Shell grapples with debt crisis at Brazilian biofuels business Raízen

February 27, 2026 - 06:16

The British energy multinational Shell is locked in critical negotiations to address a severe debt crisis at Raízen, its massive Brazilian biofuels joint venture. The situation has become so pressing that it has drawn the direct attention of Brazil's President Luiz Inácio Lula da Silva, who has personally intervened in discussions.

Raízen, a powerhouse in sugar, ethanol, and bioenergy production created from a partnership between Shell and Brazilian conglomerate Cosan, is struggling under a significant debt burden. The financial strain threatens one of Shell's largest and most strategic global investments in the transition to lower-carbon energy. The company has long touted Raízen as a cornerstone of its renewable fuels strategy.

High interest rates in Brazil and complex financial structures within the venture have exacerbated the problem. The crunch talks, now involving the highest levels of government, aim to restructure this debt and secure the future of the operation. The outcome is being closely watched by the global energy sector as a test case for the financial viability of large-scale biofuels projects. The stability of Raízen is crucial not only for its shareholders but also for Brazil's agricultural and energy sectors, where it is a major employer and producer. The resolution of this crisis will have significant implications for the pace of clean energy investment in the region.