KUOSOL is a pioneering project to develop bioenergy and biodiesel from Jatropha

05/11/2010 Pangea

Repsol and the Kuo Group create a company to produce Second Generation Biofuels

- Repsol and the Mexican Group KUO will each own a 50% stake in KUOSOL, headquartered in Mexico and with an initial estimated investment of $80 million.
- The new company will develop and market highly sustainable non-edible vegetable oil to be used for the production of second generation biofuels.
- The oil is from the jatropha curcas bush which additionally generates a considerable amount of biomass that can be used for steam and electric power cogeneration.
- The jatropha plant will be cultivated on barren land in the Yucatan state of Mexico.
- This project meets the environmental and social sustainability criteria as defined by the Renewable Energy Directive of the European Parliament, required for all biofuel projects of both companies.
- The KUO Group is one of Mexico’s largest conglomerates, with businesses interests in the aerospace, automotive, chemicals, foods and agriculture industries, amongst others.
- Repsol and the KUO Group are partners in Dynasol, a world- leader in asphalt modifiers.
- This project complements and strengthens the development of Repsol’s New Energy Business Unit, which aims to identify and develop business projects related to bioenergy and renewable energy for transport which may generate synergies with the company’s existing activities.

Repsol Chairman, Antonio Brufau, and the Chairman of the KUO Group, Fernando Senderos Mestre, today signed in Madrid the agreement that creates a joint company called Kuosol dedicated to the development of bioenergy from the cultivation of the jatropha curcas, an oilseed with a high content of non-edible oil.

Both Repsol and the KUO Group will have a 50% stake in Kuosol; its headquarters will be in Mexico and the total investment is estimated at $80 million. Its activities range from farming to industrial installations and its main objective is the use of integrated biomass plantations of jatropha curcas oil to generate biofuels and bioenergy, in a sustainable manner.

Repsol boasts a long history and extensive experience in researching, developing and marketing biofuels worldwide. In April 2010, Repsol created its New Energy unit to identify and develop businesses related to bioenergy, renewable energy for transport and other areas which present synergies with the company’s existing activities.

This project meets the environmental and social sustainability criteria as defined by the Renewable Energy Directive of the European Parliament and required by Repsol and KUO Group for all biofuels projects. Specifically, this project achieved a reduction of greenhouse gases in excess of 50%, required by the Directive from 2017, which will be developed on land in accordance with the criteria defined by this standard.
In 2008, the KUO Group began a pilot project in the Yucatan state of Mexico, to produce bioenergy from non-edible second generation crops on land not suitable for agriculture. The first phase was developed with more than 300 hectares of jatropha curcos oilseeds to obtain an oil to produce biodiesel.

The project allows the KUO Group to harness vacant lots used for the pork-rearing business, to reuse recycled water on its farms, rich in nutrients for irrigation, and provides easy access to carbon credits under the Clean Development Mechanism (CDM) scheme. Additionally, it significantly contributes to the environment, one example being the use of biomass energy resulting from the extraction of oil, as well as contributing to the reduction of greenhouse gases.

“Biofuels will be a key part of the company’s future growth. The creation of Kuosol is an important step in the development of Repsol New Energy strategy,” said Repsol chairman Antonio Brufau.

Fernando Senderos Mestre, Chairman of the KUO Group said that "creating KUOSOL is an important step in our entrance into the Biofuel industry, which is being carried out under the highest sustainability standards to develop second generation biofuels. This new partnership with Repsol will undoubtedly help to create value in our business portfolio.”

The objectives for this period are:

- Yo plant and cultivate 10,000 hectares of jatropha in Yucatan, Mexico, principally on third party lands in this area, which will represent a positive impact on rural communities.
- To harvest 44 million litres of crude oil for biofuels.
- Integrated use of biomass from forest plantations, cogeneration of steam and electricity for self-supply, with surplus production sold.
- Generate more than 400 direct jobs and 2,000 temporary jobs.

It is estimated that agricultural development will be completed in the next 3 years, allowing industrial production to start in 2013.

About Repsol
Repsol is an integrated international oil and gas company, operating in more than 30 countries. With more than 36,000 employees, it is one of the ten major private oil companies in the world and the largest private energy company in Latin America in term of assets.

The company is leader in refining and marketing in Spain and Argentina, has the third largest private LPG distribution in the world and is one of the world’s leading companies in marketing liquefied natural gas (LNG). Significant exploratory successes achieved in recent years in various geographical areas with the greatest potential in the world, have made Repsol a company with some of the best growth prospects within the industry.
Repsol is a people-oriented company dedicated to creating value and committed to technical innovation, basing its business practices on sustainability, social development and a commitment to the environment.

About the KUO Group
The KUO Group is one of Mexico’s largest industrial conglomerates, with annual sales of $1.5 billion, exports to over 70 countries on all continents and more than 13,000 employees. Its current business portfolio includes: "Aerospace", "Aftermarket", Chipboard, Dynasol (synthetic rubber), Elastomer, Herdez Del Fuerte (brand of processed foods), Macro-M, Plastics, Pork and Power Systems.