in Biofuels 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
Brazils potential
Millions of hectares
Brazils area Total area for agriculture Cultivated area all crops with sugar cane for ethanol
~ 850,00 320,00 60,40 5,34 2,66
Source: Ministrio da Agricultura, Pecuria e Abastecimento
Fonte: Carvalho L. C. C - 2005
Cultivated area: 5.5 million ha It could be 20 times greater
Ethanol in Brazil
Prolcool: worlds 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
Flex-Fuel Vehicles Law n 8.723, 1993 (22%+/2% e 1% allowance)
350 303 383
Ethanol export
440
PROLCOOL
263
(1.000.000 t)
149 91
1975
1980
1990
1995
2003
2004
2005
Source: UNICA Unio da Indstria Canavieira do Estado de So Paulo
Ethanol production
2006: 17 million cubic meters
14,37 12,59
15,4 13,87 13,02 10,59 11,54 12,62
14,72
15,28
4 3 2 1 0 9 8 7 6 5 00 00 00 00 00 99 99 99 99 00 2 2 2 2 2 1 1 1 1 /2 3/ 2/ 1/ 0/ 9/ 8/ 7/ 6/ 5/ 0 0 0 0 9 9 9 9 9 04 20 20 20 20 19 19 19 19 19 20
1.000.000 m3
Source: UNICA
Ethanol market
Brazil:
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 6500 liters/ha-year 6000 5500 5000 4500
4200 5300 6550
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
Production cost: US$0.180.25 per liter Average export price in 2003: US$ 0.23 per liter 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
(around 50)
New plants
Energy balance of ethanol production
12 10 8 6 4 2 0
Sugarcane Sugar beet Wheat straw Corn Wood
energy output/input ratio
ethanol feedstock
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
Plants can generate 80 kWh/sugarcane ton in excess (low pressure systems) Investment can be recovered in 3 to 4 years Cogeneration can have an important impact on income of ethanol producers (25-28%) 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 n 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 n 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
Ministrio do Desenvolvimento Agrrio - MDA Requirement for concession: Buying of raw material family of farming 50% NE 10% North and CW 30% SE and South Formal contracting Technical assistance and training
Resolution n 3 / 2005
Conselho Nacional de Poltica Energtica - CNPE
- Public auctions to anticipate the 2% goal. Raw material from family farming and "Social Fuel Stamp"
Portaria n 483 / 2005
Ministrio de Minas e Energia - MME
- Guidelines for public auctions to be executed by Oil, Gas and Biofuel National Agency
Resolution n 31 / 2005
Agncia Nacional do Petrleo, Gs Natural e Biocombustveis - ANP
Auction Bidding n 061 / 2005 Auction Bidding n 007 / 2006
Agncia Nacional do Petrleo, Gs Natural e Biocombustveis - ANP
1 Auction
2 Auction
3 and 4 Auctions
Agncia Nacional do Petrleo, Gs Natural e Biocombustveis - 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 n 5.297/04 e 5.457/05
Biodiesel
Tributos federais
Agricultura Familiar no Norte, NE e Semi-rido com mamona ou palma Agricultura Familiar Norte, NE e Semi-rido com mamona ou palma Regra Geral
Diesel de Petrleo
IPI CIDE PIS/COFINS
Alquota Zero Inexistente Reduo de 100%
Alquota Zero Inexistente Reduo de 68%
Alquota Zero Inexistente Reduo de 31%
Alquota Zero Inexistente = diesel mineral
Alquota Zero R$ 0,070 R$ 0,148
Total tributos federais
R$/litro R$ 0,00
R$/litro R$ 0,070
R$/litro R$ 0,151
R$/litro R$ 0,218
R$/litro R$ 0,218
Matriz Energtica Brasileira
Recursos Renovveis 43.6%
Biomassa 29.1%
Hidreletricidade 14.5%
Urnio (U 3 O 2 ) 1.5% Carvo Mineral 6.5% Gs Natural 8.7% Petrleo e Derivados 39.7%
BIODIESEL
reas no exploradas de 90 milhes de ha esto disponveis para produo de gros no Brasil
Matriz de Energia Eltrica
Empreendimentos em Operao 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 Gs 98 10.812.70110,60 Processo 26 925.748 0,91 leo Diesel 520 3.565.994 3,50 Petrleo 538 4.729.964 4,64 leo 18 1.163.970 1,14 Residual Bagao de 222 2.290.250 2,24 Cana Licor Negro 13 782.617 0,77 Biomassa Madeira 264 3.312.129 3,25 25 212.832 0,21 Biogs 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 Carvo Carvo 7 1.415.000 1,39 7 1.415.000 1,39 Mineral Mineral Elica 10 28.550 0,03 10 28.550 0,03 Paraguai 5.650.000 2,33 Argentina 2.250.000 5,85 Importao 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
Produo de Energia Primria 106 tep
CARVO MINERAL PETRLEO GS NATURAL URNIO HIDRULICA BIOMASSA 2,15 76,84 16,85 3,57 27,59 63,40
CARVO MINERAL PETRLEO GS NATURAL URNIO HIDRULICA BIOMASSA
Miscellaneous thoughts/quotes/notes... addendum by James Page
"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?"
A: "We need technology to change this and increase yields and product in traditional areas where markets function better."
Cont'd
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
Brazilian Chamber of Deputies. Personal Interviews and Presentation. July 2007.
17 Nov 2005
Nastari / Datagro @ NIPE Unicamp
40