BIOENERGY IN BRAZIL: BIOENERGY IN BRAZIL: OPPORTUNITY FOR - - PowerPoint PPT Presentation

BIOENERGY IN BRAZIL: BIOENERGY IN BRAZIL: OPPORTUNITY FOR INVESTMENTS OPPORTUNITY FOR INVESTMENTS

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• JAPAN

JAPAN JAPAN / March, 2007 JAPAN / March, 2007

MINISTRY OF AGRICULTURE, LIVESTOCK AND FOOD SUPPLY Secretary of Production and Agroenergy

LINNEU CARLOS DA COSTA LIMA Secretary of Production and Agroenergy

BRAZIL HAS A GREAT POTENTIAL FOR BIOFUELS PRODUCTION... BRAZIL HAS A GREAT POTENTIAL FOR BIOFUELS PRODUCTION...

30O 30O 0O 30O 30O 0O

...LEADING TO A RENEWABLE ENERGY MIX ...LEADING TO A RENEWABLE ENERGY MIX

WORLD ENERGY MIX BRAZILIAN ENERGY MIX

Source: MME/BEN, 2006

Biomass; 29,7% Coal; 6,4% Natural gas; 9,3% Hydraulic and Electricity; 15,0% Oil and Oil Products; 38,4% Uraniun; 1,2% Biomass; 11,2% Coal; 24,1% Natural gas; 20,9% Hydraulic and Electricity; 2,1% Oil and Oil Products; 35,3% Uraniun; 6,4%

Share of renewable energy in the total primary energy: 45% Share of renewable energy in the power generation: 85%

THE NATIONAL AGROENERGY PLAN

• ETHANOL
• BIODIESEL
• AGRICULTURE WASTES
• ENERGETIC FORESTS

BIODIESEL: A PRODUCT FOR THE FUTURE

Source: MAPA/Embrapa

Sunflower Peanut Cotton seed Castor Soybean Palm Tree

Biodiesel mixed with diesel 2005-2007: 2% authorized 2008-2012: 2% mandatory 2013...: 5% mandatory

THE BRAZILIAN SUGAR CANE AND THE BRAZILIAN SUGAR CANE AND

ETHANOL ETHANOL EXPERIENCES

EXPERIENCES

1532: Martim Afonso de Sousa 1532: Martim Afonso de Sousa introduces introduces sugar sugar cane cane in in Brazil Brazil 1925: 1925: First First ethanol ethanol powered powered vehicle vehicle tested tested in in Brazil Brazil 1979: 1979: First First commercial commercial ethanol ethanol moved moved vehicle vehicle in in Brazil Brazil 2003: 2003: Flex Flex fuel fuel motors motors are are launched launched

1975 - Proálcool

WHY ETHANOL? WHY ETHANOL?

• Clean

Clean, , green green and and renewable renewable energy energy; ;

• Safe

Safe and and efficcient efficcient; ;

• Easy

Easy to to produce produce in in large large scale scale; ;

• Generate

Generate new new jobs jobs, , specially specially in in the the rural rural area area; ;

• Easy

Easy to to introduce introduce in in the the consumer consumer market market ( (pure pure or

• r mixed

mixed with with gasoline gasoline); );

• Sugar

Sugar cane cane has has high high productivity productivity and and low low environmental environmental impacts impacts; ;

• Relatively

Relatively low low production production costs costs (~ US$ 0,30/L at (~ US$ 0,30/L at the the mill mill, , without without taxes); taxes);

• The

The sugar sugar cane cane “ “wastes wastes” are ” are important important products products; ;

• Low

Low consumption consumption of

• f external

external energy energy in in the the production production process process. .

THE MAIN SUGAR CANE BY THE MAIN SUGAR CANE BY-

• PRODUCTS

PRODUCTS

BAGASSE ( (solid solid industrial industrial waste waste): ): BURNED IN BOILERS TO PRODUCE ENERGY VINASSES or STILLAGE VINASSES or STILLAGE (liquid industrial waste) USED AS A FERTILIZER IN THE SUGAR CANE FIELDS

THE FLEX FUEL CAR THE FLEX FUEL CAR – – A NEW DOMESTIC ETHANOL DEMAND A NEW DOMESTIC ETHANOL DEMAND

• Flex-Fuel Engine: allows the use of ethanol or gasoline in

any concentration of these fuels

• Current Manufactures: VW,GM, Ford, Fiat, Renault,

Peugeot, Citröen and Honda

• Sales of Flex-Fuel Vehicles in Brazil:
• 2003: 48.000 units
• 2004: 330.000 units
• 2005: 865.000 units
• 2006: 1.447.000 units

More than 80% of the new light-duty vehicle sales in Brazil are flex fuel.

YEARS Million US$ F.O.B. Liters (Billion) Average US$/m³ 1997 54 0,146 370,09 1998 36 0,118 301,21 1999 66 0,407 161,70 2000 35 0,227 153,07 2001 92 0,346 266,57 2002 169 0,759 222,86 2003 158 0,757 208,56 2004 498 2,408 206,68 2005 766 2,592 295,31 2006 1605 3,428 468,20

Source: Secex (Alice System)

THE ETHANOL INTERNATIONAL DEMAND IS INCREASING THE ETHANOL INTERNATIONAL DEMAND IS INCREASING

And so are the Brazilian exports...

The Brazilian aim is to transform ethanol in a great commodity, together with other countries

SLOPE > 12%

AMAZON REGION ATLANTIC FOREST TOTAL AREA WITHOUT ENVIRONMENTAL RESTRICTIONS . . . . . . . . . . . . 437,2 MM hectares AREA WITH SLOPE ABOVE 12% . . . . . . . . . . . . . . 75,6 MM hectares TOTAL AVAILABLE AND SUITABLE LAND . . . . . . . . . . 361,6MM hectares PANTANAL (SWAMPLAND)

SLOPE > 12% SLOPE < 12%

HOW TO EXPAND SUGAR CANE WITH SUSTAINABILITY?

AREAS FOR EXPANSION

Current plants: 360 mills Forecast for 2010: + 77 mills

DOES BRAZIL HAVE THE CONDITIONS TO EXPAND DOES BRAZIL HAVE THE CONDITIONS TO EXPAND ITS SUGAR CANE PRODUCTION WITH SUSTAINABILITY? ITS SUGAR CANE PRODUCTION WITH SUSTAINABILITY?

New areas of sugar cane necessary to supply the external sugar and internal ethanol demand foresighted for 2013: ~ 3 million hectares TOTAL SUGAR CANE CULTIVATED AREA IN BRAZIL TODAY: ~ 6 million hectares (less than 1% of the Brazilian territory)

MAIN ASPECTS TO BE ADDRESSED:

• Definition of a regulatory framework, with clear investment rules;
• Definition of a tax system;
• Planning of economic viability and product supply guarantee;
• Infra-structure and logistics investment;
• Marketing plan;
• Technological development.

HOW TO START AN ETHANOL MIXTURE PROGRAM?

THESE ARE ONLY A FEW TIPS FROM THE BRAZILAN EXPERIENCE, BUT EACH COUNTRY HAS TO DESIGN ITS ON MODEL.

HOW TO INVEST IN THE ETHANOL SECTOR IN BRAZIL?

• The ethanol sector in Brazil is catching the attention of many investors worldwide
• Some international groups already have invested in this sector in Brazil
• Usually these investments are made together with Brazilian groups with expertise

in the ethanol sector

• There are some institutions in Brazil who are able to give guidance for foreign

investors such as: The National Investment Information Network - RENAI http://sistemasweb.desenvolvimento.gov.br/investimento_web/renai_en/index.asp Trade and Investment Promotion Agency – APEX http://www.apexbrasil.com.br/eng/ Trade and Investmet Information Net - BrazilTradeNet http://www.braziltradenet.gov.br/

LAST COMMENTS…

• The transition from the oil era to the renewable energies may take time and

demand a lot of different sources and technologies, such as: hydrogen, solar, wind power etc. However ethanol is an already viable and competitive fuel.

• Bioenergy contributes to reduce poverty and improve the democratic access
• f energy in the world. Brazil has a historical opportunity to be a great biofuel

and clean technology exporter together with other countries.

• Biorefinery concept: ethanol and sugar to chemical

uses; power generation; fertilizers; ethanol from lignocelluloses hydrolysis; etc.

• Bioenergy also contributes to the sustainable

development and to avoid the global climate change.

THANK YOU! THANK YOU! OBRIGADO! OBRIGADO!

LINNEU CARLOS DA COSTA LIMA + 55 61 3218-2147 / 3218-2945 daa@agricultura.gov.br www.agricultura.gov.br

BRAZILIAN ETHANOL PRODUCTION

5,000 10,000 15,000 20,000 25,000 30,000 6 4 / 6 5 6 6 / 6 7 6 8 / 6 9 7 / 7 1 7 2 / 7 3 7 4 / 7 5 7 6 / 7 7 7 8 / 7 9 8 / 8 1 8 2 / 8 3 8 4 / 8 5 8 6 / 8 7 8 8 / 8 9 9 / 9 1 9 2 / 9 3 9 4 / 9 5 9 6 / 9 7 9 8 / 9 9 / 1 2 / 3 4 / 5 6 / 7 8 / 9 1 / 1 1 1 2 / 1 3

Million liters

1st Stage: sugar cane destined

• nly for sugar

2nd Stage: hydrous ethanol. Governmental intervention on the market. 3rd Stage: anhydrous ethanol. High sugar exports. Oil prices stabilized 4th Stage: free market. Flex fuel vehicles. High international sugar and ethanol demands. Top oil prices. GHG emission targets.

Oil crisis PROÁLCOOL Kyoto Protocol

hydrous anhydrous total