and Sustainable Rural Development

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1 Biofuels and Sustainable Rural Development International Seminar on Biomass Energy and Sustainable Rural Development UNAM Morelia,, Mexico June 26-28, 28, 2003 Boris E. Utria Program Manager Africa Energy Unit The Presentation Outline 1. Sustainable Biomass Energy Carriers 2. Brasil s PROALCOOL Example 3. Millennium Gelfuel Example 4. Biofuels and Rural Development 5. PRSP Bioenergy Assessments 5. Moving Biomass Energy Forward

2 Presentation Outline 1. Sustainable Biomass Energy Carriers Vision: Contribute to Poverty Alleviation and Climate Change Mitigation in client countries through the development of comprehensive and sustainable biomass energy sector policies, strategies and investments. National BIO-ENERGY Strategy Sustainable Woodfuels program Bio-Ethanol Program Bio-Diesel Program Power Generation program Other Bio-Energy Moving LDC s towards a Renewable Energy Platform for a sustainable future...

3 Presentation Outline 1. Sustainable Biomass Energy Carriers 2. Brasil s PROALCOOL Example BRASIL: PROALCOOL Main achievements & impacts 12 million m 3 ethanol ethanol (20X 1975); Oil displacement: : 200,000 barrels/day day; 2.5 million neat ethanol cars in operation 15.5 million cars using 22% anhydrous ethanol-gasoline blend; > 1/3 of gasoline displaced; $48 billion FOREX FOREX expenditures avoided in , with an investment of $5 billion (2001 $) in local currency.

4 BRASIL: PROALCOOL Main achievements & impacts 320 million metric tons of sugarcane produced in 2002 (4 times more than in 1975); 20 million ton sugar (3X 1975); > 300 ethanol distileries (200 annexed); 25,000 gas stations selling hydrous ethanol today; 700,000 jobs created in production US$10-20K/ 20K/job (4x lower than avg.) BRASIL: PROALCOOL Main achievements & impacts BRASIL: (Cont.) Demonstration that massive biomass program can be established in a short term; Sugarcane/sugar/ethanol technology development demonstrated by productivity increases and cost reduction; Development of market based Ethanol price system; Lessons Learned for replication.

5 BRASIL: PROALCOOL Environmental Impacts Lead displacement due to octane enhancement properties of ethanol: lead concentrations in São Paulo dropped 93% from 1978 to 1991 NO x, CO and Sulfur emissions from ethanol fuels are reduced while HC (hydrocarbons( hydrocarbons) and aldehyde emissions are increased. However ethanol HCs and aldehydes are less toxic than gasoline s. The environmental impacts from ethanol production, particulally the stillage disposal, have been resolved CO 2 emissions from ethanol vehicles are absorbed back by sugarcane growing in a closed cycle, making ethanol fuel eligible for CDM / Kyoto Protocol BRASIL: Trends and Future Prospects Cogeneration using sugarcane bagasse (from current 20 kwh/ton to kwh/ton sugarcane) Other energy uses for ethanol: Vegetable oil transesterification (Bio-Diesel) Fuel cell Household cooking (ethanol / Gelfuel) International market development: potential demand for ethanol as energy and environmental commodity in USA, EU, India, China, Canada, Japan, etc). Opportunities open by the MTBE phase out in California for reformulated gasoline. Removal of present tariff and non-tariff barriers to imports in required for the development of sustainable international fuel ethanol market. Flexible-fuel vehicle: one one vehiche/multiple fuels Greenhouse gases abatement - carbon credits/cdm

6 Presentation Outline 1. Sustainable Biomass Energy Carriers 2. Brasil s PROALCOOL Example 3. Millennium Gelfuel Example A Energy & Poverty Alleviation Initiative: Redirecting an existing commercial energy product with (AFTEG) knowledge support. Winner of a Technological Development Award from the Development Marketplace 2000

7 Millennium = Gelfuel Ethanol-Based Fuel Produced From Agricultural Crops + + = Production Process/Costs End-use Technology Distribution 2000

8 Consumer Acceptability ID. of Pilot 2001 Gelfuel Production 2001 Comparison of CO 2 Emissions at Preparation of Standard Meal Fuel Stove Type Fuel used (kg) CO2 production (gm/kg) CO 2 Emission (gm/meal) Comparative Emmisions Ratios LPG Gas burner Kerosene Charcoal Fuelwood M.Gelfuel Wick Pressurized Traditional Improved Traditional Improved Cover + regulator Stove

9 MG Stove & Cost: US $2-8 depending on materials Millennium Gelfuel Efficient Combustion + Clean + Safe

10 DM 2001 Stove Wind Shield (Optional) 2002 Adaptation to Existing Traditional/Improved Stoves in JIKO Stove w/ MG Burner Traditional JIKO Stove

MBAULA Wood Stove (High in-door pollution)

11 MBAULA Wood Stove (High in-door MG Stove (No in-door pollution) Wholesale/Retail Shipping & Dispensing liter Re-cycled bottle 20 Liters (Hanging) 25 Liters Millennium Gelfuel LDPE Laminated Bags Original 2001

Millennium Gelfuel One-meal-Energy-Pack 300 gms @ 2001 A low-cost package to allow low-income households access to the Millennium Gelfuel @ 2001 Ethiopia: Comparative Cost of Household

12 Millennium Gelfuel One-meal-Energy-Pack A low-cost package to allow low-income households access to the Millennium 2001 Ethiopia: Comparative Cost of Household Cooking Fuels US $/Month/Household (75 Meals/Month) LPG Kerosene (W) Kerosene (P) Charcoal (T) Charcoal (I) Fuelwood (T) Fuelwood (I) M.Gelfuel (CR) M.Gelfuel (RS)

13 Zimbabwe: Comparative Cost of Household Cooking Fuels US $/Month/Household (75 Meals/Month) LPG Kerosene (W) Kerosene (P) Charcoal (T) Charcoal (I) Fuelwood (T) Fuelwood (I) M.Gelfuel (CR) M.Gelfuel (RS) Malawi: Comparative Cost of Household Cooking Fuels US $/Month/Household (75 Meals/Month) LPG Kerosene (W) Kerosene (P) Charcoal (T) Charcoal (I) Fuelwood (T) Fuelwood (I) M.Gelfuel (CR) M.Gelfuel (RS)

14 Mozambique: Comparative Cost of Household Cooking Fuels US $/Month/Household (75 Meals/Month) LPG Kerosene (W) Kerosene (P) Charcoal (T) Charcoal (I) Fuelwood (T) Fuelwood (I) M.Gelfuel (CR) M.Gelfuel (RS) Current Gelfuel Production: Zimbabwe: 30,000 lt/m South Africa: 60,000 lt/m Malawi: 10,000 lt/m Project Proposals (GEF MSP): Ethiopia: 600,000 lt/m Mozambique: 250,000 lt/m Malawi, Madascar,, Senegal, China, Zimbabwe...

Biofuels and Rural Development Ethanol/Millennium Gelfuel: A

15 Presentation Outline 1. Sustainable Biomass Energy Carriers 2. Brasil s PROALCOOL Example 3. Millennium Gelfuel Example 4. Biofuels and Rural Development Ethanol/Millennium Gelfuel: A Sustainable Engine for Rural Transformation? POVERTY ALLEVIATION

16 Ethanol/Millennium Gelfuel: A Sustainable Engine for Rural Transformation Investments Private Sector Public Sector Production of New Agricultural Crops Agricultural Employment & Incomes Econ. Activity & Diversification Opening of New Production Zones Ecosystem Rehabilitation Poverty Alleviation Access: Consumer Goods, Soc. Services, Education, etc. = Increase/Improvement; = Decrease/Reduction. Ethanol/Millennium Gelfuel: A Sustainable Engine for Rural Transformation Investments Private Sector (70%) Public Sector (15%) Climate Change Mechanisms (15% 15%) ETHANOL Production of New Agricultural Crops Agro-industrial Employment Economic Activity Poverty Alleviation Agricultural Employment & Incomes Econ. Activity & Diversification Opening of New Production Zones Ecosystem Rehabilitation Poverty Alleviation Access: Consumer Goods, Soc. Services, Education, etc. Ethanol By-Products = Increase/Improvement; = Decrease/Reduction.

17 Ethanol/Millennium Gelfuel: A Sustainable Engine for Rural Transformation Investments Private Sector (70%) Public Sector (15%) Climate Change Mechanisms (15% 15%) Millennium Gelfuel ETHANOL industrial Employment Production of New Agricultural Crops Agro-industrial Employment Economic Activity Poverty Alleviation Gasoline Blending / Substitution Power Generation Ethanol Exports Agricultural Employment & Incomes Econ. Activity & Diversification Opening of New Production Zones Ecosystem Rehabilitation Poverty Alleviation Access: Consumer Goods, Soc. Services, Education, etc. Ethanol By-Products Fertilizers Brewers Yeast Rural Power Generation Other = Increase/Improvement; = Decrease/Reduction. Ethanol/Millennium Gelfuel: A Sustainable Engine for Rural Transformation Investments Private Sector (70%) Public Sector (15%) Climate Change Mechanisms (15% 15%) Production of New Agricultural Crops Agricultural Employment & Incomes Econ. Activity & Diversification Opening of New Production Zones Ecosystem Rehabilitation Poverty Alleviation Access: Consumer Goods, Soc. Services, Education, etc. ETHANOL Agro-industrial Employment Economic Activity Poverty Alleviation Ethanol By-Products Millennium Gelfuel industrial Employment Gasoline Blending / Substitution Power Generation Ethanol Exports Fertilizers Brewers Yeast Rural Power Generation Other Woodfuels Substitution Kerosene Substitution Stable Hhold Energy Markets CO2 Emissions & In-Door Pollution Bal.Payment Transport CO2 Emissions Bal.Payment Power Gen. Capacity FOREX Bal. Payment Ag.Production Bal. Payment Human Consumption Animal Feed Rural Electricity Access = Increase/Improvement; = Decrease/Reduction.

18 BIOFUELS: FUNDING STRATEGY Sector Local Private Privado Sector Nacional 30% Foreign SP 15% 15% Sector Foreign Private Privado Sector Extranjero 40% Sector Public Sector Publico Local PS Private Sector 70% Public Sector 15% Climate Change/CDM 15% Climate Change / Clean Development Fondos Mechanism "Cambio Climatico" CDCF) (GEF, PCF, BCF, TABLE 2: Land Requirements, Rural Employment and Millennium Gelfuel Production From 25% and 50% Increase in Agricultural Crops in Africa (1) 25% Production Increase over SUGAR CROPS STARCH CROPS ALL CROPS Year '2000 SUGAR CANE SWEET SORGHUM CASSAVA MAIZE SWEET POTATOES TOTALS Crop Levels (2) (3) (4) (2) (3) (4) (2) (3) (4) (2) (3) (4) (2) (3) (4) (2) (3) (4) Ha Jobs Gelfuel Ha Jobs Gelfuel Ha Jobs Gelfuel Ha Jobs Gelfuel Ha Jobs Gelfuel Ha Jobs Gelfuel REGION (10 6 ) (10 6 ) (10 6 Lt) (10 6 ) (10 6 ) (10 6 Lt) (10 6 ) (10 6 ) (10 6 Lt) (10 6 ) (10 6 ) (10 6 Lt) (10 6 ) (10 6 ) (10 6 Lt) (10 6 ) (10 6 ) (10 6 Lt) Central Africa , ,898.5 Eastern Africa , , ,254.6 Southern Africa , ,251.1 Western Africa , , , ,281.6 Total -> , , , , , % Increase Central Africa , ,780.1 Eastern Africa , , ,509.2 Southern Africa , , ,502.3 Western Africa , , , ,563.2 Total -> , , , , ,354.8 Source: Phillips, T., "Agro-Economic Assessment of the Potential to Produce Fermentation Ethanol Alcohol In Africa", Program, Notes: (1) Projections based on 25 and 50 percent of 2001 and production of the specific crop. It is assumed that yields remain constant and that labour inputs will increase in proportion to production increases. Required land expansion was constrained by availability of suitable land. Sources: (a) for Production data: FAO, Agricultural Production, FAOSTAT ( (b) for Suitability data: IIASA and FAO. (2000); and, (c) for Global Agro-Ecological Zones (2) Land requirements of projection scenarios presented in million Hectares (Ha). (3) Employment Generation presented in millions and only reflect new jobs in the agricultural production phase. Actual number calculated on the basis of total number of day/person labour input divided by 250 workdays/year. Agro-industrial employment in ethanol distillation and gelfuel production is estimated to be of the order of 100,000 new permanent jobs not included. (4) Millennium Gelfuel production calculated on the basis of 1.2:1 volume ratio with respect to ethanol alcohol production.

19 TABLE 2: Land Requirements, Rural Employment and Millennium Gelfuel Production From 25% and 50% Increase in Agricultural Crops in Africa (1) 25% Production Increase over SUGAR CROPS STARCH CROPS ALL CROPS Year '2000 SUGAR CANE SWEET SORGHUM CASSAVA MAIZE SWEET POTATOES TOTALS Crop Levels (2) (3) (4) (2) (3) (4) (2) (3) (4) (2) (3) (4) (2) (3) (4) (2) (3) (4) Ha Jobs Gelfuel Ha Jobs Gelfuel Ha Jobs Gelfuel Ha Jobs Gelfuel Ha Jobs Gelfuel Ha Jobs Gelfuel REGION (10 6 ) (10 6 ) (10 6 Lt) (10 6 ) (10 6 ) (10 6 Lt) (10 6 ) (10 6 ) (10 6 Lt) (10 6 ) (10 6 ) (10 6 Lt) (10 6 ) (10 6 ) (10 6 Lt) (10 6 ) (10 6 ) (10 6 Lt) Central Africa , ,898.5 Eastern Africa , , ,254.6 Southern Africa , ,251.1 Western Africa , , , ,281.6 Total -> , , , , , % Increase Central Africa , ,780.1 Eastern Africa , , ,509.2 Southern Africa , , ,502.3 Western Africa , , , ,563.2 Total -> , , , , ,354.8 Source: Phillips, T., "Agro-Economic Assessment of the Potential to Produce Fermentation Ethanol Alcohol In Africa", Program, Notes: (1) Projections based on 25 and 50 percent of 2001 and production of the specific crop. It is assumed that yields remain constant and that labour inputs will increase in proportion to production increases. Required land expansion was constrained by availability of suitable land. Sources: (a) for Production data: FAO, Agricultural Production, FAOSTAT ( (b) for Suitability data: IIASA and FAO. (2000); and, (c) for Global Agro-Ecological Zones (2) Land requirements of projection scenarios presented in million Hectares (Ha). (3) Employment Generation presented in millions and only reflect new jobs in the agricultural production phase. Actual number calculated on the basis of total number of day/person labour input divided by 250 workdays/year. Agro-industrial employment in ethanol distillation and gelfuel production is estimated to be of the order of 100,000 new permanent jobs not included. (4) Millennium Gelfuel production calculated on the basis of 1.2:1 volume ratio with respect to ethanol alcohol production. COLOMBIA: Scenario: : 180,000 Empleos/500,000 Ha. * Land Requirements, Ethanol Production, Employment and Investment Envelope GENERACION DE EMPLEOS DIRECTOS Alcohol Nivel Capacacitacion INVERSION Biomasa Etanol Bajo Medio Alto Total REQUERIDA Ton/Yr Lt/Yr 60% 10% 30% 100% # Empleos Baja Alta CULTIVOS Hectareas (Millones) (Millones) (Millones Persona/Dia/ha.) Permanentes (Millones US $) Cana de Azucar 100, , Sorgo Sacarino 150, ,667 1,236 2,120 Maiz 150, , Yuca 100, , Total 500, , ,352 1,470 2,519 (*) Target proposed by national government within the Plan Colombia Context is of 380,000 ha. for the period.

20 COLOMBIA: Scenario: : 180,000 Empleos/500,000 Ha. * Land Requirements, Ethanol Production, Employment and Investment Envelope GENERACION DE EMPLEOS DIRECTOS Alcohol Nivel Capacacitacion INVERSION Biomasa Etanol Bajo Medio Alto Total REQUERIDA Ton/Yr Lt/Yr 60% 10% 30% 100% # Empleos Baja Alta CULTIVOS Hectareas (Millones) (Millones) (Millones Persona/Dia/ha.) Permanentes (Millones US $) Cana de Azucar 100, , Sorgo Sacarino 150, ,667 1,236 2,120 Maiz 150, , Yuca 100, , Total 500, , ,352 1,470 2,519 (*) Target proposed by national government within the Plan Colombia Context is of 380,000 ha. for the period. Presentation Outline 1. Sustainable Biomass Energy Carriers 2. Brasil s PROALCOOL Example 3. Millennium Gelfuel Example 4. Biofuels and Rural Development 5. PRSP Bioenergy Assessments

21 AFTEG/BEWP (FY04-06): Biomass Energy Inventory & PRSP Assessment INVENTORY & ENERGY OUTPUT POTENTIAL ASSESSMENT Woody Biomass Ag. Crops Energy Output Energy Output Biomass Energy Inventory: establish potential bio-energy scenarios (carriers and output levels). Agro- Residues Energy Output AFTEG/BEWP (FY04-06): Biomass Energy Inventory & PRSP Assessment INVENTORY & ENERGY OUTPUT POTENTIAL ASSESSMENT Woody Biomass Ag. Crops Agro- Residues Energy Output Energy Output Energy Output CLIMATE CHANGE ASSESSMENT (Evaluation of CDM $ Mobilization ) Biomass Energy Inventory: establish potential bio-energy scenarios (carriers and output levels). Climate Change Assessment: establish compliance of potential bio-energy scenarios with Agenda 21and UNCCC and estimate possible mobilization of CC funding.

22 INVENTORY & ENERGY OUTPUT POTENTIAL ASSESSMENT Woody Biomass AFTEG/BEWP (FY04-06): Biomass Energy Inventory & PRSP Assessment Ag. Crops Agro- Residues CLIMATE CHANGE ASSESSMENT Energy Output Energy Output Energy Output (Evaluation of CDM $ Mobilization ) Biomass Energy Inventory: establish potential bio-energy scenarios (carriers and output levels). Climate Change Assessment: establish compliance of potential bio-energy scenarios with Agenda 21and UNCCC and estimate possible mobilization of CC funding. POVERTY ASSESSMENT (MDG/PRSP MATRIX) Employment New Economic Activity GDP Growth SOCIAL DEV. MDG #1 MDG #2 MDG #3 MDG #4 MDG #5 MDG #6 MDG #7 PRSP MATRIX CAS PRSC+ SI + SA Poverty Assessment: estimate impacts of potential bio-energy scenarios with respect to MDGs and WB poverty alleviation objectives, and elaborate PRSP energy sector coefficients to assist in definition of CASes and operational instruments. Presentation Outline 1. Sustainable Biomass Energy Carriers 2. Brasil s PROALCOOL Example 3. Millennium Gelfuel Example 4. Biofuels and Rural Development 5. PRSP Bioenergy Assessments 5. Moving Biomass Energy Forward

23 Investments Private Sector (70%) Public Sector (15%) Climate Change Mechanisms (15% 15%) Production of New Agricultural Crops Agricultural Employment & Incomes Econ. Activity & Diversification Opening of New Production Zones Ecosystem Rehabilitation Poverty Alleviation Access: Consumer Goods, Soc. Services, Education, etc. ETHANOL Ethanol By-Products = Increase/Improvement; = Decrease/Reduction. Agro-industrial Employment Economic Activity Poverty Alleviation Millennium Gelfuel industrial Employment Mogas/Diesel Substitution Power Generation Ethanol Exports Fertilizers Brewers Yeast Rural Power Generation Other Woodfuels Substitution Kerosene Substitution Stable Hhold Energy Markets CO2 Emissions & In-Door Pollution Bal.Payment Transport CO2 Emissions Bal.Payment Power Gen. Capacity FOREX Bal. Payment Ag.Production Bal. Payment Human Consumption Animal Feed Rural Electricity Access Ethanol/Millennium Gelfuel: A Sustainable Engine for Rural Transformation Moving BioEnergy Forward Upgrade of Analytical and Economic Evaluation Tools Medium-to-Long Term Evaluation Frameworks Multi-Sectorial & Multi-Disciplinary Work Lead Role for Agriculture and NRM Expertise Conducive Policy Frameworks (Governments) Supportive Role for Development Agencies Lead Implementation Role for Private Sector Mobilization of Clean Development Mechanisms To be continued Thank you.

Efficient Use of Biomass for Energy in Developing Countries

Efficient Use of Biomass for Energy in Developing Countries IEA Bioenergy Task 38 Conference Ostersund,, Sweden September 30, 2003 Boris E. Utria, AFTEG RPTES Program Manager /Co-Chair Chair E&P TG The