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  1. 1. Biofuels in Brazil - Historical Background in Brief 2010 2009 2008 2005 2003 1984/85 1979 1978 1975 1932 1925
  2. 2. Brazilian Energy Police (PNE) Enhance the participation of BIOFUELS in the national mix Consumers protection Guarantee fuel supply for the whole country (851 million ha) Free competition promotion Attracting investments for power generation and transmission Expand the countrys competitiveness Partial substitution of diesel Environment Protection Source: MME
  3. 3. PNE Biofuel Related Goals – How to achieve Protecting consumer Energy security interests with respect to price, quality and supply National• ↑ Diversification of the matrix with renewable • ↑ Economic competitiveness of biodieselsources Energy Policy • ↑ Competitive level in the supply chains• ↓ Agricultural risks in the energy market (PNE) • ↑ Biodiesel quality & its effects on vehicle Goals • ↑ Learning curve of biodiesel• ↓ Dependence on soybean Environment protection Partial substitution of petrodiesel importation • Need of agricultural expansion under delimited areas defined by AEZ Maps • ↓ Vehicle emissions Spur economic activity • ↑ Knowledgement of the impacts by type • ↓ Diesel dependence & expand the countrys of crop (soybean, palm, sunflower, • ↓ Impacts and costs of urban transport sugarcane, etc.) competitiveness in • ↓ Impacts on heavy lorry transport • ↓ Impacts on electric power generation international market • ↓ Emissions of pollutants at isolated communities • ↓ Balance of CO2 and other greenhouse • ↓ Influence on the economic growth • Job creation & income generation gases • The expansion of any energy ▪ Sustainability & responsibility source considering its impact on • ↑Competition between biofuels and other competitiveness of whole economy clean energies Sources: MME,MCT
  4. 4. Brazilian Energy Mix Natural Gas 8,8 Non-renewable Coal 4,8 Petrol 52,8% Products Traditional 37,9 Biomass 10,1 Sugar Cane Products 47,2% 18,0 Nuclear 1,4 Renewable Hydro Other 15,2 Renewables 3,8 Source: MME
  5. 5. Brazilian Energy Mix in Relation to the WorldMarket WORLD (2008) 12,6% 87,4% OCDE (2008) 6,8% 93,2% BRAZIL (2009) 47,2% 52,8% Renewable Non Renewable Source: MME
  6. 6. PNE Strategy for Biofuels Stable Differentiated Mandatory Agro Zoning Standards Taxation Admixtures Maps International Funding R&D&Inovation Promotion BIOFUELS Interlinked Policies Agri Industrial Environ. Economical Social Labour R &D & I BACKGROUND • Seizing the national vocations • Free competition • Protection of consumers interests • Investment attraction • Country competitiveness • Energy security • Sustainability & responsibility Source: MME
  7. 7. Regulatory FrameworkLaw nº 9.478/97 Definition of principles and objectives of the National Energy Policy CNPE: proposal of specific policies and measures on biofuels ANP: regulation and supervision of the biofuels industryLaw nº 9.847/99 The national fuel supply is considered as a public utility Rules of supervision and administrative sanctionsLaw nº 8.723/93• Mandatory addition of anhydrous ethanol in gasoline (E20 to E25)Law nº 11.097/05• Introduction of biodiesel in the mix & mandatory addition of biodiesel in diesel (from B2 to B5) Source: MME
  8. 8. Differentiated Taxation Light Vehicles Taxation Motor Fuel Alíquota IPI (%) Gasoline 7,0% 1.0 Ethanol / Flex Fuel 5,0% Gasoline 13,0% 2.0 Ethanol / Flex Fuel 11,0% Fuel Federal Taxation Tax (R$/liter) Motor Fuel Cide + Pis/Pasep + Cofins Gasoline “C” R$ 0,369 OTTO Ethanol Hydrous . R$ 0,120 Diesel R$ 0,180 DIESEL Biodiesel R$ 0,0 to R$ 0,178 Source: MME
  9. 9. Sugar Cane in Brazil 9% of production Amazon Forest Main cultivation regions Ethanol production in 2009: 26 billons of liters 91% of production Sources: NIPE-Unicamp, IBGE, CTC, UNICA, EPE e MAPA.
  10. 10. Agricultural Zoning Maps – Sugar CaneAgricultural zoning identifies climate risks for each crop, setting the better times ofplanting for each regoins and municipalities; also indicates forbidden areas for cultivation AZM Sugar Cane (2009) Three excluded biomas: - Amazon - Pantanal - Alto Paraguai Basin • Potential apt areas = 64 million ha (7,5% of brazilian territory) • Present area in use = 4,5 million ha. 92.5% of brazilian territory unfit for cultivation and processing of cane sugar for environmental reasons Source: EMPRAPA
  11. 11. Agricultural Zoning Maps – Main Oil Seeds Crops Palm Oil Castor Oil Cottom Palm Palm Oil Soy Suflower Soy Canola Source MME, MDA:
  12. 12. Why to expand biofuels & HowPOSITIVE EXTERNALITIES: HOW: Renewable energy source Research, Innovation and Technology Transfer Best CO2 balance Appropriate Public Policies on: & pollutant emissions Investments/Subsides Income distribution Agriculture Multiplicity of companies Local Technical Assistance and countries involved Production Industry Transport and Logistics Greater job creation & social inclusion Rural Credit Potentiatilization of Vehicle Industry development areas agriculture is just Attraction of Private beginning/incipient Investments (large scale producers and investors) Trade Balance Source: MME
  13. 13. Ethanol – Production Plants Plants in operation 2009 (427) Plants under construction 2009 (46) Source: MME
  14. 14. Biodiesel – Panorama PNPB main tasks Present situation1. Introduction of a new renewable Ok. plants in operation; establishment of regulatory framework, anticipated goals, B5fuel in the market throughout, stability of supply. Ok. Biodiesel production has been contributed2. Reduction of diesel imports considerably during the last years to the payment balance; but last year its effects has been reduced as diesel imports grew considerably due to greatest warming of the economy.3. Diversification of crops and At a slow pace. The response time of agriculture is different. There is not scale, logistics and sufficientexpansion of oil production know-how to the rapid expansion of "new oilaccording to regional differences alternatives” rather than soya in the short-term. Brazil remains an importer of palm, sunflower and canola oils. Fresh perspective to palm with the program recently launched, but results in the medium term.
  15. 15. Biodiesel – Panorama PNPB main tasks Present situation Missed. Biodiesel still more expensive.4. Competitiveness with diesel Compulsory. Authorized market is not yet feasible In progress. Plants scattered throughout the country, with more concentration in the Mid5. Reduction of regional west and Southeast. The North and Northeastinequalities have not shown greater competitiveness for the furthest distance from the main raw material available (soybean). In progress. Creation of the Social Fuel Stamp (model combined participation between agribusiness and small-scale agriculture), but the challenges are many. Concentration in6. Strengthening of family farming places where family framing was already taking palce and structured based on soy, particularly in Rio Grande do Sul Recently, it has grown in the Northeast with the new Petrobras Biodiesel Production Plants ( PBio).
  16. 16. Biodiesel Production Plants Total 2008 Production: 1,2 billion L (B2/B3) Total 2009 Production: 1,6 billion L (B3/B4) Total 2010 Production: 2,3 billion L (B5) Installed Capacity Region Plants 3 th. m /yr % N 6 193 4% NE 5 706 13% CO 24 1,921 37% SE 11 891 7 17% Plants with Plants without Social Stamp Social Stamp S 9 1,544 29% (1,000 m3/yr) (1,000 m3 /yr) Total 55 5,255 100%Sources: MME/SPG & ANP
  17. 17. PNPB Main bottleneck: heavily reliance on soybeans Others cottom Beef tallow Soybeans Needs of diversification of raw materials Elaboração:MME. Fonte: ANP
  18. 18. Biofuels Main BarriersResistance to the new geopolitical dynamic energy marketsStatus Quo still heavily oriented to non-renewable fossil sources of energyLow competitiveness, small scale productionHigher pricesDebate over land use and food securityRaw materials priced in non-energy marketBarriers and restrictions on international tradeLimited knowledge on new agricultural raw materialLack of global science-based criteria for sustainable biofuels production
  19. 19. Where to go on the next 10 years Ethanol – Strong supply growth based mainly on the domestic demand – Expansion of exports focussing on US, EU and Asia – Introduction of commercial projects for 2nd generation ethanol – Development of bi-fuel hybrid vehicles Biodiesel – Increasing competitiveness and reducing production costs – Consolidation of B100 in the market and family farming production – Start biodiesel exportation – Diversification of raw materials (palm oil, jatropha, macauba, sugar cane, etc.) – Development of a new “flex fuel diesel vehicle”:B100 + diesel + ethanol Biokerosene – Creation of a new governamental programme
  20. 20. New biofuels – Agenda for the next 10 years Cellulosic ethanol Sugarcane bagasse, grass, wood, agricultural (corn stover, rice and wheat straws,etc.) & forestry residues Sugar cane biodiesel – Microbial conversion of sugars – Biodiesel, bio-jet & chemical products Oil seeds with higher energy densities – Palm oil, macauba, babassu, jatropha, etc. Biokerosene – Needs for higher pressure aiming at a higher commitiment of the airline industrie to climate changes Algae Biosynthetics via thermochemical routes Synthetic biology applied to develop biofuels Biobased chemical & plastics Hidrogenation of oils, HVO & HtL Biofuels
  21. 21. Cellulosic Ethanol Technologies in Brazil Dedini Organosolv Process – Ethanol/water solvent treatment; Sulfuric acid hydrolysis – 2004 pilot unit Center for Sugarcane Technology (CTC) – Alliance with Novozymes for development of enzymatic hydrolysis – Pretreatment based on wet alkaline oxidation MCT Programme Bioethanol – Consortium of several Brazilian universities and research centers – Pretreatment by steam explosion, enzymatic hydrolysis Petrobras – Dilute acid pretreatment, enzymatic hydrolysis – 2008 pilot unit – Partnership with KL Energy for commercial plant in 2013 Shell-Cosan JV – Shell has stakes in Iogen and Codexis Source: SRI Consulting
  22. 22. Special acknowledgments MME: Ricardo Borges Gomide & Ricardo Gusmão Dornelles MCT: Adriano Duarte & Rafael Meneses ANP: Rosangela Moreira Presidency Cabinet/Govern. Polices Dept.: Rodrigo Rodrigues & J. Accarini EMBRAPA: Silvio Crestana & Frederico Durães INMETRO: Romeu Daroda & Humberto Brandi INT: Domingos Manfredi & Attilio Travalloni UFOP: Dieter Bockey & Klaus Kliem BBE: Helmut Lamp
  23. 23. Contact INT Ave. Venezuela, 82/608 20081-312 Rio de Janeiro – Brazil Tel.: +55 (21) 2123 1198/1210 Fax: +55 (21) 2123 1194 e-mail: Muito Obrigado !