ITALIAN energy company Eni is making significant investments in farming ventures across Africa and Asia with the aim of producing about one-fifth of the agricultural feedstock required for its biofuel business by 2025, according to top executives at the company.
Eni is betting on the increasing demand for biofuels made from vegetable oil, waste cooking oil, and grease, which are expected to play a crucial role in decarbonising the trucking, aviation, and shipping sectors in the coming years.
Eni is not only expanding its bio-refining capacity but also diversifying into farming ventures to ensure a stable supply of feedstock and reduce the risks associated with commodity market volatility. Giuseppe Ricci, Chief Operating Officer of Eni Energy Evolution, stated in an interview with Reuters, ‘Our goal is to cover 20 percent of our biofuel production with feedstock coming from our agri-business by 2025, which is a relevant threshold since we have increased our output targets.’
In February, Eni announced plans to achieve a bio-refining capacity of more than 3 million tonnes per annum by 2025 and over 5 million tonnes by 2030, compared to the current capacity of 1.1 million tonnes. Analysts at Barclays predict global biofuel demand to triple to 30 million tonnes by the end of the decade.
Eni has entered into agreements with multiple countries to identify degraded lands suitable for cultivating crops that do not compete with the food supply chain. Guido Brusco, Eni Natural Resources Chief Operating Officer, explained, ‘We have pools of local farmers who cultivate for us… we get seeds, squeeze them, and take the oil to our bio-refineries.’ Additionally, Eni sources oil from agro-industrial waste and residues.
Eni plans to involve nearly 700,000 farmers in its farming activities by 2026 through agreements signed with Angola, Benin, Republic of Congo, Guinea Bissau, Kenya, Cote d’Ivoire, Mozambique, Rwanda, and Vietnam. Feasibility studies are also underway in Italy and Kazakhstan. This business model mirrors the vertical integration approach used in Eni’s hydrocarbon business, enabling the company to reduce volatility, secure raw materials, and gain better cost control.
BP is also considering adopting a similar vertical integration model, with plans to acquire stakes in biofuel feedstock producers and invest directly in farming ventures, according to Nigel Dunn, Head of Biofuels at BP.
Eni asserts that biofuels can reduce net greenhouse gas emissions by 65 percent to 90 percent compared to fossil fuels, depending on the type of raw material and production process. Ricci added, ‘By the end of this year, we will make the final investment decision on a new bio-refinery in Livorno, Italy.’ This refinery would join Eni’s existing Italian bio-refineries, along with potential new plants in the United States and Malaysia.
Despite higher costs, the ability to produce biofuels using existing infrastructure positions them as a competitive solution for decarbonising the transportation sector, according to Ricci. Eni’s strategic investments in farming ventures aim to secure a sustainable and controlled supply of biofuel feedstock to meet the growing demand while reducing the environmental impact.