International Seminar on Biofuels
African Union-Brazil-UNIDO
THE BRAZILIAN EXPERIENCE WITH ETHANOL
Addis Ababa – Ethiopia – July, 2007.
Ricardo de Gusmão Dornelles
Director – Renewable Fuels Department
Ministry of Mines and Energy
José Nilton de Souza Vieira
Deputy Director – Agro-Energy Department
Ministry of Agriculture, Livestock and Food Supply
Brazilian Ethanol Experience: Summary
1. Introduction: A Brief Energy Outlook
2. The Brazilian Ethanol Experience
3. Ethanol and the “Fuel, Food, Feed” Debate
4. Final Remarks
A BRIEF ENERGY OUTLOOK
WORLD ENERGY CONSUMPTION
Energy consumption - Per capita
Tonnes oil equivalent (toe)
Source: BP Statistical Review (June/2006)
WORLD ENERGY CONSUMPTION
The greater consumption per capita is outside the tropics!
Consumo de energia per capita
(em toneladas de óleo equivalente)
Cancer Tropic
Equator
Capricorn Tropic
Tropical Area
Biofuels
Source: BP Statistical Review (June/2006)
WORLD ENERGY CONTEXT
 World economy growth
 Demand growth
 High prices for energy
 Refining capacity in the limit
 Strong dependency on non-renewable energy sources
 Climate change reality
 Geopolitical instability and conflict at important energy
supplier countries
THE CHALLENGE FOR ENERGY POLICY
 Long term energy supply security
 Cheaper prices for energy sources
 Keeping the local energy competitiveness
 Dealing with climate change and environment
BIOFUELS
Biofuels Energy Policy: Main Objectives
To increase biofuels production and consumption
To protect the consumer best interests through regulation
mechanisms and surveillance from Regulatory Agencies and
to promote free competition
To promote a global market for biofuels
To protect the environment, regarding food security
Main Actions
To increase biofuels production and consumption
 Ethanol and Biodiesel Programs
To protect the consumer best interests through regulation
mechanisms and surveillance from Regulatory Agencies and
to promote free competition
 Solid regulatory framework, considering biofuels in fact as
fuels, not only as agriculture goods
To promote a global market for biofuels
 Compatible international specifications and standards and
promoting production in other countries
To protect the environment, regarding food security
 Social and Environmental Certificate
BRAZILIAN ENERGY MIX - 2006
Sugarcane
14.6%
Wood and other
Biomass
12.4%
Other Renewables
Sources
3.0%
RENEWABLE
SOURCES
44.8 %
Hydroelectricity
14.8%
Uranium
1.6%
%
Coal
6.0%
Natural Gas
9.6%
100
80
86
60
40
20
0
14
World
45
55
Brazil
RENEWABLE
NON-RENEWABLE
Petroleum and
Derivatives
37.9%
225.8
MILLION
TOE
Source: Brazilian Energy Balance (BEN,2007)
Ministry of Mines and Energy (MME)
CURRENT MATRIX OF VEHICLE FUELS - 2006
Diesel
48.9%
Diesel (Total)
48.9 + 54,5%
3.3 = (2005)
52.2%
54.5% (2005)

B2
3.3%
Gasoline A*
27.2%
0% (2005)
VNG
3.2%
25.6% (2005)
Anhydrous Ethanol
7.3%
Hydrated Ethanol
8.5% (2005)
Gasoline C
27.2 + 7.3 = 34.5%
34.1% (2005)
*
2.9% (2005)
9.9%
8.4% (2005)
Pure Gasoline – Before blending with ethanol
 Diesel blended with 2% of Biodiesel
Ethanol (Total)
7.3 + 9.9 = 17.2%
16.9% (2005)
Why ethanol?
 It is easy to be produced in large scale;
 It has competitive costs, compared to current oil prices;
 It can be produced from different raw materials;
 It is a way of promoting the economic development in rural areas;
 It has promising perspectives in the world market.
Why sugar cane?
 It allows the highest productivity (liters/hectare);
 It has exceptional thermal and environmental balances;
 It allows an increase in the competitiveness of the mills (flexibility,
higher quality and lower costs of sugar);
 It leads to an increase in agricultural yield (industrial residues
transformed in fertilizers).
Economic Agents of Sugar Cane Industry
Sugar Cane Agriculture Phase
 1.000.000 jobs in the countryside
Sugar and Alcohol Industrial Phase
 367 Industrial Plants
Regulatory Domain: Ministry of Agriculture
Regulatory Domain: Ministry of Mines and Energy / ANP (National Petroleum Agency)
Gas Stations
 92% of total gas stations in Brazil
have an ethanol pump.
 Free
Prices Market
Exporters
 3,42 Billion liters
exported in 2006
Fuel Distributors
 160 Operating Distributors
 Only distributors may blend
ethanol with motor gasoline
Source = MAPA – MME – MDIC - 2006
Ethanol in Brazil – Sugar Mills Location - 2007
NORTHEAST REGION
79 INDUSTRIAL UNITS:
 SUGAR MILLS
8
 ETHANOL PLANTS
19
 ETHANOL AND SUGAR
52
9% of the ethanol production
Operating Sugarcane Mills
SOUTH-CENTRE REGION
288 INDUSTRIAL UNITS:
 SUGAR MILLS
8
 ETHANOL PLANTS
59
 ETHANOL AND SUGAR 221
91% of the ethanol production
Source: Ministry of Mines and Energy – Ministry of Agriculture, Livestock and Food Supply - 2007
Sugarcane Mills under
construction
Production in 2006:
18 billion liters
 11% (2005)
Agricultural phase...
MAIN QUESTIONS:
 Soil conservation
 Soil chemistry
 Agrochemical inputs
 Expansion frontiers
 Harvest practices
 Labor
Vinasse
Vinasse production in ethanol plants:
10 ~ 15 liters of vinasse per liter of ethanol
Aerobic treatment
New Technology: development of biodigestion of vinasse
Use of vinasse to yield ferti-irrigation
Ferti-irrigation Using Vinasse
By Conventional Sprinklers or...
“Canal + Big Guns”
Source: Centro de Tecnologcia Canavieira - CTC
Ferti-irrigation Using Vinasse
By Canal & Hard Hose or...
Trucks & Hard Hose
Source: Centro de Tecnologcia Canavieira - CTC
The Industrial phase...
MAIN QUESTIONS:
 The usage of the water;
 Indirect usage of the residues;
 Energy generation using crop residues;
 New technologies;
BAGASSE (SOLID RESIDUE)
 Carbon market (Kyoto Protocol).
VINASSES (LIQUID RESIDUE)
FILTER RESIDUE
Water Uses in Ethanol Plants
Estimated mean end use of 21 m3/tons of sugar cane
(mills having annexed distillery)
Others Uses
13%
Fermentation
Cooling
14%
Alcohol
Condensers
Cooling
19%
Source: Centro de Tecnologia Canavieira - CTC
Condensers /
Multijets
29%
Sugar Cane
Washing
25%
Water Consumption in Ethanol Plants
 In spite of the high mean end use, volumes of water
collection has been decreasing, as a result of
rationalizing of water consumption: reuses, circuit
closing, reduction of sugar cane washing and other
process changes.
Uses (m3 / tons of sugar cane)
Collection
1990
5,60
Source: Elia Neto, A. Captação e uso de água no processamento da cana-de-açúcar in: Macedo I.C.et al
A Energia da Cana-de-Açúcar UNICA, SP, 2005
1997
5,07
2005
1,83
Water Consumption in Ethanol Plants
TRADITIONAL
PROCESS: SUGAR
CANE WASHING
NEW TECHNOLOGY:
DRY CLEANING
REDUCES WATER
CONSUMPTION
Main Goals of Water Use in Ethanol Plants
 Collection........................................1,0 m3/ton of sugar cane
 Mean Consumption........................1,0 m3/ton of sugar cane
 Effluent released (BOD, COD)....... zero
STRATEGIES:
• Rational use (non treated water and water used in
process)
• Reuse of treated effluents and water used in process
• Self-monitoring of quality and quantity of water
collected, used and released
• Prevent controls of pollution
Source: Elia Neto, A. Captação e uso de água no processamento da cana-de-açúcar in: Macedo I.C.et al
A Energia da Cana-de-Açúcar UNICA, SP, 2005
Energy Cogeneration Using Bagasse
CANE BAGASSE + HIGH EFFICIENCY BOILER + TURBO GENERATOR
ENERGY: AUTO SUFFICENCY
AND EXCEDENTS TO EXPORT
Center-South Region Crops Location – 2005/2006
Amazon Forest
More than
1,300 miles far from
the Amazon Forest boundaries
Pantanal
A Region that
grows sugarcane
crops for more
than 30 years
Sugarcane Crops
CANASAT Project
Atlantic Forest of Brazil
Source: IBGE (Preservation Areas) and CTC (Sugarcane Crops)
Potential areas for sugar cane in Brazil
Without irrigation systems
Production potential without irrigation
AREA
POTENTIAL
Million hectares
HIGH
8
MEDIUM
114
LOW
149
IMPROPER
91
TOTAL
362
With irrigation systems
Production potential with irrigation
%
2
32
41
25
100
POTENTIAL
HIGH
MEDIUM
LOW
IMPROPER
TOTAL
AREA
Million hectares
38
98
168
58
362
%
11
27
46
16
100
Source: MCT - CGEE - Unicamp / initial results
Ethanol in Brazil: Oil economy and environmental benefits
6
10 BEP
FUEL DEMAND FOR LIGHT VEHICLES IN BRAZIL
180
+ US$ 61
billions
160
140
Total
economy
ofmuch
813gasoline
millions
boe
This curve
shows how
Accumulated
economy
of 8would
years
to satisfy
fuel demand
for
or be
16necessary
months
of thethepresent
Brazilian
of pure gasoline
national
consumption.
light vehicles.
petroleum
production.
120
100
80
60
40
20
0
1970
IN THIS PERIOD, WITH THE ETHANOL USAGE, THE EMISSION
TONNES
OF
1974 OF 675
1978 MILLION
1982
1986
1990CO2 WAS
1994 AVOIDED
1998
2002
2006
YEAR
TOTAL DEMAND FOR LIGHT VEHICLES (GNV INCLUDED)
TOTAL DEMAND FOR LIGHT VEHICLES (WITHOUT GNV)
GASOLINE PRODUCTION
GASOLINE CONSUMPTION
Source: Ministry of Mines and Energy - Brazilian Energy Balance – 2006
and Laura Tetti – USP – 2002
Incentives established by the Pro-Alcohol in 1975
 Alcohol price lower than gasoline price
 Guaranteed remuneration to the producer
 Tax reduction for hydrous alcohol cars
The only remaining
incentive nowadays
 Loans for alcohol producers to increase their
capacity
 Gas stations were obligated to sell alcohol
 Maintenance of strategical alcohol stocks
2006: Total FFV – a Brazilian reality
 Any mixture of gasoline and ethanol can be used, from 0 to 100%;
 In 2006: The domestic flex-fuel vehicle sales represented 78% of all 1,824,266 light
vehicles sold in the same period (imports included);
 Total domestic flex-fuel vehicle sales (2003-2006): 2.67 million units)
9 multinational automotive manufacturers settled in Brazil
are producing nearly 100 different models of Total FFV
Source: Ministry of Development, Industry and Foreign Trade;
Brazilian Association of Automotive Vehicle Manufacturers - 2007
FINAL REMARKS
GLOBAL CHALLENGE
ENERGY PRODUCTION
X
AND
FOOD PRODUCTION
BRAZIL CHALLENGE
Energy and Food Production
In millions of hectares
AREA
(EXTENSION)
PERCENTAGE
BRAZIL (TOTAL)
851
100%
ARABLE AREA
383
45%
PASTURES
210
25%
AVAILABLE FOR
EXPANSION
91
SUGARCANE AREA
FOR ETHANOL
3
OILSEED CROPS FOR
B2 and B5
1,7 to 4,0
(55% of arable area)
11%
(24% of arable area)
0,35%
(0,8% of arable area)
0,2 a 0,47%
(0,4% to 1% of arable
area)
EVOLUTION OF ETHANOL PRODUCTIVITY
SUGARCANE PRODUCTIVITY
(tonnes of sugarcane / ha)
ETHANOL PRODUCTIVITY
(liters / tonnes of sugarcane)
80
90
70
60
80
70
50
40
30
20
10
0
74
62
60
50
47
86
69
74
1975
1990
40
30
1975
1990
2005
6
World Average = 69 t/ha
Sugarcane Production 2006 = 457 10 t
33% of the world production
7
ETHANOL PRODUCTIVITY
(m³ / ha)
6
5
4
3
2
4,6
6,6
3,2
1
0
1975
1990
2005
2005
8.000
80
7.000
70
productivity
Prod Média
6.000
preserved
Área Poupada
area
60
5.000
50
4.000
40
3.000
Área
Colhida area
cropped
20
77
/7
8
79
/8
0
81
/8
2
83
/8
4
85
/8
6
87
/8
8
89
/9
0
91
/9
2
93
/9
4
95
/9
6
97
/9
8
99
/0
0
01
/0
2
03
/0
4
2.000
Safras Agrícolas
Source: CIMA
30
1 ton of sugarcane = 80 liters of alcohol
1 hectare of sugarcane = 6 m3 of alcohol
Produtvidade
(t/ha)
(tons/hectares)
Productivity
hectares)
( thousand
AreaÁrea
Total (1000
ha)
Sugarcane: Cropped and Preserved Areas due to
Technological
Improvements
Área de Produção
Real e Área Poupada
pela Introdução de Tecnologia
Some basic statements:
 Energy supply is a great challenge to all the Developing
Countries and reducing the oil dependence is a need for most of
them;
 Biofuels can be important to address this problem and it can
contribute to reduce food security problems;
 Brazil is the lowest cost producer of sugar and ethanol from sugar
cane, but we can observe high sugar cane yields in several other
countries;
 Other countries, which are able to grow sugar cane
competitively, could also become low cost producers of sugar
and ethanol;
 It is possible to combine agricultural aptitude with high
technology and management in other countries, besides Brazil.
How to start a program of ethanol production?
 Identifying potential areas (available raw material);
 Considering technical and economic questions;
 Developing a local basic equipments industry (or having
appropriate technical support);
 Finding the technologies more appropriated to each case (specially
in terms of scale);
 Investing in the best projects;
CONCLUSION
 Ethanol can be an excellent business for tropical countries,
especially for the traditional sugar cane producers;
 Producing and blending ethanol with gasoline are simple tasks, if
all the process is carefully planned;
 Brazil learned with its own mistakes. Other countries don’t have to
do the same;
 Brazil is interested in sharing its experience because it needs the
help of other suppliers to organize the international market.
CONCLUSION
How can we help?
 Information on sugar cane breeding and varieties development:
CTC, IAC and RIDESA;
 Technical support for sugar cane production:
ORPLANA, CANAOESTE and other consultants.
 Technical packages for industrial production: APEX and FIESP;
 Financing of equipment by Brazilian exporters by:
BNDES – Brazilian development bank (Libor + 2%, 12-year loan).
CONCLUSION
 Biofuels do contribute to:
 Energy security;
 Improvement of environment conditions in urban areas;
 Creation of jobs and income in rural areas;
 Economic development.
 However, in order to achieve this reality, it is required:
 Governmental decision with adequate public policies
 Global efforts towards creation of biofuels international market
Governmental policies do exert strong influence on climate for
investment because they can produce immediate impacts over
costs, risks and barriers to competition.
THANK YOU!