Biofuels in Brazil
The Ethanol Experience
Paulo C. R. Lima, M.Sc., Ph.D.
Energy Consultant for Brazilian Congress
Main biofuels in Brazil
> Ethanol (present and future)
> Biodiesel (future)
> Sugarcane bagasse
> Charcoal
Brazil´s potential
Millions of
hectares
Brazil´s area
Total area for agriculture
Cultivated area – all crops
with sugar cane
for ethanol
Source: Ministério da Agricultura, Pecuária e Abastecimento
~ 850,00
320,00
60,40
5,34
2,66
Fonte: Carvalho L. C. C - 2005
Cultivated area: 5.5 million ha
It could be 20 times greater
Ethanol in Brazil
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Proálcool: world´s greatest program
Started in 1975
The addition of ethanol increases the octane
number
Additive that replaces Methyl Tertiary Butyl Ether
(MTBE) and Ethyl Tertiary Butyl Ether (ETBE)
More than 3 million flex-fuel vehicles (ethanol,
gasoline or any mixture of them)
Gasoline with 20% a 25% of anhydrous ethanol
Ethanol is competitive
Sugarcane
production and
key facts
Ethanol
export
Flex-Fuel
Vehicles
Law nº 8.723,
1993 (22%+/2% e 1%
allowance)
350
PROÁLCOOL
440
383
303
(1.000.000 t)
263
149
91
1975
1980
1990
1995
2003
2004
Source: UNICA – União da Indústria Canavieira do Estado de São Paulo
2005
Ethanol production
2006: 17 million cubic meters
14,37
12,59
15,4
13,87
14,72
13,02
1.000.000 m3
10,59
Source: UNICA
11,54
12,62
15,28
Ethanol market
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Brazil:
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13,2% of total energy consumption in road transport
sector;
40,4% of total fuel consumption for Otto Cycle vehicles
(it was 56,9% in 1988).
USA: ethanol represents just 2,5% of total fuel
consumption of Otto Cycle vehicles.
Source: Nastari, P. M. - 2005
IMPACTS OF ETHANOL PRODUCTION
Social
70.000
farmers
395
distilleries
1million
people
Environment
16 million cars powered by More than 1
gasoline with 25% ethanol million flex
addition
fuel cars
3,0 million cars
powered by hydrated
ethanol
From 1992 to 2003, the jobs on sugarcane
crop has reduced by 33%, according to
PNAD (Pesquisa Nacional de Amostras
Domiciliares)
SUGARCANE
Productivity improvement (Center-South)
(ton per hectare-year)
80
53
1977
Source: Amorim e Lopes - 2005
2003
ETHANOL
Increase of productivity (Center-South)
7000
liters/ha-year
6500
6550
6000
5500
5300
5000
4500
4200
4000
1980
Source: UNICA
1986/1988
2004
Learning curve
Ethanol price at distillery
Gasoline price at refinery
Source: Goldemberg,J. & Macedo,I., 2005
Ethanol production costs
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Production cost: US$0.18–0.25 per liter
 Average export price in 2003: US$ 0.23 per liter
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New plants
 Processing capacity: 2.1 million tons of sugarcane per year
 Production capacity: 430 m3/day
 Capital cost: US$ 60 million
 Raw material cost: US$ 0.143 per liter of ethanol
 Capital cost: US$ 0.017 per liter of ethanol
Source: Nastari, P. M. - 2005
NEW DISTILLERIES
New plants
(around 50)
Energy balance of ethanol production
energy output/input ratio
12
10
8
6
4
2
0
Sugarcane
Sugar beet
Wheat straw
ethanol feedstock
Corn
Wood
ELECTRICAL ENERGY – Installed Power
(sugarcane bagasse)
(MW)
Electricity
consumption
for
sugar and ethanol processing
Power capacity connected to
the national grid
Short term potential
Medium term potential
Source: Aneel/Unica
Cogeneration potential
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Plants can generate 80 kWh/sugarcane ton in excess (low
pressure systems)
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Investment can be recovered in 3 to 4 years
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Cogeneration can have an important impact on income of
ethanol producers (25-28%)
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Sugarcane bagasse, stem tips and leaves can provide
great amount of energy
Fonte: Nastari, P. M. - 2005
Perspectives for ethanol in developing countries
BIODIESEL
Brazil has 90 million
hectares available
for producing oil
crops.
Law nº 11.097 / 2005
- Introduces biodiesel into the Brazilian energy
matrix
- 2% has to be added to diesel in 3 years
(by January 2008) - 800 million liters
- 5% has to be added in 8 years (by January
2013) - 2 billion liters
- Oil and gas royalties can be used to finance
biofuels R&D projects
Law 11.116 / 2005
- Special monophase regime for federal taxation (PIS/PASEP
and COFINS)
- Biodiesel producers has to be authorized by ANP (National
Agency for Oil, Gas and Biofuels)
- Special record at Secretaria da Receita Federal (Ministry of
Finances)
Decree nº 5.297
- Defines the value of PIS/PASEP and COFINS
- Creates the “Social Fuel Stamp”
Source: Gomide, R. B. - 2006
Social Fuel Stamp – IN 01 / 2005
Ministério do Desenvolvimento Agrário - MDA
Requirement for concession:
• Buying of raw material of family farming
• 50% NE
• 10% North and CW
• 30% SE and South
• Formal contracting
• Technical assistance and training
Resolution nº 3 / 2005
Conselho Nacional de Política Energética - CNPE
- Public auctions to anticipate the 2% goal. Raw material from family farming and
“Social Fuel Stamp”
Portaria nº 483 / 2005
Ministério de Minas e Energia - MME
- Guidelines for public auctions to be executed by Oil, Gas and Biofuel National
Agency
Resolution nº 31 / 2005
Agência Nacional do Petróleo, Gás Natural e
Biocombustíveis - ANP
Auction Bidding nº 061 / 2005
Auction Bidding nº 007 / 2006
Agência Nacional do Petróleo, Gás Natural e
Biocombustíveis - ANP
1º Auction
2º Auction
3º and 4º Auctions
Agência Nacional do Petróleo, Gás Natural e
Biocombustíveis - ANP
- Estimated volume: 850 million liters to fill 2%
- Brazil’s diesel consumption is near 40 billion liters
BIODIESEL PLANTS
Source: Gomide, R. B. - 2006
CONCLUSION
- Brazil has a great potential for biofuel production but a small
potential to promote citizenship
- Biofuels legal framework is confusing and inconsistent
- Ethanol and biodiesel are subject to different public policies
- Ethanol can be treated as “social fuel” like biodiesel
- The Brazilian legislation does not define any incentive for
cooperativism and small distilleries or production units
- Family farming depends on industrial producers
Tributos Federais: Decretos nº 5.297/04 e 5.457/05
Biodiesel
Tributos
federais
Agricultura
Familiar no
Norte, NE e
Semi-árido com
mamona ou
palma
IPI
Diesel
de
Petróleo
Agricultura
Familiar
Norte, NE e
Semi-árido
com
mamona ou
palma
Regra Geral
Alíquota Zero
Alíquota
Zero
Alíquota
Zero
Alíquota
Zero
Alíquota
Zero
CIDE
Inexistente
Inexistente
Inexistente
Inexistente
R$ 0,070
PIS/COFINS
Redução de
100%
Redução de
68%
Redução de
31%
= diesel
mineral
R$ 0,148
R$/litro
R$/litro
R$/litro
R$/litro
R$/litro
R$ 0,00
R$ 0,070
R$ 0,151
R$ 0,218
R$ 0,218
Total tributos
federais
Matriz Energética Brasileira
Recursos
Renováveis
43.6%
Biomassa
29.1%
Hidreletricidade
14.5%
Urânio (U 3 O 2 )
1.5%
Carvão Mineral
6.5%
Gás Natural
8.7%
Petróleo e
Derivados
39.7%
BIODIESEL
Áreas não exploradas
de 90 milhões de ha
estão disponíveis para
produção de grãos no
Brasil
Matriz de Energia Elétrica
Empreendimentos em Operação
Capacidade Instalada
Total
Tipo
%
%
N.° de
N.° de
(kW)
(kW)
Usinas
Usinas
Hidro
604 71.549.721 70,13
604 71.549.72170,13
Natural
72 9.886.953 9,69
Gás
98 10.812.70110,60
Processo
26
925.748 0,91
Óleo Diesel
520 3.565.994 3,50
Petróleo
538 4.729.964 4,64
Óleo
18 1.163.970 1,14
Residual
Bagaço de
222 2.290.250 2,24
Cana
Licor Negro
13
782.617 0,77
Biomassa Madeira
25
212.832 0,21
264 3.312.129 3,25
Biogás
2
20.030 0,02
Casca de
2
6.400 0,01
Arroz
Nuclear
2 2.007.000 1,97
2 2.007.000 1,97
Carvão
Carvão
7 1.415.000 1,39
7 1.415.000 1,39
Mineral
Mineral
Eólica
10
28.550 0,03
10
28.550 0,03
Paraguai
5.650.000 2,33
Argentina
2.250.000 5,85
Importação
8.170.000 8,01
Venezuela
200.000 0,08
Uruguai
70.000 0,20
Total
1.523 102.025.065 100
1.523 102.025.065 100
Produção de Energia Primária 106 tep
CARVÃO MINERAL
2,15
PETRÓLEO
76,84
GÁS NATURAL
16,85
URÂNIO
3,57
HIDRÁULICA
27,59
BIOMASSA
63,40
CARVÃO MINERAL
PETRÓLEO
GÁS NATURAL
URÂNIO
HIDRÁULICA
BIOMASSA
Miscellaneous thoughts/quotes/notes…
addendum by James Page
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“There is a required trade-off between energy and
food production. With half of the world hungry, this
is not a good idea at all.”
The “green revolution” began in the ’70s. It’s taken
30 years to take off.
Q: “What’s the better alternative? Nuclear? With
all the risks? Or do we continue to flatten pristine
environments of the Amazon?”
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A: “We need technology to change this and increase
yields and product in traditional areas where markets
function better.”
Cont’d
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Improvements in this technology will lead to
300,000 of Brazil’s poorest losing their jobs
by 2014.
“There is no way for Brazil to use renewable
energy…costs are way too high.”
17 Nov 2005
Nastari / Datagro @ NIPE Unicamp
37
“The Amazon is the world’s
air conditioning system.”
“The free market will lead us to the
end.”
“The world is watching the United States
and waiting for a change on their position
on the omission of the gases with regard
to global warming…
…of course, I’m not a defender of Mr.
Bush, but the United States has great
technological capability and we are going
to need this.”
Citation for Addendum
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Brazilian Chamber of Deputies. Personal
Interviews and Presentation. July 2007.
17 Nov 2005
Nastari / Datagro @ NIPE Unicamp
40