The actual scenario of the brazilian ethanol industry

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The actual scenario of the brazilian ethanol industry

  1. 1. By: Marcelo Dodson marcelododson@gmail.com
  2. 2. Brazilian Ethanol Chronological Facts Brazil was discovered in April 22,1500 In 1532,Martim Afonso de Sousa arrived in Brazil brining sugarcane stems. For more than 200 years, the sugarcane production focused on three majors products 1. Sugar 2. Animal Feedstock 3. Cachaça brandy1530
  3. 3. Brazilian Ethanol Chronological Facts • 5% (E5) blend of ethanol and gasoline was added • During the 2nd World War, the Northeast Region used a 40% (E40) blend.1530 1931 - 1945
  4. 4. Brazilian Ethanol Chronological Facts • The 1973 oil crisis • National Alcohol Program is launched in 1975 (PROALCOOL)1530 1931 - 1945 1973-1975
  5. 5. Brazilian Ethanol Chronological Facts Percentage of cars manufactured with Ethanol Engineering % 90 0 1986 1990s Source: Adapted from Hofstrand (2009)1530 1931 - 1945 1973-1975 1986 1990s
  6. 6. Brazilian Ethanol Chronological Facts Percentage of sales of FLEX FUEL vehicles % 90 0 2003 2010 Source: Adapted from Seelke & Yacobucci (2007)1530 1931 - 1945 1973-1975 1986 1990s 2003 2009-2010
  7. 7. Brazilian’s Sugar Cane Production System
  8. 8. Brazil enjoys the fact that it has two distinct harvest periods 1. North-Northeast region From November to April 2. Center-South From May to November
  9. 9. Source: Di Ciero (2010)
  10. 10. Brazil has approximately 63.48 million hectares (151 million acres) for theexpansion of the sugarcane (Brazil/ Presidencia da Republica, 2009). This regulation considers environmental, economic, and social aspectsto guide both sustainable expansion of sugarcane production and investments inthe biofuel sector ZAE Cana excludes areas with slope bigger than 12%, forest (i.e. Amazonforest and Pantanal Swamp), and other areas.
  11. 11. Sugar mills Independent distilleries15 157 248 Mills with distillery plants Source: MAPA (2010)
  12. 12. Distribution per region
  13. 13. (336.276,100 tons) 53,8% 46,2%27.67 billion Liters 38,675,500 Tons
  14. 14. Ethanol (Billion of liters) Production Consumption Export
  15. 15. 2010 GDP: 7.5% 2010 unemployment: 5.3% Gasoline has 22-25% of ethanol FFV sales represent roughly 90% of new vehicle sales by end of year. By the year 2013 more than half of the Brazilian fleet will be FFV At the pump, he end-user can decide between gasoline or Ethanol by multiply the gasoline price by 0.7.
  16. 16. The predominant mode of ethanol transport is road system because its competitiveness on short routes and low load conditions. In general, the plants are located, in agricultural areas away from major transportation routes and, individually, have no scales of production that enable the use and investment in other modes of transport.http://caminhoesracing.blogspot.com/2009/09/treminhao.html
  17. 17. Railroad system In 2008, the Center South region concentrated 68.3% of the national ethanol railroad system and seven from 10 main railroads terminals are destined to receive the fuel. The average railway distance in the region were 900 km (between 500 and 2,300 km), and the annual volume transported is approximately 1.6 million cubic meters (moving between 50 thousand and 400 thousand cubic meters in the main section)http://www.ocoruja.com/index.php/2009/o-brasil-esta-embarcando-nos-trens/
  18. 18. Brazil has approximately 5,700 miles of pipelines for combustive transport
  19. 19. Investment: U.S. $ 1.2 billionExpected costs reduction: 10%Volume: 12 million m3 of ethanol (Transpetro, 2010)
  20. 20. Source: UDOP (2010)
  21. 21. In Brazil, the ethanol marketing is become more concentrated. Seven major groups already dominate 67% of the ethanol sales in Brazil.Foreign control of Brazilian ethanol and sugar companies is now up to 22 percentMills 39 23 9 13Sugar 5.2 4 2.3(million tons )Ethanol 3.9 2.2 3 1.5(billion liters) the largest global the largest Brazilian sugarcane-bagasse- sugar, ethanol and based electric energy bioenergy company generator,
  22. 22. The sugarcane industry is the biggest jobs generator of the Brazilian agriculture sector. • Employees 629 thousand people • The industry will generate others 170 thousand jobs in the following yearsLaws and Agreements • The Brazilian labor law • The Brazilian labor ministry published the regulation 31 • National commitment for the improvement of labor conditions in sugarcane production The result of these actions reduced the child labor in the sugarcane industry in 86% (from 14.7% to 3.3%) of temporary workers and almost to 100% of permanent workers, from 1992 and 2005 (Balsadi, 2007). http://www1.folha.uol.com.br/folha/galeria/imagemdodia/p_20070421_08.shtm
  23. 23. BRAZIL U.S.A
  24. 24. BRAZIL U.S.A Description Mills Ethanol Jobs GDP Fleet 7.5 Billion 61 million Brazil 453 630,000 26 billion Gallons vehicles 13 Billion 246 The US 204 400,000 53.3 Billion Gallons million
  25. 25. BRAZIL U.S.A (Hofstrand, 2009)
  26. 26. marcelododson@gmail.com
  27. 27. ReferencesAchar fleury 2005 seminario brasileiro de de logistica de distribuicaoArasu, K.T. “Ethanol Boom Won’t Threaten Food Supply,” Reuters, June 4, 2007Balcombe, k., & rapsomanikis, G. (2008, 08). BAYESIAN ESTIMATION AND SELECTION OF NONLINEAR VECTOR ERRORCORRECTION MODELS: THE CASE OF THE SUGAR-ETHANOL-OIL NEXUS IN BRAZIL. American Agricultural EconomicsAssociation , pp. 658-668.Balsadi, O. V. (2007, 04 12). Pastoral do Migrante. Retrieved 10 14, 2010, fromhttp://www.pastoraldomigrante.com.br/index.php?view=article&catid=39%3Aartigos&id=164%3Ao-mercado-de-trabalho-assalariado-na-cultura-da-cana-de-acucar-&option=com_content&Itemid=78Barreto, E., & Ewing, R. (2010, 08 25). Reuters. Retrieved 10 06, 2010, from http://www.reuters.com/article/idUSTRE67O2VN20100825Bioagência . (2010). Bioagência . Retrieved October 10, 2010, from http://www.bioagencia.com.br/textos/index.php?id_texto=1Brazil. (2010, September 15). Ministerio do planejamento. Retrieved 10 10, 2010, fromhttp://clippingmp.planejamento.gov.br/cadastros/noticias/2010/9/15/grandes-ja-vendem-67-do-etanolBrazil/ Presidencia da Republica. (2009, September 17). Planalto. Retrieved 10 14, 2010, from http://www.planalto.gov.br/ccivil_03/_Ato2007-2010/2009/Decreto/D6961.htmBrazil/MAPA. (2009). Anuario Estatistico de Agroenergia. Brasilia, DF: Ministerio da Agricultura, pecuaria e abastecimento.Brazil/MAPA. (2010, 08 30). Ministerio da agricultura, pecuaria e abastecimento. Retrieved 10 14, 2010, fromhttp://www.agricultura.gov.br/pls/portal/docs/PAGE/MAPA/SERVICOS/USINAS_DESTILARIAS/USINAS_CADASTRADAS/UPS_30-08-2010_0.PDFBrazil/MAPA. (2010). Projeções do Agronegócio : Brasil 2009/2010 a 2019/2020. Brazilia,DF: Ministerio da agricultura.Collares, D. G. (2010, 07 01). Embrapa. Retrieved 10 06, 2010, from http://www.embrapa.br/embrapa/imprensa/noticias/2010/junho/4a-semana/embrapa-agroenergia-apresenta-balanco-energetico-do-etanol-celulosicoCopersucar S.A. . (2010). Copersucar. Retrieved 10 14, 2010, from http://www.copersucar.com.br/hotsite/2010/perfil_en.htmlCosan. (2010). Cosan. Retrieved 10 10, 2010, from http://www.cosan.com.br/Dale, B. E. (2010, 02 16). BIOFUELS & INDIRECT LAND USE CHANGE:A DEBATE ON THE ISSUES. 15th National Ethanol Conference, p. 35.Elobeid, a., & tokgoz, s. (2008, november). Removing distortions in the u.s. ethanol market: what does it imply for the united states and brazil?Agricultural and Applied Economics Association , pp. 918–932.ETH Bioenergia. (2010). ETH Bio. Retrieved 10 14, 2010, from http://www.eth.com/index.cfm/0/en/HomeEurope. (2007). Renewable Energy Road Map. Brussels.Farrell, A E. Plevin, Richard J. Turner, Brian T. Jones Andrew D., O’Hare ,Michael. Kammen, Daniel M. “Ethanol Can Contribute to Energyand Environmental Goals,” Science, January 27, 2006, pp. 506-508; U.S. Environmental Protection Agency (EPA), Greenhouse Gas Impacts ofExpanded Renewable and Alternative Fuels Use, April 2007.Gorter, h., & just, d. R. (2009, 05). Credit and the interaction effects with price contingent farm subsidies. Agricultural and applied economicsassociation , pp. 477–488.
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