Corteva and bp Launch Biofuel Feedstock Joint Venture Etlas™

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BullishLong TermCorporate DevelopmentsCTVA XOM CVX

High Materiality8/10

Information

Partnership will leverage Corteva technology and bp integrated downstream capabilities to produce an...

AI Summary

Corteva and BP have launched Etlas, a joint venture focused on producing biofuel feedstocks from crops. This new collaboration targets producing one million metric tonnes of feedstock annually by the mid-2030s, tapping into the rapidly growing demand for sustainable fuels in the aviation and renewable diesel markets.

Trading Thesis

Investing in BP may yield strong returns as biofuel market demand rises.

Market-Moving

Etlas could enhance BP’s growth in the biofuels sector.
Joint venture positions BP strategically in a growing market.
Significant projected increase in SAF and RD demand boosts sentiment.
Focus on sustainable farming provides resilience against market fluctuations.
Corteva's agricultural innovations will further strengthen BP's offerings.

Key Facts

Etlas is a 50:50 joint venture between Corteva and BP.
Projected feedstock production reaches one million metric tonnes by the mid-2030s.
Global demand for SAF expected to rise to 10 million tonnes by 2030.
Renewable diesel demand could increase to 35 million tonnes by 2030.
Initial supply of Etlas is scheduled for 2027.

Companies Mentioned

Corteva (CTVA): Corteva's partnership enhances BP's agricultural technology access.

Corporate Developments

The partnership between BP and Corteva represents a significant step in the energy transition. By integrating agricultural innovation with biofuels production, BP is aligning itself with emerging sustainable energy trends that are increasingly important to investors and regulators alike.

FAQ

Why Bullish?

The formation of Etlas aligns with growing market demand for sustainable fuels, positively impacting BP's market position and investor sentiment, reminiscent of BP's earlier ventures into renewable energy, which generally boosted stock performance during periods of high demand.

How important is it?

The announcement of the Etlas joint venture highlights BP's commitment to transitioning towards sustainable energy and strengthens its competitive stance in an evolving market, indicating significant relevance to both investor strategy and operational growth.

Why Long Term?

While immediate impacts may be limited, the strategic positioning in the biofuels market indicates long-term growth potential as global fuel demand evolves and sustainability becomes a prevailing priority over the coming years.

Related Companies

CTVA XOM CVX

Corteva and BP Launch Etlas™ Biofuel Feedstock Joint Venture

Corteva Inc. (NYSE: CTVA) and BP (NYSE: BP, LSE: BP.L) have announced the formation of a new joint venture, Etlas, aimed at producing biofuel feedstocks from crops such as canola, mustard, and sunflower. This 50:50 partnership is set to leverage Corteva's advanced seed technology alongside BP's downstream refining capabilities to address the growing global demand for sustainable biofuels.

Production Goals and Timeline

Etlas aims to produce one million metric tonnes of biofuel feedstock annually by the mid-2030s, potentially generating over 800,000 tonnes of sustainable fuels. The initial supply of these feedstocks is expected to begin in 2027, designed for use in co-processing at traditional refineries and dedicated biofuel production facilities.

Target production: 1 million metric tonnes of feedstock/year by mid-2030s
Expected biofuel output: 800,000 tonnes annually
Supply commencement: 2027

Meeting Growing Demand for Sustainable Fuels

Industry estimates indicate a dramatic increase in demand for biofuels, with sustainable aviation fuel (SAF) projected to rise from 1 million tonnes in 2024 to as much as 10 million tonnes by 2030. Similarly, renewable diesel (RD) demand is expected to grow from 17 million tonnes to 35 million tonnes in the same timeframe. Etlas is strategically positioned to meet this expected surge in demand.

Sustainable Agricultural Practices

Etlas will draw on existing farmland during off-seasons for primary crops, enhancing soil health and providing farmers with additional revenue streams without increasing land use pressure. Judd O’Connor, Executive Vice President of Corteva's seed business, stressed the dual mission of Corteva: to support global fuel needs and enhance farmer livelihoods.

Leadership and Future Outlook

Ignacio Conti, Global Business Development Director at Corteva, will serve as the Chief Executive Officer of Etlas. Gaurav Sonar, Vice President of Novel Feedstocks at BP, has been named Chair of the Board of Directors. Both leaders emphasize the critical role of agriculture in producing reliable and sustainable sources of SAF and RD, which align with growing consumer expectations for green energy solutions.

Philipp Schoelzel, Senior Vice President of biofuels growth at BP, highlighted that this joint venture adds flexibility to BP's biofuels value chain, reinforcing the company’s commitment to deliver innovative energy solutions.

About Corteva and BP

Corteva, Inc. (NYSE: CTVA) is recognized as a global leader in agriculture, emphasizing innovation and customer engagement to address pressing agricultural challenges. More information on Corteva can be found at www.corteva.com.

BP (NYSE: BP) focuses on providing innovative energy products while maintaining its commitment to sustainability. Additional insights into BP's operations are available at www.bp.com.

Cautionary Statements

This press release contains forward-looking statements as defined under U.S. securities laws. The statements include predictions and expectations regarding future operations, market dynamics, and product demands, which may vary materially due to various risks and uncertainties. A detailed examination of these risks can be found in Corteva's Annual Report and related financial filings.