Paraguay Wants to Build South America’s Largest Biofuels Plant

by Karina Godoy (Diálogo Chino) US$1 billion Omega Green plant is expected to be completed in 2025. Communities and environmental organisations have raised concerns -- In Paraguay, the announcement of a biofuels plant set to be the largest in South America has divided the country. While the company behind it and the government are keen to highlight the potential economic impacts of the project, and claim the soy used to fuel it will not be linked to deforestation, environmental organisations have questioned the commitments.

The Omega Green plant aims to produce renewable diesel (also known as hydrotreated vegetable oil, or HVO) and renewable aviation fuel, as well as processing by-products, including propane, butane, naphtha and acid gases. It is expected to start operating in 2025 and will be located near the city of Villeta, 45 kilometres south of the capital, Asunción.

In the case of Omega Green, the output will be produced from animal fats, used cooking oils and soybeans.

The project in Paraguay is being promoted by the Brazilian renewable energy company BSBIOS, part of the ECB Group. The company was founded in 2011 by Brazilian businessman Erasmo Carlos Battistella, dubbed “the king of biodiesel”. Some of the company’s businesses have been denounced for undermining the interests of the Brazilian people.

The plant will be located in an industrial complex of 384 hectares, according to the environmental impact assessment study, to which Dialogo Chino had access to. The land was acquired by the company from former president Luis Ángel González Macchi (1999-2003), according to Teodosio Gómez, mayor of Villeta.

Industrialisation in the Villeta area has brought parallel processes of dispossession of land and a loss of community, according to a study carried out collaboratively by the organisations Stay Grounded, Biofuelwatch, Heñói and Global Forest Coalition. Their analysis assesses the plant project and addresses the impacts it has had, and could have, on residents of Villeta’s Santa Rosa community.

Local residents, who preferred not to be identified, told Diálogo Chino that they were not necessarily against the construction of another industrial project like Omega Green, as long as it does not cause environmental damage to the area.

The mayor of Villeta acknowledged that many families in Santa Rosa have opted to sell their land and leave the area in the face of industrial expansion and limited movement. However, he was in favour of the project because of its economic benefits. According to the company, the plant will contribute over US$8 billion to Paraguay’s GDP over 10 years.

The project envisages a total production volume of 20,000 barrels per day of renewable diesel, renewable jet fuel and by-products, according to the environmental impact assessment. BSBIOS/ECB Group told Diálogo Chino that it will only use certified feedstock, as this is a requirement of its biofuel buyers.

The plant will feature an electrolysis unit to generate hydrogen using water and electricity from clean, renewable sources; this hydrogen is then used to treat the biomass raw materials in the fuel production process. The adjacent Paraguay River will be the main source of water, which will be supplied to the plant via dedicated pipes.

“The animal fats would come from the by-products of the slaughter of beef for export. Paraguay is the sixth largest exporter of beef in the world. With just 7 million inhabitants, the country has a cattle herd of 14 million cows,” says the report, which links the expansion of cattle farming to deforestation in Paraguay.

Monocultures such as soy also contribute to the transformation of the country’s forest cover, the report argues.

Although it does not appear in current environmental assessment, but does appear in announcements made by the company, another input for Omega Green would be pongamia, or Millettia pinnata, a quick-growing tree native to Asia. It is an exotic species that could compromise the biodiversity of the Chaco region, where cultivation of the tree has already begun, the organisations warn.

In response to the study by environmental organisations, the company has described it as having “no basis in reality”, referring to erroneous data and ignoring the certification process of raw materials. READ MORE