Ethanol and sustainability issues The case of Brazil and new opportunities for innovation and development

Transcription

1 Ethanol and sustainability issues The case of Brazil and new opportunities for innovation and development Thiago Romanelli, Dr Dept of Rural Engineering College of Agriculture Luiz de Queiroz University of Sao Paulo Sao Paulo June 18,

2 Brazilian Center for Biofuels`s background 1

3 Brazilian Center for Biofuels at the University of Sao Paulo School of Agronomy Sao Paulo State 2

4 The roles and functions of the Brazilian Center for Biofuels: A Think the University of Sao Paulo Contribution to: Strategic and applied research S&T&I supporting and influencing policies Awareness raising and capacity building Mitigation of GHGs and carbon projects 3

5 Key biofuels drivers Global and larger frameworks supporting biofuels deployment Oil consumption and prices: a security issue IPCCC and Stern report environmental and economic impacts of GHGs USA goals of reducing 10% gasoline consumption in 20 years EU Directives on Biofuels 2003/30/EC & Biofuels Vision 2030 Kyoto targets and voluntary commitments Cost effective substitution and future technologies available. Competitive prices and being renewable 4

6 Some remarks... Energy intensity economies developed versus developing countries Asymmetric impacts of GHGs in countries the poor will suffer the most Livelihoods... trends in consumption patterns and cultural behavior The role of renewable energy sources Technologies and biofuels: competitiveness and innovation 5

7 Biofuels framework - understanding key drivers of energy supply and demand System dynamics and their multiple interactions Global awareness + Climate change + GHGs + - Gasoline/Diesel Querosene - Oil reserves + Hydro Environmental taxes & policies Trends in consumption + Economic growth Energy demand + + Roles and functions of government, private sector and NGOs - Quality of life and livelihoods Energy supply Nuclear Wind Hydrogen Ethanol & biodiesel Jobs Quality of jobs Diversification - - Land use patterns Food + + Food safety + Native vegetation and forests + Biodiversity 6

8 BIOFUELS MARKET Brazil is well positioned in terms of economy, size and potential Key indicators of the BRIC countries GDP/cap GDP (billion) Area Agribus (M ha) Pop Poverty HDI PPP US$ PPP US$ (M KM2) Areable Potential (million) % pop US , % 0,94 China , % 0,76 India , % 0,60 Brazil , % 0,79 Russia , % 0,80 1) Brazil s positioning Average developing country 9 th largest economy 5 th in area but with greatest agricultural potential Average Human Development Index 1) The poverty line set by the Chinese government is approximately 1/13th the standard set by the World Bank. China s poverty line of 0.2 US$ /person daily should be reevaluated. If a daily standard of 0.3 US$ were set the number below poverty standard would triple Source: IMF

9 Brazil - the energy matrix & the role of renewable sources 100% 80% Non-renewable Renewable 87% 94% 60% 40% 56% 45% 20% 13% 6% 0% Brazil (2006) World (2004) OECD (2004) 8

10 The role of sugar cane in the energy matrix Hydroelectricity 14,8% Other Biomass 12,4% Sugar Cane 14.6% Other Renewables 3.0% Uranium 1,6% Coal 6,0% Natural Gas 9,6% Petroleum and Derivatives 37.9% 9

11 Sugar cane value chain 6,5 million ha 73 thousand growers Harvest 410 million tons 390 mills & distilleries (Operation & projects) ETHANOL 22 billion liters SUGAR 28 million tons BAGASSE Bioplastic Ethanol Food Pharmacy Derived Lysine Credits of Carbon 10

12 BIOFUELS MARKET Total production of sugarcane in Brazil increased significantly with the deployment of the ethanol vehicles The evolution of the Brazilian ethanol industry M tons of processed sugarcane Flex fuel car sector boom Last strategic plan to the sector: Próalcool Ethanol car increase of demand Stagnation of the sector Change the mix of production from ethanol to sugar Release the prices of ethanol Source: Datagro 11

13 FLEX Flex fuel cars account for more than 80% of total cars produced in Brazil Evolution of light vehicles production and Total Brazilian Fleet 000 vehicles Brazilian Fleet (2007) 21,425 80% Gasoline 14,797 FFV 2,752 Ethanol 1,446 CNG 1,385 Diesel 1,045 Source: ANFAVEA; VPB estimates 12

14 Mitigation measures due to biofuels Emissões Efetivas e Evitadas no Transporte 50 Tg ou milhão de t de Carbono Substit. Álcoo hidrtado Substit. Álcoo anidro Substituição GN/Gasolina Substituição Diesel/Gasolina QUEROS. AVIACAO GAS NATU RAL GASOLINA OLEO DIESEL CARVÃO MINERAL OLEO COMBUST

15 PRÓ-ALCOOL Ethanol productivity liters/ha growing at 2,8%/year in the last 30 years Fonte: Itaú Corretora 14

16 PRÓ-ALCOOL Brazilian sugar-cane productivity is 11% higher and has increased more than twice the world productivity Agricultural productivity M tons/ha Brazilian productivity World average productivity Source: Petrobrás 15

17 BIOFUELS MARKET Sugarcane is the most energy efficient raw material to produce ethanol Energy balance of ethanol production from different feedstocks Energy out put input ratio Sugarcane Subar beet Wheat straw Corn Wood Raw material Production /ha (kg) Quantity of Ethanol /ha Energy Output/ Energy Input sugarcane liter 8.3 Corn liter Source: Petrobrás, Coehlo/Cenbio 16

18 ENERGY EFFICIENCY Serra et al. (1979)

19 3 m 2 m Sugar Cane in Brazil 1 m 0 m 1 m 2 m Energy factory 1 ton of cane is equivalent of... 1/3 sugar 145 kg 1/3 fibre 140 kg 1/3 leaves and tops 140kg First generation 1ha = l ethanol - 65 b of oil 6.5 MM ha of sugar cane Uptake/year = 25,8 M tons of CO 2 equivalent 3 m 4 m 18

20 Sugar allometric patterns and challenges 19

21 Transgenics: agriculture technology and current genetic materials Candidate genes and traits: the roles for GM sugar cane Water deficit Max. productivity potential with irrigation Longer management cycles Sugar versus fiber content: new allometric models 20

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24 VANTAGENS Some estimates say Brazil has about 263 million ha of available land for sugar cane. It is the largest land availability in the world. Low productivity pastures for cattle takes over most of the available land. Available land in Brazil Type Total country Native Amazon Forest Secondary Amazon Forest and Others Native Forests Pasture Temporary Crops Permanent Crops Available land Available land with low impact 1) Area (Mha) Source: FAO, 2002, Emprapa 23

25 ...without having to displace food production, as seen in recent years. Brazilian Main Cropped Areas (MM Ha) Cattle (MM) 176 1,7 3,2 3,9 5,0 13, ,1 3,2 4,3 5,2 12,3 2,5 3,2 4,4 5,4 13, ,5 3,7 4,3 5,6 12, ,8 2,4 3,9 3,0 3,9 4,2 5,8 6,6 12,2 13,0 Wheat Rice Bean Sugarcane Corn CAGR Cattle 3,5% 6,7% -1,5% 1,7% 5,8% 0,0% 14,0 16,3 18,5 21,4 23,3 22,7 Soybean 10,2% Source: MAPA; CONAB 24

26 Footprint and productivity explain the sugarcane promise as a 2 nd Gen biofuels feedstock in Brazil. 78% 22% Crop Occupied Area (2007) 3% 2% 3% 4% 17% 34% Production and Productivity per Crop (2007) 74, Pasture Harvesting Area 5% 11% Total Occupied Area (Harvesting + Pasture): 270MM ha 22% Soy Corn Sugarcane Rice Coffee Manioc Wheat Cotton Others ,7 Soy 3,7 Corn S.Cane 0,9 Bean 3,7 Rice 0,9 Coffee Production (MM tons) 14 Manioc 2 Wheat 3,4 Cotton 22,3 14,1 Orange Banana Productivity (ton/ha) Others Gallons/tonne Theoretical Cellulosic Ethanol Yield by Dry Feedstock Corn Stover Bagasse Rice Straw Cotton Gin Trash 57 Unlike 1 st generation ethanol, cellulosic ethanol yield does not vary significantly between feedstocks in terms of gallons / ton. Therefore, the determining factor of end yield will be ton / hectare of biomass for each feedstock, giving sugarcane an advantage over other crops. Source: CONAB; IBGE; IEA 25

27 Sugarcane producing regions in Brazil Sources: NIPE-Unicamp, IBGE and CTC 26

28 An land use approach: the supply side FOOD ENERGY FOOD BIOENERGY FORESTS INTERNATIONAL AND NATIONAL DEMANDS: food & fuel SUSTAINABLE USE OF LAND AND LANDSCAPES ADDED VALUE OF BIOENERGY MATERIALS INTEGRATION OF AGRICULTURE/FORESTS DIVERSIFYING THE PORTFOLIO OF FARMER S S OPTIONS 27

29 DESMATAMENTO 300 BRAZIL: AGRICULTURE VS. PASTURE AREAS hectares million Pastures (natural) Pastures (planted) Others Corn Soybeans 0 Sugarcane Values for the year 2005 Number of bovine animals (million heads) Pasture areas (million hectares) Average density (heads/hectare) Brasil São Paulo If the average density in Brazil was 1.4 head/hectare million hectares of pasture could be used for agriculture Source: Brazilian bovine flock IBGE. Pesquisa agropecuária municipal. Accessed 12/09/2007; Bovine flock and pasture areas in São Paulo Amaral, A.M.P. et al. Animal production estimates in the São Paulo state for Economic ionformation. São Paulo: Instituto de Economia Agrícola, v.37, n.4, p , abr

30 Technologies for biomass conversion 2 nd generation of biofuels 29

31 Second generation and feedstocks Other feedstocks for ethanol second generation Source of feedstock Area [000 ha] Production [000 t/year] Produtivity [t/ha.year] lignin Proprieties (%) celullose hemicelullose Potential Cane Straw 6,600 72,600 9 a High Bagasse 6,600 72,600 9 a High Corn stover Soybean stover 11,549 22,933 64,029 80,747 5 a 8 3 a a a a a a 35 Medium Medium Rice stover 3,919 2,937 4 a 6 23 a a 40 - Medium Eucalyptus residues 4,000 94, a High Pine residues 2,000 38, a Medium Pastures 115, ,000 3 a 5 10 a a a 50 Low Fonte: McMillan, 1994; Wood for Alcohol Fuels, 2002; Saad, 2005; IBGE; CONAB; SBS 30

32 From resources to markets opportunities 31

33 Biotechnology frameworks for supporting the full deployment of bioenergy and biofuels Biotechnology is supporting the deployment of bioenergy and biofuels production in four main interconnected areas Biomass production Biomass conversion technologies Bioenergy & Biofuels Other associated process, i.e. co-products Environmental technologies Just the production of biofuels at competitive costs is not sufficient now beyond yield We need to understand biofuels externalities and energy balances 32

34 Policies and enabling environment Sectoral policies affecting ethanol Energy Transport Agriculture Environment Conservation of biodiversity Economics etc 33

35 Bioelectricity forecast from sugar cane and possible competition for bagasse in the near future opportunity costs 10 8 bagasse (75%) bagasse (75%) + straw (50%) 7,2 10, ave.mw 6 4 3,4 5,2 4,2 5, / / / / / / /13 34

36 CERTIFICACAO Biofuels Certification The Babel of Certifications EU Directives European Union PBCB Brazilian Biofuels Program Certification Brazilian Goverment Ethanol Several certification initiatives are under discussion now How to attend to all certification discussions? Biofuels Certification Meó Consulting Team German Government Sustainable Production of Biomass Cramer Commission Dutch Government RTFO Renewable Transport Fuel Obligation UK Government RTSB Round Table on Sustainable Biofuels Switzerland National Certifications SEKAB, GREENERGY Sweden, United Kingdom 35

37 Collaboration on C&I - Certification Some issues to consider... 36

38 Brazilian frameworks supporting S&T&I in biofuels Good examples from Pro-Alcool - ca. US$ 2 billion 30 years Federal level - Ministry of Science & Technology - Agencies CNPq and FINEP Ministry of Education - CAPES State level SP - the case of FAPESP Innovation law in BR being implemented facilitate interactions between academia and private sector 37

39 Players and investments in sugarcane & ethanol R&D in Brazil. Crops and biofuels R&D initiatives and experience More than 15 universities, 14 research centers and 150 researchers focus on biofuels in only one initiative (Bioetanol project) Only in CTC (sugarcane technology center) more than 300 people work in R&D activities Efforts are made to share knowledge between universities and research centers (ex: Bioetanol project, conferences) International participation in R&D initiatives (Bioethanol Project, Oxiteno, Votorantim) Country is a world leader in the production of sugarcane plants capital goods (ex: Dedini) Innovation and scientific achievement on biofuels feedstocks Productivity improvements through sugarcane genetic modifications, from 55 tons/ha in 1970 to 75 tons/ha in 2006 Almost 300 sugarcane varieties developed by CTC Investments in R&D Almost 80% of investments in biofuels in Brazil come from the private sector In 2005 MCT (Science and Technology Ministry) invested US$840 MM in R&D, 21% of which went to agriculture-related research (US$176MM) US$105 MM to be invested between 2003 and 2008 in agroenergy by MCT Votorantim invested US$ 40 MM in biotechnology in the last 4 years developing 15 transgenic sugarcane varieties 38

40 Biofuels framework for innovation Academia Private Government Universities Innovation centers Agencies Foundations R&D Incubators Innovation agencies Advisors Partners networks Media Business partners Seminars Tech parks Brazil Business pipeline International partners International exchange 39

41 Biofuels Technology Piracicaba, SP 40

42 City Biofuels Technology Park ESALQ 3 km The Park

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44 Concluding remarks - Four pillars on ethanol competitiveness 1/2 Need for a global market for biofuels Improving the logistics Planning the sugar cane expansion sustainably Innovation 43

45 Deploying the global opportunities can t afford not to have 2/2 Concentration and concerted efforts: focus and scale Continuity: 30 years of investments worthwhile the Brazil case Complementarity: bioenergy sources and expertise need for an interdisciplinary approach Commitment: to make a change Coordination 44