Biofuels in Brazil The Ethanol Experience. Paulo C. R. Lima, M.Sc., Ph.D. Energy Consultant for Brazilian Congress

Transcrição

1 Biofuels in Brazil The Ethanol Experience Paulo C. R. Lima, M.Sc., Ph.D. Energy Consultant for Brazilian Congress

2 Main biofuels in Brazil > Ethanol (present and future) > Biodiesel (future) > Sugarcane bagasse > Charcoal

3 Brazil s potential Millions of hectares Brazil s area ~ 850,00 Total area for agriculture 320,00 Cultivated area all crops 60,40 with sugar cane 5,34 for ethanol 2,66 Source: Ministério da Agricultura, Pecuária e Abastecimento

4 Fonte: Carvalho L. C. C Cultivated area: 5.5 million ha It could be 20 times greater

5 Ethanol in Brazil 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

6 Sugarcane production and key facts PROÁLCOOL 303 Flex-Fuel Vehicles Law nº 8.723, 1993 (22%+/- 2% e 1% allowance) Ethanol export ( t) Source: UNICA União da Indústria Canavieira do Estado de São Paulo

7 Ethanol production 2006: 17 million cubic meters 15,4 15,28 14,37 14,72 13,87 12,59 13,02 12,62 10,59 11, / / / / / / / / / /2005 Source: UNICA m 3

8 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

9 IMPACTS OF ETHANOL PRODUCTION Social Environment farmers 16 million cars powered by gasoline with 25% ethanol addition More than 1 million flex fuel cars 395 distilleries 1million people 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)

10 SUGARCANE Productivity improvement (Center-South) (ton per hectare-year) Source: Amorim e Lopes

11 ETHANOL Increase of productivity (Center-South) 7000 liters/ha-year / Source: UNICA

12 Learning curve Ethanol price at distillery Gasoline price at refinery Source: Goldemberg,J. & Macedo,I., 2005

13 Ethanol production costs Production cost: US$ 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 m 3 /day Capital cost: US$ 60 million Raw material cost: US$ per liter of ethanol Capital cost: US$ per liter of ethanol Source: Nastari, P. M

14 New plants NEW DISTILLERIES (around 50)

15 Energy balance of ethanol production 12 energy output/input ratio Sugarcane Sugar beet Wheat straw Corn Wood ethanol feedstock

16 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

17 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

18 Perspectives for ethanol in developing countries

19 BIODIESEL Brazil has 90 million hectares available for producing oil crops.

20 Law nº / Introduces biodiesel into the Brazilian energy matrix - 2% has to be added to diesel in 3 years (by January 2008) 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

21 Law / 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 Defines the value of PIS/PASEP and COFINS - Creates the Social Fuel Stamp

22 Source: Gomide, R. B

23 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

24 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

25 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

26 1º Auction

27 2º Auction

28 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

29 Source: Gomide, R. B BIODIESEL PLANTS

30 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

31 Tributos Federais: Decretos nº 5.297/04 e 5.457/05 Tributos federais Agricultura Familiar no Norte, NE e Semi-árido com mamona ou palma Biodiesel Norte, NE e Semi-árido Agricultura com Familiar mamona ou palma Regra Geral Diesel de Petróleo IPI 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 Total tributos federais 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

32 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%

33 BIODIESEL Áreas não exploradas de 90 milhões de ha estão disponíveis para produção de grãos no Brasil

34 Matriz de Energia Elétrica Empreendimentos em Operação Capacidade Instalada Total Tipo N. de % N. de % (kw) (kw) Usinas Usinas Hidro , ,13 Gás Natural ,69 Processo , ,60 Óleo Diesel ,50 Petróleo Óleo , ,14 Residual Bagaço de Cana ,24 Licor Negro ,77 Biomassa Madeira , ,25 Biogás ,02 Casca de Arroz ,01 Nuclear , ,97 Carvão Carvão Mineral Mineral , ,39 Eólica , ,03 Paraguai ,33 Argentina ,85 Importação Venezuela , ,01 Uruguai ,20 Total

35 Produção de Energia Primária 10 6 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

36 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.

37 Cont d Improvements in this technology will lead to 300,000 of Brazil s poorest losing their jobs by There is no way for Brazil to use renewable energy costs are way too high. 17 Nov 2005 Nastari / NIPE Unicamp 37

38 The Amazon is the world s air conditioning system. The free market will lead us to the end.

39 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.

40 Citation for Addendum Brazilian Chamber of Deputies. Personal Interviews and Presentation. July Nov 2005 Nastari / NIPE Unicamp 40