Investments in Brazil`s Biofuels: A TBL opportunity? TBLI Conference – Emerging Markets Paulo Bellotti

Agenda Brief overview of Axialpar Fossil vs. Bio fuels Bio-ethanol Bio-Diesel TBL issues

Brief overview of Axialpar

Fossil vs. Bio fuels

Bio-ethanol

Bio-Diesel

TBL issues

Axialpar – Who we are Founded in 2001 Investors in Sustainable Venture Capital economic : Businesses driven by innovative products and services Barriers to entry: know-how – R&D High growth rates environmental : Positive impact on biodiversity social : Social inclusion Capacity building long term perspectives : success >> speed

Founded in 2001

Investors in Sustainable Venture Capital

economic :

Businesses driven by innovative products and services

Barriers to entry: know-how – R&D

High growth rates

environmental :

Positive impact on biodiversity

social :

Social inclusion

Capacity building

long term perspectives :

success >> speed

Axial phase I Axial phase I (2002 a 2006) Investments of R$ 60 million (R$ 35 million) Portfolio : Agricert

Axial phase I (2002 a 2006)

Investments of R$ 60 million (R$ 35 million)

Portfolio :

Fossil vs. Bio fuels Today volume of biofuels are 1 % of fossil fuels, approximately Global consumption: Gasoline: 1.2 trillion liters/year Diesel: 1.2 trillion liters/year If we provide for a 10% substitution: Ethanol (Gasoline): 150 billion liters Biodiesel (Diesel): 130 billion liters Land required Ethanol: Sugar Cane (+25 mm ha); Corn (+43 mm ha) BIodiesel: Soy (+260 mm ha); Castor oil (+280 mm ha); Palm (+43 mm ha); Jatropha (+ ? mm ha)

Today volume of biofuels are 1 % of fossil fuels, approximately

Global consumption:

Gasoline: 1.2 trillion liters/year

Diesel: 1.2 trillion liters/year

If we provide for a 10% substitution:

Ethanol (Gasoline): 150 billion liters

Biodiesel (Diesel): 130 billion liters

Land required

Ethanol: Sugar Cane (+25 mm ha); Corn (+43 mm ha)

BIodiesel: Soy (+260 mm ha); Castor oil (+280 mm ha); Palm (+43 mm ha); Jatropha (+ ? mm ha)

Biofuels - Ethanol Ethanol raw materials Sugar cane (energy balance: 8.5) Corn (energy balance: 1.2) Cost Ethanol cane: US$ 0,22 /l Ethanol corn: US$ 0,40 /l (US$ 0,14c/l tariff) Process Cane – Milling – Fermentation – Distillation Production: Brasil: 16 bn liters (US: 18 bn liters; others: 17 bn liters) 335 mills; 77 in construction; 85 announced 6 million ha (3 million ha ethanol – 5% of agricultural area of Brasil) Geography [include detailed map of Brasil]

Ethanol raw materials

Sugar cane (energy balance: 8.5)

Corn (energy balance: 1.2)

Cost

Ethanol cane: US$ 0,22 /l

Ethanol corn: US$ 0,40 /l (US$ 0,14c/l tariff)

Process

Cane – Milling – Fermentation – Distillation

Production:

Brasil: 16 bn liters (US: 18 bn liters; others: 17 bn liters)

335 mills; 77 in construction; 85 announced

6 million ha (3 million ha ethanol – 5% of agricultural area of Brasil)

Geography

[include detailed map of Brasil]

Bioethanol in Brasil Export potential of 60 to 150 billion liters – gasoline additive A global market with one supplier? Internal consumption up to 30 billion liters – flex vehicles Innovation 85 liters/ton of sugar cane today: + 27 to 41 liters/ton with New varieties (traditional and GMO) BTL enzymatic (a must for corn!) Potential area increase in Brasil + 20 million ha (non-irrigated) Food x Feed x Fuel x Fiber Brasil agricultural area: 60 mm ha Food: 20 million Cattle: 40 million Cattle moves to ? (Amazon or integration) Brasil other potential areas: 90 mm ha

Export potential of 60 to 150 billion liters – gasoline additive

A global market with one supplier?

Internal consumption up to 30 billion liters – flex vehicles

Innovation

85 liters/ton of sugar cane today: + 27 to 41 liters/ton with

New varieties (traditional and GMO)

BTL enzymatic (a must for corn!)

Potential area increase in Brasil

+ 20 million ha (non-irrigated)

Food x Feed x Fuel x Fiber

Brasil agricultural area: 60 mm ha

Food: 20 million

Cattle: 40 million

Cattle moves to ? (Amazon or integration)

Brasil other potential areas: 90 mm ha

Biodiesel Raw materials Soy – non sustainable Palm (3000 l/ha vs. 6000 l/ha ethanol) Jatropha Animal fat B2 (2008 – 800 million liters); B5 (2013); and B100 Limited export potential Geography [map of brazil and other palm oil exporters]

Raw materials

Soy – non sustainable

Palm (3000 l/ha vs. 6000 l/ha ethanol)

Jatropha

Animal fat

B2 (2008 – 800 million liters); B5 (2013); and B100

Limited export potential

Geography

[map of brazil and other palm oil exporters]

TBL Issues Ethanol Corn Sugar cane Cattle x land Biodiesel Soy; Colza Palm Jatropha Distributed model / degraded land

Ethanol

Corn

Sugar cane

Cattle x land

Biodiesel

Soy; Colza

Palm

Jatropha

Distributed model / degraded land

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