Biofuels as a business

Ministry of Development, Industry and Foreign Trade - Brazil

Sugarcane numbers – Brazil (2008)*

• GDP: US$ 28 biLarger than the GDP of 110 countries!

• Financial transactions: US$ 86 bi

• Tax’s collection: US$ 10 bi

• 1,28 mi of formal workers~ 2,15% of brazilian jobs

* Source: Markestrat – Mapeamento e Quantificação do Setor Sucroenergético em 2008

Protective equip.

53,80

Diesel e Lubrif.

1.054,01

Pesticides

768,44

Fertilizers

2.259,09

agricultural lime

50,56

Auto p./Maint.

2.851,19

Tractors

320,87

Harvesters

426,52

Implements

425,66

Trucks

331,36

Trailer

233,36

ResellersCooperatives

477,54 pesticides

SugarcaneProduction

Own:6.387,91

Suppliers:5.121,84

Protective equip.

38,96

Labor. products

15,46

Autom./Instrum.

269,76

Equipments

3.400,99

Electrical instal.

366,00

Building

594,75

Prod.Químicos

463,82

Assembly/Maint.

1.110,35

Chemicals

94,19

Sacks

45,42

Big bags

14,67

Ethanol

12.417,36

MILLS Total

22.639,17

Sugar

9.765,08

Bioelectricity

389,63

Carbon credit

3,48

Yeast e Additiv.

63,62

Bioplastic

Beverage ind. and cosmetic

Distributor

8.624,05

Wholesaler

743,89

Distributor

Animal feed industry

retail

3.259,26

Gas station

11.114,50

Food Ind.and Others

FreeConsumer

SpecialConsumer

EN

D C

ON

SU

ME

R

Agentes Facilitators (service providers) – 13.275,58

Before farms

9.252,42On Farms

11.509,75After Farms

52.795,27

Sugarcane Sector - Financial transactions - US$ 86 bi

More than ¾ of financial transactions are after farms.

Ela

bo

rati

on

: N

eves

, Tro

mb

in, C

on

soli,

200

9.

Sugarcane and ethanol Extraction and oil products

Source: Moraes et. al. with data from RAIS (2007) e PNAD (2007)

Employment - 2007

Source: Oliveira, data from PNAD.

WORKERS REMUNERATION EVOLUTION

Farm workers - salary who had the biggest increases (%)(1999 – 2007)

Sugarcane RiceCassavaCornCoffeeSoy

Comparing the value of production per acreage, the value of sugar cane is significantly higher than that of other crops such as soybeans and corn.

Source: Impacto da Produção de Cana-de-Açúcar sobre as Condições Sociais das Regiões Canavieiras André Luis Squarize Chagas

Alphabetization index

Source: A Sustainability Analysis of the Brazilian Bio-ethanol. Walter et al

São Paulo – Comparison between municipalities with and without significant sugarcane activity

Average: 90,6

Average: 88,6

Average: 0,532

Average: 0,516

Gini coefficient

Sugarcane productivity

Ethanol productivity

Note: 07/08e estimate Source: UNICA.

To

nn

es o

f su

gar

can

e p

er h

ect

are

Kilo

liters per h

ectare

Average Productivity of Ethanol Production in Brazil

Annual growth rate2,7%

Annual growth rate1,6%

BEGINNING BEGINNING PROALCOHOLPROALCOHOL TODAYTODAY

CRUSHING CAPACITY (TCD) - 6X78” CRUSHING CAPACITY (TCD) - 6X78” 5,500 14,000

FERMENTATION TIME (H) FERMENTATION TIME (H) 24 6 - 8

BEER ETHANOL CONTENT (BEER ETHANOL CONTENT (OOGL) GL) 6.5 > 9.0

EXTRACTION YIELD (%SUGAR) - 6 MILL UNITSEXTRACTION YIELD (%SUGAR) - 6 MILL UNITS 93 97

FERMENTATION YIELD (%)FERMENTATION YIELD (%) 80 90

DISTILLATION YIELD (%)DISTILLATION YIELD (%) 98 99.7

TOTAL YIELD (LITER HYDR. BIOETH./TON CANE) TOTAL YIELD (LITER HYDR. BIOETH./TON CANE) 66 86

TOTAL STEAM CONSUMP. (KG STEAM/T CANE) TOTAL STEAM CONSUMP. (KG STEAM/T CANE) 600 380

STEAM CONSUMPTION - HYDR.STEAM CONSUMPTION - HYDR. (KG S/LITER) (KG S/LITER) 3.4 2.0

STEAM CONSUMP. - ANHYDR. (KG S/LITER)STEAM CONSUMP. - ANHYDR. (KG S/LITER)

4.5 2.7

BOILER – EFFICIENCY BOILER – EFFICIENCY (% LHV)(% LHV)

PRESSURE (BAR) / TEMPERATURE (ºC)PRESSURE (BAR) / TEMPERATURE (ºC)

66 89

21 / 300 120/ 540

SURPLUS BAGASSE (%) - BIOETHANOL MILLSURPLUS BAGASSE (%) - BIOETHANOL MILL UP TO 8 UP TO 78

BIOMBIOMETHANE FROM STILLAGE (NMETHANE FROM STILLAGE (NM33/LITER BIOETH.)/LITER BIOETH.) - 0.1

STILLAGE PRODUCTION (L STILLAGE/L BIOET) STILLAGE PRODUCTION (L STILLAGE/L BIOET) 13 0.8

RESULTS OF INDUSTRIAL TECHNOLOGICAL EVOLUTION IN THE SUGAR & BIOETHANOL SECTOR – 2007

TECHNOLOGICAL EVOLUTION OF SUGARCANE INDUSTRY

320

1,6

2,0

15.0002009

98

92

87

Source: Denini

Innovations as a result of biofuel investment

Flex-fuel cars

Ethanol mills

Ethanol-powered plane

Flex thermoelectric plant

Sugarcane planter

Bioeletricity

Seedling production

Sugarcane harvester Steam turbines

1979 to 1989: bus and truck with the ethanol engine in Brazil

The Brazilian experience

Nowadays: testing of new engines

Benefits of cogeneration and distributed generation of eletricity

Experience and know how

Units are self-sufficient in energy

Reduced construction period

Construction in 24-30 months

Renewable and clean energy

Low environmental impact

Provide carbon credits

Synergy with hydro production pattern

Bioelectricity is produced during the dry season

Smaller projects and broader range of investors

Eliminate risks of delay and construction problems

Strengthen the national equipment industry and create jobs

Location close to main load centers

Sources: PSR, Cogen and UNICA

Bioeletricity

Bagass

sugarcane

sugar

ethanol

Genetic improvement of sugarcane.

Each year, close to six new varieties are released to the market and the total number of varieties is currently close to 500.

Best techniques for seedling production of sugarcane

Source: Unica

Green Polyethylene CycleFrom cradle to cradle

Ethylene CH2=CH2Through the dehydration, the ethanol is transformed in ethylene

Ethanol CH3-CH2OHAt the distillery, the sugar juice is fermented and distillated to produce ethanol

SugarcaneThe sugarcane crop metabolizes the CO2 to produce sucrose (85 t/ha; 14% sugars + 28% biomass)

Carbon captureThe green polyethylene is transformed in final products in the same unities already existents

Green PE [CH2=CH2]The ethylene is polymerized in polyethylene production unities (3 t PE/ha)

The green polyethylene is 100% recyclable (Mechanical / Incineration)

Very Favorable Ecoprofile

Recycling

Captures and Fixes 2,5 t CO2/t PE

Source: Brasken

Source: Unica

Source: Unica

Brazilian Expertise

•Mills Projects, design, production, sales, installation and maintenance. Turn-key mills and all machinery and equipments to biofuels production. •Research, development, technology innovation and totally services for biofuels.•Agriculture technology generation to production materials for renewable fuels. •Technologies for ethanol and biodiesel production. •Cogeneration Energy

Products, Services and Brazilian Technology Available

Ethanol production in the world with Brazilian technology

New projects of distilleriesanywhere in the world

• Economical feasibility studies and analysis of area/soils and weather feasibility

• Supply of sprouts and productive & resitant genetic diversity

• Technology for plague control and combat

Products, Services and Brazilian Technology Available

Machinery and Equipment for cutting, loading and transportation

• Consulting and follow-up of all process of the productive chain

• Professional Qualification

Environmental profits

•Carbon sequestration•Lower level of emission in the consumption•Global warming

Political aspects

•Democracy•Energy security

Social aspects

•Jobs creation•Income deconcetration

Economic aspects

•New component of demand•Impact in the trade balance•Monetization of least developed countries

Renewability

•Short cycle of production•Man-controlled process

Why Biofuels?