Renewable Energy Asia 2013

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1 Renewable Energy Asia 2013 Sustainable Bioenergy and Biofuels: The Success Story of Brazil Manoel Regis L. V. Leal CTBE Brazilian Bioethanol Science and technology Laboratory Bangkok, Thailand June 05, 2013

2 Contents Biodiesel Bioelectricity Bioethanol Brief history Technology Production model Sustainability Certification GHG emissions Land use issues

3 A good combination of: Key to Success With Bioenergy Driving forces Technology development and use Public policies Capacity building Proper choice of feedstock Size and tradition of the agriculture sector

4 Biodiesel, Bioelectricity and Bioethanol Three Different Stories in Brazil Different driving forces, past experience and legal framework Competitiveness in face of conventional energy alternatives Government interest Existing experience and technology

5 Biodiesel Biodiesel Tentatives in the 1980s without success Launching of the Biodiesel Production and Use National Program (PNPB) targeting B5 Legal Framework established in 2004 Driving forces: decrease diesel imports and support family agriculture Today: B5 countrywide, 2.8 billion liter production and 7.7 billion installed capacity Sales through auctions organized by government with a reference price Needs subsidies

6 Biodiesel Support to Family Agriculture The PNPB introduced rules to favor family agriculture providing technical assistance and tax reduction for biodiesel produced from feedstocks derived from family agriculture and poor regions Tax reduction (Social Seal) Family agriculture in North, Northeast and Semiarid Regions: castor beans and palm 100% social tax reduction; in other regions 68% social tax reduction Large scale agriculture in North, Northeast and Semiarid Regions: castor beans and palm 32% social tax reduction; in other regions there is no tax reduction In 2010 there were more that 100,000 qualified family agriculture units

7 Source: EPE, 2012 Biodiesel Feedstocks

8 Source: EPE Biodiesel Outlook

9 Bioelectricity There are two types of markets for electricity: the regulated market(acr) and free market (ACL) ACR: E.E. sold though auctions organized by government with reference prices (app. 80% of market) ACL: E.E. sold by direct negotiation between supplier and user Problems for sugarcane E.E.: competition with wind power and difficulties and high costs of interconnection with the grid

10 Bioenergy Generation Profile in 2008 Biofuel E.E. (GWh) Capacity (MW) Tarrif 1 (R$/MWh) Wood wastes Sugarcane residues 8,357 2, Rice straw Black liquor 2 5, Biogas Total 14,279 3,681 Source: MME, COGEN Notes: 1. PROINFA tariffs referred to March 2004 (R$ 1.70/US$); today all types o bioelectricity dispute the market with the same reference price. PROINFA is a National Program aimed at supporting renewable energy in power generation 2. Residue from pulp/paper industry

11 Bioelectricity Potential The potential is mainly in the surplus electricity from the sugarcane mills New mills are being built with state of the art energy sector and several old mills are retrofitting the energy sector In mills (28% of the 393) were selling EE; those mills crushed 47% of the total cane Competition from wind power is slowing down the expansion Interconnection with the grid needs be discussed

12 The Mill E.E. Generation Profile Units selling EE Units not selling EE Total No. of Units % of units Milled cane (Mtc/a) % of milled cane Avg mill capacity (Mtc/a) 2,550 1,134 1,534 Installed capacity (MW) 3,844 1,731 5,575 EE generation (GWh/a) 13,472 5,648 19,120 EE sale (GWh/a) 7,318 7,318 Specific EE sale (kwh/tc) 26 Source: CONAB, 2010

13 Mills Surplus Power Generation Potential Source: EPE, 2012 Note: using bagasse only

14 Surplus Power Potential VS Contracted Energy Source: EPE, 2012 Note: Using bagasse only

15 Future of Surplus EE Generation in the Mills There is a reasonable probability that the potential do not materialize Main problems are lack of public policies to solve the competitiveness and interconnection problems Although the present situation is the mills genera EE only during the crushing season (7 months) the period is very dry and coincides with low levels in the hydro plants reservoirs

16 Ethanol A Brief History Trials to develop ethanol fuel applications 1920s Trials continued and government support the research in ethanol in Otto cycle engines 1931 Government mandated 5% ethanol blend in the gasoline 1933 Creation of Sugar and Alcohol Institute (IAA)to control the sugarcane sector Increased use of ethanol fuel use due to oil supply import problems (WWII) Ethanol fuel use on an as available base (5 7% blend, mostly) Creation of the two main sugarcane breeding programs (SP and RB varieties) 1975 Launching of the National Alcohol Program (Proalcool) Fast growth of ethanol production in distilleries annexed to existing mills 1979 Auto industry starts to offer neat ethanol cars; CTC is created Building of autonomous distilleries (cane juice) ethanol production increase Deregulation of the sugarcane sector free market operation, no subsidies 1990 Extinction of IAA sector under self control 2003 Introduction of the Flexible Fuel Vehicles 2005 New fast expansion phase 2008 Financial crisis

17 Ethanol Car 1925

18 Sugarcane, Sugar and Ethanol Production Source: CTBE based on information from UNICA, UDOP, MAPA, ALCOPAR

19 Main Technology Improvements Agriculture Breeding: four programs, with two dominating with around 90% of planted area; varieties RB (Planalsucar/Ridesa) and SP (CTC) are introduced in the canefields; GM sugarcane varieties started to be developed in 1994 Agriculture management: full integration with factory, TI, fleet optimization, cane transport improvements, residues application, entomology and biocontrol, satellite images, benchmarking Mechanization: harvesting and plating, GPS/automatic pilot Industry Gains in efficiency, yields and scale Automation Benchmarking Energy From an energy buyer (EE and firewood) to an energy seller (EE and bagasse) Increase in steam pressure : 15 bar to 21 bar to 67/100 bar Turbo generators from single stage/back pressure to multi stage condensing/extraction Use of trash (incipient)

20 Increase in Availability of Commercial Varieties 90,0 80,0 70,0 CB41-76 IAC CB45-3 RB ,0 50,0 40,0 SP SP SP SP RB RB ,0 RB72454 SP ,0 SP ,0 NA56-79 SP ,0 `84 `85 `86 `87 `88 `89 `90 `91 `92 `93 `94 `95 `96 `97 `98 `99 `00 `01 `02 `03 Source: CTC

21 Technology Improvement Industry Milling capacity 6x78 tandem 5,500 14,000 (tc/day) Fermentation time (h) 16 8 Extraction efficiency (%) Fermentation efficiency(%) Distillation efficiency (%) Distillery global efficiency (%) Boiler efficiency (%) Source: DEDINI, CTC

22 Global Improvements Efficiency improvements and cost reductions in the sugarcane sector from 1975 to 2008 Sugarcane yield (from 46.8 to 77.5 ton/ha) Ethanol yield (from 2,772 to 6,234 L/ha) Ethanol cost(from 1.20 to 0.38 US$/L) Sugar yield (from 4.7 to 11.0 ton/ha) Ethanol yield (from 59.2 to 80.4 L/ton of sugarcane) Sugarcane cost (from 44.4 to 13.8 US$/ton) Sugar yield (from 99.9 to kg/ton of sugarcane) 150% 100% 135% 125% 66% 50% 42% 36% 0% -50% -100% % Ano

23 Production Model In the beginning of Proalcool: distilleries were annexed to existing mills In the Proalcool stagnation phase ( ) sugar factories were annexed to the autonomous distilleries New expansion phase (from 2005): both autonomous distilleries and sugar/ethanol integrated plants were installed After the power sector deregulation there has been and increasing modernization of the old mills to generate surplus electricity and most of the new mills already come with the state of the art energy section There has been a change from a food industry to a food and power industry In 2009, there were 111 mills, out of 393, selling surplus electricity (26 kwh/tc, avg) and they represented 47% of the crushed cane

24 Sustainability The Challenges It is a highly subjective concept There is a significant quantity of criteria and indicators that are dependent on the local conditions Methodologies are still in developing stage Lack of reliable and traceable data in a level of spatial and temporal disaggregation adequate for the case under study Too many certification systems available Different requirements from different countries

25 Biofuels Sustainability Certification Initiatives

26 Main Biofuels Certification Systems Roundtable on Sustainable Biofuels (RSB) Global Bioenergy Partnership (GBEP) International Sustainability and Carbon Certification (ISCC) BONSUCRO: by the end of 2012 there were 28 mills certified, two in Australia and 26 in Brazil

27 GBEP Sustainability Pillars

28 GBEP Indicators

29 Main International Legislations Renewable Energy Directive (RED): EU Minimum 10% renewable energy in transport by 2020 Threshold values for GHG emission reduction: 35% in 2013, 50% in 2017 and 60% in 2018, including LUC/ILUC emissions No cropping in areas that are protected, with high carbon stock or with a high biodiversity value Renewable Fuel Standard (RFS2): USA Target of 136 billion L (36 billion gallons) in 2022 Threshold values for GHG emission reduction of 20% for renewable fuels, 50% for advanced biofuels, 60% for 2G biofuels No cropping in areas that are protected, with high carbon stock or with a high biodiversity value

30 Some Key Points of Sustainability GHG emission reduction Displacement of fossil fuels Natural resources demand (land, water) Impacts on soil and water quality Production costs Land use change (LUC) Impacts on food production Social impacts Impacts on biodiversity All these items bear a strong dependence on land demand, thus on the biofuel feedstock productivity

31 Brazilian Ethanol Energy Balance and GHG LCA Note: LUC and ILUC derived emissions are not included Source: Macedo et al., 2008

32 Energy Balance and LCA GHG Emissions The agriculture area is responsible for 90% of fossil energy consumption and 94% of GHG emissions Soil and straw burning GHG emissions (non CO 2 ) represent around 55% of agricultural area emissions Agricultural operations consume 40% of fossil energy related to cane production More than 2/3 of GHG emissions depend solely on cultivated area LUC and ILUC emissions also depend only on the cropped area, and they can have a significant impact on the total LCA GHG emissions

33 Source: EPA, 2010 US EPA 1 st Round

34 Source: EPA, 2011 US EPA 2 nd Round

35 RED Default Values Biofuel Production Pathway Typical GHG Emission Saving (%) Default GHG Emission Saving (%) Wheat ethanol (lignite in CHP plant) Wheat ethanol (NG in CHP) Corn ethanol, Community produced (NG in CHP) Sugar beet ethanol Sugarcane ethanol Farmed wood ethanol (2G) Farmed wood Fischer Tropsch diesel (2G) Note: ILUC derived emissions not included Source: Directive 2009/28/EC (RED) 93 93

36 ILUC Derived Emissions Simulation Biofuel ILUC Derived Emissions (gco2e/mj) Net Emission Reduction (%) 1 Ethanol sugar beet Ethanol sugarcane Ethanol corn Ethanol wheat 12 7 Notes: 1 Negative values represent emission reduction with respect to displaced fossil fuels. 2 GHG emissions in LCA= 20.6 gco2e/mj (Macedo et al. 2008) Only sugarcane ethanol will meet the minimum threshold values of RED after 2017 Source: EC, 2012

37 Notes: Mha of land available for sugarcane cultivation with low impacts 2. This means that 92.5 % of Brazilian territory is not available for sugarcane cultivation Sugarcane Agroecological Zoning

38 Source: CTC Sugarcane Expansion: 2003 to 2012

39 Brazilian GHG Emissions By Sector (2005) Sector GWP 2005 (Mt CO 2 e) Participation (%) Energy Industrial processes Agriculture LULUCF 1, Waste treatment Total 2, Source: Ministry of Science, Technology and Innovation

40 Dynamics of Sugarcane Expansion in CS Brazil (LUC)

41 Agricultural Area Outlook

42 Actions to Reduce Brazil GHG Emissions Deforestation: establish targets, monitor and enforce the law LU: AEZ, cattle/forestry/agricultural integration Energy: maintain or improve the participation of renewable energies in the energy matrix Transport: increase the use of biofuels and improve vehicle efficiency

43 Thank you for your attention!