Conference on
Biofuels: an option for a less carbon-intensive economy
4-5 December 2007
Bioenergy for the future
by:
Mauricio T. Tolmasquim
President
Empresa de Pesquisa Energética – EPE
The views expressed are those of the author and do not necessarily reflect the views of UNCTAD
Bioenergy for
the Future
Mauricio T. Tolmasquim
President of
Empresa de Pesquisa Energética – EPE
Summary
World Biofuel Market „
Motivation for Biofuels „
Biofuel Market Growth „
Brazilian Outlook „
World Biofuel Challenges „
3
Summary
World Biofuel Market „
Motivation for Biofuels „
Biofuel Market Growth „
Brazilian Outlook „
World Biofuel Challenges „
4
World Ethanol Market
2006 World Total Market
(Billion Liter per Year)
Production
46.6
Consumption
45.7
International Trade
Ethanol Source
USA
3.7
From Corn
97%
From Other Feedstocks
60
2006
Billion Liter per Year
50
Production
Consumption
International Trade
40
30
20
2006
18,4
20,3
18,0
3%
Brazil
From Sugarcane
100%
EU-25
Wheat
70%
Corn
10%
Barley
15%
Rye
14,6
5%
10
3,5
4,1 3,9
3,3 3,5
0,2
0
USA
-2,6
Brazil
-0,3
EU 25
China
1,8 2,3
1,0 1,0
-0,4
India
Others
-10
Others: includes Russia, South Africa, Saudi Arabia, Thailand, Ukraine,
Canada, Poland, Indonesia, Argentina, Australia, Japan, Pakistan,
Philippines, South Korea, Guatemala, Cuba, Ecuador, Mexico, Nicaragua,
Mauritius, Zimbabwe, Kenya and Swaziland
Source: FAPRI Agricultural Outlook 2007
Renewable Fuels Association 2007
5
World Ethanol Market
2016 World Total Market
(Billion Liter per Year)
Production
88.4
Ethanol Source
Consumption
87.3
USA
International Trade
From Corn
4.7
60
2016
Billion Liter per Year
50
47,7
48,9
Production
2016
Consumption
International Trade
40
92%
From Other Feedstocks
2%
Cellulosic
6%
Brazil
From Sugarcane
100%
EU-25
28,5
30
23,7
20
10
4,8
5,5
USA
-1,2
Brazil
EU 25
70%
Corn
10%
Barley
15%
Rye
6,4
0
Wheat
4,6
-0,9
5,1
2,2
-0,5
China
5%
2,9
India
-0,7
Source: FAPRI Agricultural Outlook 2007
Renewable Fuels Association 2007
-10
6
World Total Market
World Biodiesel Market
(Billion Liter per Year)
Production/ Consumption
2006
2016
22.4
32.8
60
Billion Liter per Year
2006
2016
50
40
27,8
30
20,8
20
10
1,7
1,5
0
USA
3,3
0,1
Brazil
Brazil's projections in accordance with federal law 11.097/05
EU 25
Sources: PDE-EPE (2007)
FAPRI Agricultural Outlook 2007
7
Summary
World Biofuel Market „
Motivation for Biofuels „
Biofuel Market Growth „
Brazilian Outlook „
World Biofuel Challenges „
8
Motivations for Biofuels
Energy Security
(reducing dependence on oil)
Sustainable Social Inclusion
Promote renewable energy production
reducing GHG emissions
9
Greenhouse gas emission by sector - World
Greenhouse Gas Emission by Sector
(percentage)
Agriculture; 13,5
Waste; 3,6
Transportation;
13,6
Land Use Change;
18,2
Eletricity and Heat;
24,6
Industrial
Processes; 3,4
Fugitive
Em issions; 3,9
Industry; 10,4
Other fuel
com bustion; 9
10
Sugar-cane Potential to
Avoided Gas Emissions
(ton COequiv/Ha.year)
Abatement of 640 million ton of CO2 equivalent as result
of Brazilian Ethanol Program
11
Summary
World Biofuel Market „
Motivation for Biofuels „
Biofuel Market Growth „
Brazilian Outlook „
World Biofuel Challenges „
12
Outlook of Biofuels in the USA
EIA 2007, EIA 2006, EPAct 2005 and H.R.6
90
80
79,5
70
68,1
Billion liters
60
50
45,4
40
47,7
54,5
56,8
49,5
39,7
42,6
32,2
30
20
50,0
52,2
28,4
26,5
20,9
10
0
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Year
EIA 2007
EIA 2006
EPAct 2005
H.R.6i
This Bill (H.R.6) is on the Congress and probably will be
the new standard for biofuels on the USA.
13
Outlook of Biofuels in the EU
Europe Union - 10% of Biofuel on 2020
35
28,53 30,43
30
26,63
Billion Liters
25
22,84
24,74
20,94
20
15
17,15
19,04
15,25
13,35
10
5
0
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Year
14
Summary
World Biofuel Market „
Motivation for Biofuels „
Biofuel Market Growth „
Brazilian Outlook „
World Biofuel Challenges „
15
Brazilian Energy Matrix
2006 Domestic Energy Supply Structure
Total: 230 millions of toe
Other renewables
Sugar-cane and
by-products
Oil and by-products
15.9%
38.6%
13.7%
14.9%
Hydraulic and
Electricity
9.4%
6.4%
1.2%
Uranium
Coal
Natural Gas
Source: Brazilian Energy Balance, EPE, 2007
16
Renewable Matrix Comparison
Domestic Energy Supply Structure
OECD Countries
6,0
(2004)
World (2004)
13,3
Brazil (2006)
Renewables
94,0
86,7
44,5
0%
20%
55,5
40%
60%
80%
100%
Non-renewables
Source: Brazilian Energy Balance, EPE, 2007
Key World Energy Statistics, IEA, 2005
17
Two main issues affecting Brazil Ethanol
Market
Exports
FLEX FUEL
18
Light Vehicles Domestic Fleet
Forecasts for Light Vehicles Fleet in Brazil
Light Vehicles Domestic
Sales Percentage
Gasoline Ethanol
Flex
fuel
Diesel
1980
71%
27%
2%
1985
4%
92%
4%
1990
82%
12%
6%
1995
94%
2%
3%
2000
93%
1%
6%
2006
20%
76%
4%
2010
11%
85%
4%
2015
11%
85%
4%
Source: EPE, 2007;
ANFAVEA, 2007
Forecasts indicate more than
19 millions of flex fuel vehicles in Brazilian fleet in 2015
19
Brazil's Long Term Study 2030
Ethanol on 2030 Matrix
(million m³/year)
Ethanol Production
Ethanol Consumption
Ethanol Exportation
2006
17.8
14.4
3.4
2030
66.7
54.7
12.0
20
The Brazilian Biodiesel Production and Use Program
Stages of Brazilian Biodiesel Program
ªLaw n º 11,097/05
Set the mandatory blending of biodiesel with
mineral diesel and regulate the insertion of the
new fuel in the market.
2005
to
2007
2%
2008
to
2012
2%
2013 Forward
(Government may bring
the aim forward to 2010)
5%
Authorized
Mandatory
Mandatory
Potencial Market
840 millions
liters/year
Firm Market
1 billion
liters/year
Firm Market
2.4 billion
liters/year
21
Summary
World Biofuel Market „
Motivation for Biofuels „
Biofuel Market Growth „
Brazilian Outlook „
World Biofuel Challenges „
22
World Biofuel Challenges
Expand production protecting the Environment
Expand production avoiding
intersection on Food sector
Reduce
production costs
23
Reduce
production costs
Area Productivity
Source: O. Henniges and J. Zeddies, ”Economics of Bioethanol in the Asia-Pacific:
Australia-Thailand-China”, in F.O.Licht´s. World Ethanol and Biofuels, vol. 3, n. 11, 2005
Source: IEA (2005) and MTEC
24
Technological
Progress
Stages of Brazilian Ethanol Program
7,000
First
Steps
Consolidation
Stagnation
Redefinition
Current
Phase
80
70
Productivity
6,000
60
Saved area
5,000
50
4,000
40
3,000
Actual area
2,000
Productivity (tCana/ha)
8,000
30
20
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
Total area cultivated (thousand ha)
Productivity, Actual production area and Saved area
Crop-year
25
Expand production avoiding
intersection on Food sector
Sugar-cane Land use on 2030 Matrix
2006
Land Use (million ha)
6.2
Sugar-cane Production (million tone/year)
458
2030
13.9
1,140
26
Land Use in Brazil
(Dimensions and Soil Occupation)
106 ha
Amazon Forest Rain
and Protected Areas
405
Cities, Roads, Bodies
of Water and Others
20
Farming Production
Areas
366
210
Temporary and
Permanent Cultures
61
Cultivated Forests
5
Agro-frontier
90
BRAZIL
7.1%
24.7%
43.0%
7.2%
47.6%
0.6%
Pasturelands
Other Uses
2.4%
60
851
Source: SPAE/MAPA, 2006
10.6%
million ha
Total Sugar-cane
Sugar-cane for
Ethanol
2006
6,2
2030
13,9
3,1
8,3
27
Thanks
EMPRESA DE PESQUISA ENERGÉTICA - EPE
www.epe.gov.br
Av. Rio Branco, 1 – 11o andar
20090-003 Rio de Janeiro RJ
Tel.: + 55 (21) 3512 - 3100
Fax: + 55 (21) 3512 - 3199
28