acquired by Mubadala Capital. The location gives the project access to established industrial infrastructure, storage systems, port links and logistics networks, reducing some of the execution risks usually associated with greenfield energy projects.

Acelen’s plan centres on hydrotreated esters and fatty acids technology, commonly known as HEFA, which converts vegetable oils, used cooking oil, animal fats and other eligible feedstocks into drop-in fuels that can be blended with conventional jet fuel and diesel. The company has also promoted macaúba, a native Brazilian oilseed crop, as a key part of its long-term feedstock strategy. The crop can grow on degraded pastureland and is being positioned as a way to support rural income while avoiding pressure on food crops and forested areas.

The financing marks a significant step for Mubadala’s Brazil portfolio. Since entering the country more than a decade ago, the Abu Dhabi investor has built exposure across energy, infrastructure, consumer businesses and financial assets. Acelen has become one of its most visible operating platforms after taking control of the Mataripe refinery, which has capacity to process more than 300,000 barrels of oil a day and plays a substantial role in fuel supply across Brazil’s northeast.

The Bahia biofuels development also arrives as airlines, fuel suppliers and governments face mounting pressure to close a supply gap in sustainable aviation fuel. Global SAF output remains a small fraction of total jet fuel consumption, while mandates in Europe and other markets are beginning to lift guaranteed demand. Fuel suppliers serving European airports must already meet minimum blending requirements, with the share set to rise over the next decade.

For producers, the challenge is to build plants large enough to lower unit costs while securing feedstocks that meet strict lifecycle emissions and land-use standards. For airlines, the concern is price. SAF remains far more expensive than conventional jet fuel, and carriers have warned that limited supply could raise compliance costs without delivering the scale needed for aviation’s net-zero targets.

Acelen’s project is therefore likely to be watched closely by both fuel buyers and policymakers. Its planned annual output of 1 billion litres would make it one of the largest renewable fuels facilities in Latin America. The project is also being structured as an export-oriented platform, with Europe and North America among the likely target markets because of stronger regulatory incentives and higher willingness to pay for certified low-carbon fuels.

Brazil’s advantages are clear. The country has deep agricultural capacity, an established biofuels industry, extensive refining knowledge and access to Atlantic export routes. Ethanol and biodiesel have long formed part of Brazil’s fuel mix, giving investors a policy and industrial base that few emerging markets can match. The Bahia project seeks to move that capability into higher-value aviation and renewable diesel markets.

Risks remain. Large SAF plants depend on stable regulation, predictable certification rules, reliable feedstock supply and long-term offtake contracts. Environmental scrutiny will focus on whether feedstock expansion can avoid indirect land-use change, protect biodiversity and deliver verifiable emissions reductions. Financing costs, construction inflation and technology integration could also affect the project’s economics before start-up in 2029.