Sustainable Bioenergy: Challenges and Opportunities

1
Sustainable Bioenergy Challenges and
Opportunities
Keynote address

• Suani Teixeira Coelho
• São Paulo State Secretariat for the Environment
• Deputy Secretary
• suaniteixeira_at_sp.gov.br
• Bonn, 12-13 October, 2006

2
Outline

• Brazilian Ethanol Program
• Ethanol Fuel (Social and Environmental
  Sustainability)
• Replication of Brazilian Ethanol Program
  Possible or not ?

3
Some Myths about Ethanol

• Brazilian experience is unique
• incompatible with existing fleets
• low energy balances of biofuels
• high pollutant emissions
• competition with food for land, unsustainable
  practices, deforestation
• only subsidized production is possible
• energy efficiency alone would preserve oil
  resources and fulfill Kyoto targets.

4
The Brazilian Alcohol Program

• The world largest commercial program on biomass
  916 billion liters produced in 2005 2,5 billion
  liters exported)
• Decision (1975) from Brazilian Federal Government
  to produce ethanol in addition to sugar (from
  sugarcane) objective of reducing petroleum
  imports (High prices).
• High-octane fuel in vehicles, replacing
  lead and/or MTBE.
• 4,000,000 cars running on pure
  (hydrated) ethanol in Brazil
• 1,800,000 flex-fuel vehicles (both
  ethanol and gasoline, any blend)
• all gasoline blended with (anhydrous) ethanol 20
  to 25 of ethanol in volume basis gasohol
• Nowadays - economically competitive to gasoline

5
Compatibility of Existing Fleets with
Ethanol-gasoline Blend
- - - - - - - - - - - - - - - - - - - For any
vehicle NN - - - - - - - - - - - - - - - - - -
- - - - - For relatively new fleets (10 15
years old) - - NN- - -
- - - - - - - Brazilian Application - PN - - - -
- - - - - - - - NN - - - - - - -
- - - - - - - - - - - - - - - - - USA Application
PN - - -- - - - - - - - - - -
- NN-
- - - - - - - - - - - - - - - - - Brazilian
Application PN- - - - - - - - - - - - -
- Not Necessary
- Probably Necessary
Source ANFAVEA, 2005
6
Ethanol Production Costs (Brazil)

• Production costs US0.180.25 per liter of
  gasoline-equivalent
• average export price of ethanol (2001-2003) US
  0.23 per liter
• Initial investment for new plants US 60 million
  (2005 prices)
• 40 new plants in São Paulo State 100 in Brazil
• Average processing capacity 2.16 million tonnes
  of sugarcane per year
• average yield 79.39 liters of anhydrous ethanol
  equivalent (82.86 liters of hydrous) per tonne of
  sugarcane (Sao Paulo 100-110 liters/ha)
• average price paid per tonne of sugarcane is
  US11.4 (UNICA, 2005)
• plant lifetime of 25 years
• feedstock cost of US 0.143 per liter of ethanol
• investment cost around US 0.017 per liter of
  ethanol.

2006 ? ALL NEW INVESTMENTS ARE PRIVATE
7
Brazilian ethanol international competitiveness
Ethanol Learning Curve (Hydrated Ethanol)
Source Nastari, 2005 updated
8
Ethanol international competitiveness

• WHY BRAZILIAN ETHANOL IS COMPETITIVE?
• High agricultural/industrial yields
• efficient technologies
• 150 different varieties of sugarcane for
  different types of soil
• Use of renewable energy source in the process
  (only sugarcane bagasse for cogeneration)
• Favorable energy balance 8-101

9
GHG emissions from different types of ethanol
sources
Sources Macedo et. alii, 2004, UK DTI, 2003 and
USDA, 2004
10
SUGAR CANE - 5 million ha
- 60,000 producers -
all-year-round harvest
N-NE (20 land) harvest sept/march
10 of total cultivated land 1 of total land
available for agriculture
C-S (80 land)
harvest april/november
11
Sugarcane Expansion and Land Use in Sao Paulo
State2005

• São Paulo State
• Total territory 24,800,000 ha
• Used 22,000,000 ha
• (cattle, agriculture, native forests and
  reforestation)
• Cattle (2005) 10,000,000 ha
• Orange (2005) 672,000 ha
• Sugarcane 3,700,000 ha
• (5.5 billion liters of ethanol and 17 million
  tones of sugar)
• Existing Environmental Legislation for Land Use
  controls the use of Native Forest Land and
  Riparian Forests

12
Land use in Sao Paulo State sugarcane crops
13
Sugarcane Expansion in São Paulo (1)Sugarcane vs
food crops
Source São Paulo State Agriculture
Secretariat-Database (www.iea.sp.gov.br)
14
Sugarcane Expansion in São Paulo (2)Sugarcane vs
cattle
Source São Paulo State Agriculture Secretary
Database (www.iea.sp.gov.br)
15
Cattle Evolution in São Paulo State
Trend to more intensive cattle-breeding
Source São Paulo State Agriculture Secretary
Database (www.iea.sp.gov.br)
16
Control and Enforcement of Environmental Impacts
on Sugarcane Ethanol Production

• Legislation improved and enforced specially in
  the State of São Paulo (60 of all Brazilian
  sugarcane mills)
• Discharge of effluents with high organic loads
  replaced by controlled fertirrigation practices
  (CETESB)
• Harvest burning practices are being phased-out,
  through a strict legal enforcement
• Land use strictly controlled preserving riparian
  forests and other natural ecosystems and avoiding
  deforestation
• Industrial sugarcane and ethanol plants have
  their atmospheric emissions controlled
• Spill offs and other accidents are rare and of
  low impact

17
Social Aspects

• Job creation (700,000 jobs in Brazil manly in
  rural areas)
• Legislation social/labor issues
• For example Forbidden manual harvesting of green
  sugarcane
• Payments for rural workers on sugarcane crops are
  higher than other sectors

18
Agroindustrial models in Brazil
19
Perspectives for the Replication of Brazilian
Ethanol Program in Other Developing Countries
20
Perspectives for the Replication of Brazilian
Ethanol Program in Other Developing Countries

• Feasibility studies production costs?
• Technological aspects
• Existing technology for alcohol production
  efficient and commercially available (Brazil).
• Cogeneration process from bagasse ? efficient
  systems commercially available (Mauritius/Brazil).
  
• Local capacity building infrastructure
• Adequate policies (ex. Mandatory blend like in
  Brazil and Malawi)
• Environmental aspects sustainability is
  possible!
• Opportunities from the Clean Development
  Mechanism ? good option for developed countries,
  collaborating for the sustainable development of
  poor countries.

21
Biofuels, developed and developing countries

• Win-win situation for all !!
• Thanks!
• Obrigada!