A HUB OF SKILLS IN THE BIODIESEL PRODUCTION CHAIN IN BRAZIL WWW.REDEJATROPHANET.NING.COM BIOBALEMINAS@GMAIL.COM
goal To set up a pool of highly professional organizations in the private and public sector toorganize the bio-diesel production chain , making available to the market turn-key projects (from soil to oil) promoting sustained development and povertyalleviation, creating opportunities and a new model for the intensive and extensive use of the energy biomass potential of Brazil.
vision “Take joint actions and improve efforts to work together at all levels to improve access to reliable and affordable energy services for sustainable development sufficient to facilitate the achievement of the MDGs, including the Goal of halving the proportion of people in poverty by2015, and as a means to generate other important services that mitigate poverty, bearing in mind that access to energy facilitates the eradication of poverty” ( Summit on Sustainable Development in the Johannesburg Plan of Implementation )
our challange In modern economies, large scale poverty imposes an enormous economic loss, wasting the talents and energies of hundreds of millions of people , diverted from socially productive activities that could create wealth for society to the struggle for mere survival.The partnershipsshould be at theglobal level, at thecountry level withnationalstakeholders andexternal partnersacting together,the private sectorand civil-society But the fundamental partnership, andinstitutionscollaborating to ultimately the only one that counts, is with thecreate conditions poor themselves. They have the talents, thethat emancipate skills and the knowledge of their ownpoor groups. environment.
Innovation of BioVale Hub for industries Cold mechanical expelling OIL EXPELL Phosphorous low content by-products with high nutricional content Ethanol technologyTRANSESTERIFICATION Low operational cost Meeting International requirements Plenty local feed-stockANIDRUS ALCOHOL High calorific power DESTILLATION Low production cost re-usage of water and contaminated BIOLOGICAL glycerin TREATMENT Cogeneration of electric and thermal energy Production of biological fertilizer
Linking the various stakeholdersThe main objective of the Hub is to bring capabilities of the variousstakeholders involved in the bio-diesel production chain, both in Brazil andabroad providing resources and diffusing knowledge to the linked firms.The benefits provided through such linkages are of great significance becauseof the complimentary capabilities among the stakeholders. Linkages with foreign organizations can be a great driver of dynamism andcompetitiveness to develop effectively and rapidly the Brazilian bio-dieselprogram. The foreign firms benefit from linkages are reduced costs, localmarket and product intelligence and enhanced assets (UNCTAD 2001).MINASINVEST´s interventions, as a leading IPA (Investment promotion agency)are important to the extent that investors believe that an enterprising IPA canassist them in identifying and introducing reliable local firms andorganizations with whom the investors can partner.The linkage envisages upgrading domestic enterprises; facilitating thetransfer of technology, knowledge and skills; improving business andmanagement practices; and facilitating access to finance and markets.
Market scenario and prospects the price of crude oil tripled between early 2002 and mid- 2005 while natural gas reaches a level six times greater than ten years earlier. Source: GTZ/WorldWatch Institute
The growing gap energy companies have not invested in building enough refinery capacity to meet the growing level of companies have world demand. World oil production has gone up by 40% not been able to in the past 20 years while refinery capacity has only find enough new gone up 15%. oil and gas fields to replace the exhausting ones. Oil is being pumped out of the ground three times faster than it is being replaced by new oil finds.the oil reserves discovered between 1950 and 1980 are being run down. Source: GTZ/WorldWatch Institute
Will oil prices rise further?"There are not enough large-scale projects in the developmentpipeline right now to offset declining production in mature oil fieldsand to meet global demand growth beyond 2007". (Chris Skrebowski,the editor of the Petroleum Review ) The total amount of energy that the world gets from oil and gas will begin to decline after 2010. Source: GTZ/WorldWatch Institute
What alternative sources to fill the gap? The global demand for oil is increasing by just over 2%every year at present. This increase in demand added to the gap being createdby the declining supply, implies new energy sources eachyear equivalent to 4-5 per cent of the worlds current oilproduction: around 1,800 million barrels of oil a year. In 2015, when world gas output ceases to increase tomeet the its growing demand , the new energy sourceswould have to increase the annual rate at which they grew by another 900 million barrels. Source: GTZ/WorldWatch Institute
What alternative sources to fill the gap? The only truly sustainable energy sources are those basedon the flow of energy from the sun: solar, hydro, wind,wave, biomass. These flows are very large in comparison with humankindsuse of energy. Renewable sources can therefore meet all the worldsenergy needs, both now and in the future. The amount of energy supplied by renewable sourcescould be 120 times its present level . The problem is to develop these sources quickly enough to fill the gap as it opens up. Source: GTZ/WorldWatch Institute
Biofuels: a Booming IndustryThe world is on the verge ofunprecedented growth in theproduction and use of biofuels , byvirtue of: Rising oil prices, national securityconcerns, the desire to increase farmincomes, and a host of new andimproved technologies . The two most prevalent biofuels areethanol and biodiesel.World production of ethanol morethan doubled between 2000 and 2005,while production of biodieselquadrupled.
New Technologies, New Gains Biofuel production has become substantially more efficient over the last 25 years as Brazil and the United States have scaled up their industries. Such incremental gains are likely to continue for years to come.However, the greatest potential for biofuels lies in thedevelopment of new technologies that will significantlyexpand the range of biomass feedstock, increaseconversion efficiencies, and lower production costs.
Biofuels: A New Future for Rural CommunitiesOne of the main benefits of biofuels is their potential to increasefarm incomes and strengthen rural economies. The World Bankreports that biofuel industries require about 100 times more workersper unit of energy produced than the fossil fuel industry.In 2004, the Brazilian sugarcane sector was responsible for 1 millionjobs (direct)/4 million (indirect) corresponding to the production of350 million tonnes of cane (UNICA, 2003 and Goldemberg, 2003).The dispersed nature of agriculture makes it unlikely that biofuelproduction will become as centralized as the oil industry.In the focused region of the project (Jequitinhonha & Mucuri Valleys)the access to modern forms of energy is limited or absent. Anorchastrated pool of competences involved in the biodieselproduction chain can help provide income and clean, accessibleenergy that is vital for rural development and poverty alleviation.
Further benefits In general, biofuels have a solidly positive GHG balance. Energy cropshave the potential to reduce GHG emissions by more than 100 percent(relative to petroleum fuels) because such crops can also sequester carbonin the soil as they grow. Large deforested areas could be recovered by crops producingvegetable oils in order to produce biofuels. Even with subsidies, the economic savings with biofuels from avoided oilimports are considerable: between 1975 and 1987, ethanol saved Brazil$10.4 billion in foreign exchange while costing the government $9 billionin subsidies. This investment paid off even more in subsequent years:studies show that from 1976–2004, Brazil’s ethanol production substitutedfor oil imports worth $60.7 billion—or as much as $121.3 billion includingthe avoided interest that would have been paid on foreign.
RET OPPORTUNITIES Renewable energy will have to supply a greater share of the worldsenergy requirements. It is estimated that the market for clean energy technologies couldbe worth $1.9 trillion by 2020. The financial sector has a key role toplay in developing and promoting this market. In the next 25 years, the world will consume all that has beenproduced in fossil oils so far. The world´s dramatic increment for fuels should be supplied by bio-fuels. In the future, In the short run, ETHANOL and BIO-DIESEL are themain bio-fuels. Renewable energy is both a solution and a business opportunity; BUSINESS AS AN AGENT OF WORLD BENEFIT
Biodiesel - a Mutual Profitable Partnership As oil prices and environmental concerns have risen in the past few years, investment in new biofuel facilities has mushroomed in Brazil. The Brazilian National Program for use and production was incorporated in the Brazilian energy matrix by Law nr 11.097/2005 . Large trans-national corporations, as ADM, have already started investing in biodiesel projects in Brazil The crop area required to produce the blend of initial mandatory 2% of biodiesel will be 1.5 million hectares, equivalent to only 1% of the total acreage under crops or available for agriculture throughout Brazil (150 million hectares).BIOVALE ENERGY: YOUR PARTNER IN BRAZIL – FROM INCEPTION TO CONCEPTION
Brazilian ethanol´s use and production PRODUCTION CAPACITY: 18 billion liters/yearPRODUCTION: 15 billion liters/year (seed/2004/2005)EXPORTATION: 2.4 billion liters in 2004SUGAR CANE PLANTED AREA: 5.6 million hectaresPOTENTIAL FOR AGRICULTURAL EXPANSION IN BRAZIL: 90 million hectares of arable lands – Without any forest removalINTEGRATED PRODUCTION OF SUGAR AND ETHANOL: Provide production flexibilityUTILIZATION OF ETHANOL IN VEHICLES IN BRAZIL: Automobiles, light commercials, motor-cycles and aircrafts Flexible Fuel light vehicles: reached 37% of internal market sales in 2005
Brazil: a global benchmark in RETBrazil has ideal conditions for becoming a major world producer ofbiodiesel. It has a vast amount of arable land, part of which is notsuitable for food crops but has the right soil and climate forgrowing a range of oilseeds.Biodiesel will make Brazil a global benchmark in the use ofrenewable fuels.It first won this position in the 1970s with theintroduction of ethanol made from sugarcane to power automotivevehicles.The National Alcohol Program, Proálcool, was the largest fossilfuel substitution program in the world automotive market. It isstill considered a global example of excellence, and Brazil remainsthe largest producer and consumer of fuel alcohol in the world.The experience Brazil has accumulated through the Proálcoolserves as a strong foundation for implementing the biodieselprogram and maximizing the nation’s competitiveness in arelatively short period.
Brazilian domestic market projection Law 11 097/2005: it sets forth a mandatory use of biodiesel mixture to diesel, which reflects in the following prospects 2020 2020 20% 12,4 12,4 billions billions liters/year liters/yearSource: MME
Brazil’s export potentialWith the launch of commercial production, Brazilbecomes a potential exporter of biodiesel.The EU aims to ensure that 2% of all the fuel consumedin the region is renewable by 2005, but it has limitedacreage available for growing rapeseed, the mainfeedstock produced in Europe, and industrial capacity isinsufficient to meet the stipulated demand.Despite these constraints, the proportion of renewablefuels is set to reach 5.75% by 2010 according to EUDirective 30, ratified by the European Parliament in May2003.Given the limitations for production growth in Europe,Brazilian biodiesel enjoys an unprecedented opportunityto build market share in the continent Europe.
Features of envisaged agricultural area: Total semi-arid area: 1.219.021,50 Km2, equivalent to about 1/5 of Brazil – comprising ten States Maranhão, Piauí, Ceará, Rio Grande do Norte, Paraíba, Pernambuco, Alagoas, Sergipe e Bahia and Minas Gerais. Population: 1/3 of Brazil (55 million)
Possible partners Countries : Companies : Bearing high agricultural Having to meet social andproduction costs environment responsibilities Bearing internal/external Bearing environment liabilitiesobligations of emission reduction(Kyoto Protocol and other Willing to attract SRIcompromises) and valuing their stock prices Bearing scarcity of cultivation Bearing intensive need of fuellands sources Willing strategic alternatives Investors in prospective highfor diesel supply return SRI BIOFUELS: FUTURE´S MOST PROSPECTIVE INVESTMENT
Prospects of biodiesel cooperation/partnershipPossible areas of interest: Utilization of Partners technology for biodiesel plants in building, logistics, utilization of glycerin and other by- products, specification, engine tests, etc. Sale of carbon credits (MDL) obtained through the utilization of biodiesel in Brazil. Export of vegetal oil and biodiesel to Partner´s country. Exploitation of the potential domestic market
MINAS GERAIS STATE: The ideal place for investments in Brazil Strategically located in the Southeast region of Brazil: concentrating 78% of Brazilian consuming market . 18 million people. Territory greater than many European countries. Plenty and cheap land for plantation Third largest South American economy. Excellent infra-structure Abundant energy and modern communication. Modern law on Public-private partnerships, respecting obligations with investors and partners. Expedient and practical action from Public Administration Strong competitiveness for new enterprises Highly qualified laborMINAS GERAIS State stands at a vibrant moment in its development,introducing entrepreneurial changes, innovation, paradigm shifts, andopenness for new alternatives and investments.
The State program for bio-fuelsThe program, set forth in Law no. 15.976/2006 has the following goals: Research and technology development; Technology transfer to the private sector; Job posts creating and improvement of income distribution; Reduction of fossil diesel imports; Reduction of gas pollution emission; Development of Feed-stock productionTargets up to 2007/2008 : 250.000 hectares crop plantation for production of B2 (blend 2% ), reaching 625.000 he for production of B5 in 2013; Direct income generation to 100.000 families, corresponding to about 500.000 job posts up to 2007.
Jatropha curcas: the feedstockPerennial crops of Jatropha Curcas will be used to protect lands that arevulnerable to erosion and to restore lands degraded by grazing.The yields of currently used biofuel feedstock vary widely. Jatropha seeds have proven advantageous in several spheres.
Jatropha curcas: the feedstockJatropha is identified under the physical-chemical platform ofbiomass energy conversion route. It is a drought-resistantperennial, living up to 50 years and growing on marginal soils(HENNING, 1996).The remote rural communities of the Brazilian semi-arid in droughtregions will be able to address their energy needs using theJatropha resource. The Jatropha Curcas was especially selected because the plant isnot an invasive species (GÜBITZ ET AL., 1999) and permits thegrowth of other plants in its vicinity, so it does not negativelyaffect the ecosystem. The results of the researches developed by EPAMIG, the State Agriculture R&D entity, in the 80´and the preliminary current( 2004/2006) results attest the potentiality of the jatropha curcas cultivation in the semi-arid region
Development modelThe development model is based on the workingrelationship between the community benefitingfrom the BIO-VALE project, a local technical NGO,an enterprising development agency , a foreigndevelopment agency, Government stakeholdersand a corporation.Each entity has its respective and important rolesthat complement, harmonize and support oneanother leading to the ultimate success andsustainability of the project. “The private sector can play an important role towards furthering development, for development cannot occur without conditions that are amenable to the conduct of business.” (United Nations)
Development model: Investment agencyMINASINVEST, a not-for profit investment agency, will be primarily incharge of the social-economic factors coordinating the efforts amongthe various stakeholders, which includes:enhancing logistics, building market information systems.Identifying and coordinating the best partners;Developing policies and strategies to improve competitiveness;Strengthening the producers´ negotiating position ;Providing well-researched analyses;Government and institutional relationships involved in the project.
Development model:The CommunityThe local community possesses direct responsibility towards the day-today running of the biofuel project . Particular emphasis is given onthe socio-economic empowerment of women, thus women groups willbe specially utilized to manage the project.The role of the community should therefore be:● Provision of land for Jatropha plantation and site for theestablishment of the oil extraction unit.● Responsibility for the day-to-day management of plantation,including: cultivation and harvesting.● Commitment of human resources for project development such asunskilled labor (to handle farmlands), access to skilled labor.In order to help the community in their quest towards sustainabledevelopment, it is very important that they should be the mainrecipient of all benefits accrued from the project.
BIOVALE ENERGY & PARTNERSGENERAL CORPORATE ACTIVITIES General coordination among the various stakeholders Resources (financial and management) Industrialization: oil extraction and trans-esterification Logistics (sales, distribution, export process, shipping)GENERAL CONSULTING ACTIVITIES turn-key/Global solution in BioDiesel projects Research & Development Institutional and Government support Project development, Project Financing an Funding International product commercialization Logistics (sales, distribution, export process, shipping)
professional managementImplementation goals Internal External capabilities capabilities Professional POOL monitoring Roles of strategies stakeholders Resources Action plan management BioVale Energy: your partner in Brazil.