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INVESTING IN BIODIESEL PRODUCTION BIODIESEL
AUCTIONS FRANCISCO ROMÁRIO WOJCICKI Deputy
Executive Secretary of Mines and Energy
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PLAN OF PRESENTATION

• Brazilian Land Use Today
• A picture of agriculture in Brazil
• Brazilian Agriculture cropped area evolution,
  production and productivity
• Biodiesel
• Brazils Biodiesel map
• Marketing Auctions
• Prospects for the Biodiesel in Brazil and
  opportunities for investment
• Ethanol
• Brazils Ethanol map
• Marketing Rules
• Prospects for the Ethanol in Brazil and
  opportunities for investment
• Infrastructure to Flow off the Production
• Growth Acceleration Programme - PAC and the
  Alcoholducts planned for the South-Central Region

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BRAZILIAN LAND USE TODAY
Total Area 851 million of hectare

• No-Arable Areas
• Citys, rivers and lakes
• Areas not suitable for cultivation
• Areas of conservation (forests, indigenous areas
  etc.)

Source MAPA e IBGE. Development by MME.
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A PICTURE OF AGRICULTURE IN BRAZIL
Cropped Area
Production
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BRAZILIAN AGRICULTURE CROPPED AREA EVOLUTION,
PRODUCTION AND PRODUCTIVITY
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BRAZILS BIODIESEL MAP(1)
More than 35,000 posts sell biodiesel in Brazil
FAMILY AGRICULTURE 100 THOUSAND FAMILIES
BENEFITED
ANP National Agency of Petroleum, Natural Gas
and Biofuels
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BIODIESEL REGULATION

• Law 11.097/05 It establishes minimum percentage
  of biodiesel be mixed with diesel and the
  monitoring of inclusion of the new fuel on the
  market.

Regulation Decree 5.448/05.
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BRAZILS BIODIESEL MAP(2)

• Current production capacity is sufficient for B5

Source Production monthlystatistics ANP
Capacity - MME
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ANP AUCTIONS (REGULAR SUPPLY OF THE MARKET)

• Current Marketing Rules
• All the biodiesel necessary to supply the
  mandatory mixture is acquired by producers from
  Petrobras and Refap in Public Auctions.
• Last Auctions

ANP National Agency of Petroleum, Natural Gas
and Biofuels
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ANP AUCTIONS (REGULAR SUPPLY OF THE MARKET)

• 2008 Auctions
• 6 biodiesel auctions were promoted by ANP
• Invoiced revenue US 1,5 billion
• Volume 1,04 billion liters were auctioned to be
  delivered in 2008.
• The auctions rule establishes that 80 of this
  volume is restricted to biodiesel producers with
  the Social Fuel Certificate. As a result, the
  final average market share of these producers was
  95.
• 2009 new biodiesel auctions
• US 1,9 billion is expected to be commercialized
  in 2009.
• It represents about 1,3 billion liters.
• 80 of this volume is restricted to biodiesel
  producers with the Social Fuel Certificate.

ANP National Agency of Petroleum, Natural Gas
and Biofuels
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ANP AUCTIONS (REGULAR SUPPLY OF THE MARKET)

• Investments in the production chain and marketing
  of biodiesel are essentially driven by private
  initiative
• There are lines of credit to finance the
  construction of new power plants
• There is potential to expand the installed
  generation capacity and the logistic
  infrastructure with focus on the export market is
  good.

ANP National Agency of Petroleum, Natural Gas
and Biofuels
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MID-SOUTH REGION CROPS LOCATION 2005/2006
More than 2,000 km far from the Amazon Forest
boundaries
Region N-NE 9 of the Production
Iraquara - Bahia
Amazon Forest
Private sector investments in new mills for
(2008-2012) that surpass US 33
billion (agriculture and industry phases)
A Region that grows sugarcane crops for more than
50 years with an increasing productivity
South-Central Region 91 of the Production

Sugarcane Crops CANASAT Project
Atlantic Forest of Brazil

Source IBGE (Preservation Areas) and CTC
(Sugarcane Crops)
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BRAZILS ETHANOL MAP
Exports in 2007 amounted to 15.7 of national
production of ethanol
Cumulative export of alcohol Comparison between
2005, 2006 and 2007
Source ALICE/MDIC
Quantity (liters) Million

• 2007
• Production 22.5 billion of liters
• Export 3.53 billion of liters
• 4.2 million hectares (ethanol)

The production of sugar cane and ethanol will be
recorded in 2008/2009, acoording to industry.
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FLEX-FUEL VEHICLES INTERNAL MARKET EACH TIME
HIGHEST
From zero to 80 in 3 years!
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FLEX-FUEL VEHICLES INTERNAL MARKET EACH TIME
HIGHEST
2008 Estimates
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PAC ANSWER TO THE CHALLENGE OF THE INCREASING IN
LOGISTIC INFRASTRUCTURE
Alcoholduct
Alcoholduct
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INVESTMENTS IN INFRASTRUCTURE
Development the infrastruture of ducts to flow
off the production of ethanol in Brazil is
fundamental to the competitiveness of the
national product.
Target 1,150.00 km of ducts
STATE MG / SP / GO
DATE OF CONCLUSION 12/31/2010
TOTAL INVESTIMENT EXPECTED US 1,360 MILLION
INVESTIMENT EXPECTED IN 2007-2010 US 500 MILLION
INVESTIMENT EXPECTED AFTER 2010 US 860 MILLION

• Feasibility study completed. Approved by
  Executive Direction on 02/07/08 for the excerpts
• S. Sebastião - Guararema - december
  2010.
• Guararema - Paulínia - december 2010.
• Paulínia - Ribeirão - Uberaba - december 2010.
• Senador Canedo - Buriti Alegre - Uberaba
  december 2012.
• Santa Maria da Serra Paulínia - december 2016.

MG Minas Gerais SP Sao Paulo GO Goias.
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INVESTMENTS IN INFRASTRUCTURE
Feasibility Study to the Alcoholduct that will
interconnect the terminal of Campo Grande (MS) to
the Port of Paranaguá (PR)
Development the infrastruture of ducts to flow
off the production of derived from oil to the
Central-West region and the production of ethanol
of that region to the Port of Paranaguá.
STATE
MS / PR

• About possible Alcoholduct on the same track
  (C.Grande-Paranaguá)
• Term Technical Cooperation between Petrobras, MS
  and PR was signed in 03/20/2008 to do the
  feasibility study with 90 days' time.
• Initial meeting occurred on 04/16/08, with the
  presentation of the preliminary study that should
  change from new premises of the market.

MS Mato Grosso do Sul PR Paraná.
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Thank You!
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