LEDS LAC - OECD CEFIM Finance and investment mobilisation for bioenergy projects in LAC: regional peer-learning event, 12 December 2022, OECD virtual event

1. Luiz A. Horta Nogueira
Universidade Federal de Itajubá
Brazil
Biofuels: some facts and prospects
1
FINANCIACIÓN Y MOVILIZACIÓN DE INVERSIONES PARA PROYECTOS
DE BIOENERGÍA EN LATINOAMÉRICA Y EL CARIBE
Taller regional

2. 2
Biofuels today: facts and prospects
Outline
üBiofuels: a global perspective
üSugarcane: a feedstock of choice for biofuels
üThe Brazilian experience on ethanol from sugarcane
üRemarks on financing biofuels projects

3. 3
Driven by socioeconomic, environmental and energy security reasons,
interest in biofuels grows. Nowadays several countries have programs
fostering biofuels use for mobility, typically in blends with conventional
fuels.
Biofuels use expands globally.
(BiofuelsDigest, 2019)
Countries adopting biofuels blending mandates

4. 4
The transition towards sustainable bioenergy can and should be faster,
mainly in wet tropical regions, in which bioenergy can be more
efficiently produced.
Biofuels use must be accelerated
(IEA, 2022)
Biofuel markets prospects in developing countries

5. 5
International Energy Agency perspective for bioenergy

6. 6
Global biofuel production 2019 and forecast to 2025
During 2023-25, average global output of 182 billion L is anticipated,
with the greatest production increases being for ethanol in China and
Brazil, and for biodiesel&HVO in the US and the ASEAN region.
Biofuels are expected to meet around 5.4% of road transport energy
demand in 2025, rising from 4.8% in 2019. (IEA, 2021)
International Energy Agency perspective for biofuels

7. 7
Long term forecasts indicate an even greater expansion and
diversification of biofuels (IEA, 2022).
International Energy Agency perspective for biofuels
Global biofuel production by technology in the Sustainable
Development Scenario, 2019-2070

8. 8
Prospects on the automotive industry side
New technologies can improve even more the biofuels use
Innovative concepts for internal combustion engines, such as Variable
Compression Ratio, new powertrain designs, such as Hybrid FFVs and
disruptive technologies, such as Fuel Cells, assure performance gains
with biofuels in road vehicles. Electric vehicles work better with biofuels.
Toyota Corolla HEV FFV
< 20 gCO2/km
Nissan e-Bio,
SOFC and reformer on board

9. 9
Sugarcane, a traditional culture in almost
all tropical countries, is:
- one of the most efficient solar energy
converter to biomass, a feedstock of
choice for bioenergy production.
- a semi-perennial crop, planted once
and harvested annually for 5 to 6
years.
As a whole, 1 ton of sugarcane is
equivalent to 1.2 barrel of petroleum, thus:
one hectare of sugarcane produces
more than 100 barrels of oil per year,
forever...
Sugarcane: an excellent feedstock for ethanol

10. 10
Considering all direct and indirect energy costs, today each unit of fossil
energy produces 8 to 10 units of renewable energy and can reach more.
Despite of the intense mechanization of planting and harvest, sugarcane
still requires much more human labor than any other energy technology.
A typical sugar and
ethanol mill in Brazil
(BNDES, 2009)
The sugarcane agroindustry

11. 11
R&D and innovation have been fundamental for improving bioenergy.
Examples of techniques broadly adopted:
Biological(control(of(sugarcane(borer((Diatraea
saccharalis)(using(a(wasp (Cotesia flavipes)
(Bento,(2006)(
Use$of$vinasse$as$fer,lizer$
(UNICA,(2008)(
Power&genera*on&from&sugarcane&bagasse&
(UNICA,(2006)(
Evolu&on(of(water(use(in(sugarcane(mills(in(Brazil((
(Elia&Neto,&2010)&
Applied knowledge fostered sustainability

12. 1
2 Agroindustrial technology evolution
Improvements in sugarcane production, logistics and processing
allowed an 260% increase in yield and 70% reduction in costs.
2.000
3.000
4.000
5.000
6.000
7.000
40
45
50
55
60
65
70
75
80
85
1975 1980 1985 1990 1995 2000 2005 2010
litre/ha
ton/ha or litre/ha
Sugarcane yield (ton/ha)
Industrial productivity (litre ethanol/ton)
Agroindustrial productivity (litre ethanol/ha)
(MAPA, 2014)

13. 13
There are new promising opportunities for improving the sugarcane
bioenergy agroindustry, increasing its sustainability in all aspects.
Bioenergy can be produced even more efficiently.
- Sugarcane trash recovery and utilization
- Energy cane
- Second generation ethanol processes
- Precision agriculture
- Biogas production from stillage, and other.
to select plants of the first stage of energy cane, i.e., plants
with higher biomass productivity [63]. With this type of
feedstock, even in the current sucrose/ethanol agroin-
dustry, provided that has also a cogeneration unit, the
economic return could be greater than that afforded by a
variety of high sucrose content.
With the paradigm shift, it would be possible to add a
considerable gain with no additional effort in the genetic
breeding. Since the selection of its first series (2003), the
CanaVialis breeding program has conducted a subprogram
in which that kind of clone follows a parallel selection
process [1]. Moreover, these clones have been also returned
to the active germplasm bank to be part of a recurrent
selection program for increased biomass production.
In the introgression program that started in CanaVialis,
the preliminary results were promising. Data from clones
selected among some hundreds of F1 clones from a cross
between a commercial hybrid and S. spontaneum are pre-
sented in Table 5. The number of stalks per linear meter
ranged from 35 to 40, the fiber content ranged from 15.35
to 19.90 against 12.05 of the commercial variety, the stalks
productivity ranged from 155 to 236 tons against 148 tons
of commercial variety, and the productivity of fiber ranged
from 30.63 to 40.25 tons [1]. Considering the leaves and
stalks, the advantage would be even greater; if in the com-
mercial variety they represented 15%, in the energy cane
they exceeded 25%. In Figure 1, the morphology of this
type of plant can be seen.
Recently, Ogata [64] evaluated the fiber composition
of 207 energy cane genotypes with high fiber content
from IAC breeding program in Brazil. Cellulose com-
position varied from 26.5% to 54.2% (average of 44.2%),
while hemicellulose varied from 16.7% to 26.0% (average
of 21.7%) and lignin content ranged from 17.7% to
27.1% (average of 23.5%). These results show that differ-
ent varieties of energy cane can be selected based on the
process of conversion adopted. For instance, if we were
looking at biomass to burn and produce electric power,
varieties with higher lignin content would be preferred.
Issues regarding the industrial use
Because of its lower sugar concentration, energy cane
was not been widely cultivated until recently, with the
development of lignocellulosic ethanol conversion tech
nologies. In the USA, the development of energy cane
with increased overwintering ability could result in a
crop that has a far wider range of adaptation than the crop
that presently exists [65]. Aiming to evaluate the potentia
expansion of the seasonal operation of Louisiana suga
mills (currently operating for only 3 months every year be
cause of the sugarcane availability) as well as to generate
ethanol in these mills, Kim and Day [66] studied the
utilization of two additional feedstocks: sweet sorghum
and energy cane. Based on this work, it was assumed tha
13 tons of ethanol could be produced from 1 ha of energy
cane (considering a productivity of 100 tons/ha), more
than twice than the estimated production for swee
RB72454 14 14.60 12.05 148 17.08
Source: Matsouka et al. [1].
Figure 1 Example of energy cane and sugarcane at 90 days
after planting. Left: F1 of S. officinarum × S. spontaneum; Right:
commercial hybrid of sugarcane (Source: IAC/2014).
Energy cane
(at left) and commercial
sugarcane (at right) at 90 days
after planting
(Carvalho-Netto et al., 2014)
2G ethanol plant
Alagoas, Brazil
(Granbio, 2018)
Frontiers developments in sugarcane bioenergy

14. How biofuels mitigate CO2 emission?
14
(Modified from FCA, 2020, emission data from Macedo et al.,2008)

15. Bioenergy evolution in Brazil
Biomass as energy shifted during the last decades from residential use
to industry and transport.
https://ben.epe.gov.br/default.aspx
0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0
Setor industrial
Setor de Transporte
Setor Residencial
Mtep (106 tep)
Lenha Carvão vegetal Derivados da Cana-de-açúcar Outros
88,4% do
total
consumido
pelo setor
1,1%
49,0%
Consumo
total no
Brasil:
60,6 Mtep
0.0 5.0 10.0 15.0 20.0
Setor industrial
Setor de Transporte
Setor Residencial
Mtep (106 te
Lenha Carvão vegetal Derivados da Cana
26,0%
1970
.0 15.0 20.0 25.0 30.0 35.0 40.0
Mtep (106 tep)
Derivados da Cana-de-açúcar Outros
88,4% do
total
consumido
pelo setor
49,0%
Consumo
total no
Brasil:
60,6 Mtep
0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0
Setor industrial
Setor de Transporte
Setor Residencial
Mtep (106 tep)
Lenha Carvão vegetal Derivados da Cana-de-açúcar Outros
26,0%
25,1%
40,0%
Consumo
total no
Brasil:
245,6 Mtep
2019

16. Brazilian Energy Matrix
Biomass is the main renewable source of energy in Brazil.
Sugarcane (as ethanol and electricity), wood and vegetable oils
represented about 33,7% of national energy consumption in 2020.
(Nogueira et al., 2019)

17. 17
Biofuels, especially ethanol from sugarcane, con be competitive
and sustainable. Scale matters, small is not necessarily beautiful.
However, financing biofuels projects can be risky and need:
ü Proper assessment, planning and design
ü Stable fuel market regulation
ü Proper fuel specifications
ü Even and foreseeable blending mandates
ü Fair pricing scheme and tax regime
ü Environmental and social differential benefits of biofuel deserve
compensation (example: Renovabio)
1
7
Remarks on financing biofuels projects

18. RenovaBio Program
Launched in 2017 as the Brazilian National Biofuel
Policy, RenovaBio aims:
- promote GHG emission mitigation, in line with
Brazilian targets set in COP21.
- foster bioenergy agroindustry, improving energy
security and with positive impacts on income and
jobs generation.
RenovaBio is founded on three pillars:
§ Annual decarbonization targets set by the government for a ten
years period, to be accomplished by fossil fuel distributors.
§ Issuance of CO2 emissions reduction certificates, named
“CBio” (a Decarbonization Credit) by biofuel producers.
§ CO2 emission in biofuels production is evaluated through Life
Cycle Analysis (LCA), as certified by qualifying agencies for
each producer unit.

19. Is bioenergy just for tropical countries?
19
TJ
oil
W
Bioenergy front-runner
Energy consumption in Finland
Official Statistics of Finland (OSF): Energy supply and consumption [e-publication]. ISSN=1799-7976. Helsinki: Statistics Finland.
http://www.stat.fi/til/ehk/index_en.html
nuclear
hydro and wind
coal
nat. gas
wood
peat
(Blas Mola, 2022)

20. Thanks for your attention.
Obrigado por sua atenção.
Luiz A. Horta Nogueira