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Biofuels and sustainability issues –Opportunities for biomass production & conversion through a South-
South agenda
Weber Amaral, PhDBrazilian Center for BiofuelsUniversity of Sao Paulo – Brazil
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Content
1. Brazilian Center for Biofuels – Polo Nacional de Biocombustiveis
2. Outlook scenarios for bioenergy
3. Global problems – regional solutions
4. Conclusions
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Brazilian Center for Biofuels`s background
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The roles and functions of the Brazilian Center for Biofuels:“ A Think Tank” @ the University of Sao Paulo
Contribution to:
•Innovation & Technology transfer: catalytic and network role
•Policy making
•Awareness raising and capacity building
•Strategic and applied research
•Mitigation of GHGs and carbon projects
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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 20% gasoline consumption in 10 years
EU - Directive 2003/30/EC & Biofuels Vision 2030
Kyoto targets and voluntary commitments
Cost effective substitution and future technologies available….
Competitive prices and being renewable
Key biofuels drivers
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Biofuels and energy security issues
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Who is willing to pay?Price differences
The externalities of biofuelsneed to be properly
determined
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According to a new FAO report, The State of Agricultural Commodity Markets (SOCO), the impact of commodity price fluctuations is greatest in the poorest countries of the developing world. "An estimated 2.5 billion people in the developing world depend on agriculture for their livelihoods," SOCO points out.
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The debate
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Energy demand in rural areas: still a problem to solve.....
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Roles andfunctions
of government,private sector and
NGOs
Gasoline/DieselQuerosene
Food
Ethanol& biodiesel
Jobs
WindEnergydemand
GHGs
Nuclear
Oil reserves
Economic growth
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System dynamics and their multiple interactions
Hydro
Hydrogen
Trends inconsumption
Global awareness
Environmentaltaxes & policies
Energysupply Land use
patternsNative
vegetation and forests
Quality of jobs
Diversification Biodiversity
Climatechange
Foodsafety
Quality of lifeand
livelihoods
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2. Understanding key drivers of energy supply and demand
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The supply hypothesis
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The impact on prices hypothesis
19Source: Garten Rothkopf
The increased use of biofuels have implications in social, economical and environmental variables
Projected investments in renewable energy and biofuels
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Brazilian structural factors leading to a competitive bionergy business
• At least two biofuels of global relevance – ethanol and biodiesel
• And one more under-developed potential: biogas
• Strong forestry sector
• Competitive production costs versus oil
• Potential for the development of co-products – oil chemistry and
ethanol chemistry
• No IPRs barriers for innovation until recently…
• Early stages of policy development – creation of global markets
for biofuels
• Long tradition in ethanol and sugar, although just two groups went
public (IPO)
3. Global problems – regional solutions
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The Brazilian economy is diversified and a number of sectors have built important competitive advantages
Diversified economic sectors
• Banking: Brazilian bank are considered one of the most competitive in the world in terms of productivity and use of technology
• Aerospace. Embraer is the 3rd largest airplane manufacturer in the world, leader in regional airplanes.
• Automotive: Most of the global OEMs are present in Brazil. Leaders are GM,Fiat, VW, Ford, Mercedes and Toyota. 2nd largest producer of busses
• Telecom: one of the most competitive markets in the world. It was deregulated considering total competition in local and long distance. Large European and
American operators came in the privatization.
• Petroleum. ADRs represent about 17% of the US Capital Market. Petrobras’ is the most traded one. The company is the leader in deep water oil extraction,
• Energy. One of a few contries self-sufficient in energy. Most of our eletricenergy comes from hydro plants and we can still double our capacity. 77% of
the cars produced in Brazil are flexfuel (etanol or gasoline)
• Agribusiness: world largest exporter of beef, soybeans, chicken, etanol, sugar, orange juice, coffee. Leader position as well in pulp and paper, granite, fruits
etc.
• Mining/Steel. CVRD is the largest iron ore producer in the world, and many of the steel producers are world class and lowest cost
• Heavy construction: Some Brazilian companies are becoming global players in the US, Middle East, Europe, Africa and Latin America (Odebrecht and OAS
10%
40%
50%Services
Industry
Agriculture
GDP(PPP$B)
1,577
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Source: FAO, 2007
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Credits of Credits of
CarbonCarbon
5,4 million ha
72 thousand growers
334 mills & destillaries
(Operation & projects)Harvest
380 million tons
ETHANOL14 billion liters
SUGAR24 million tons
BAGASSE
BioplasticBioplastic
Ethanol
Food
PharmacyLisine
Derived
Sugar cane value chain
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3 m
2 m
1 m
0 m
1 m
2 m
3 m
4 m
Energy factory
• 1/3 sugar1/3 fibre1/3 leaves
• 1ha = 9.000 l ethanol - 65 b of oil• 6.5 MM ha = 490 MM barrels oil
• 6.5 MM ha sugar uptake+ 25% emissions from fossil fuels in Brazil.
SugarCane
In Brazil
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There is significant room for new technologies development –2nd generation of biofuels
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Profitability of biofuels depends on:
Cost of feedstocks for production process
Policy frameworks and incentives/subsidies
Improved technologies
Oil prices….
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Can we all live without subsidies?
Source: Global Subsidies Initiative
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FOOD ENERGY
FOOD BIOENERGYFORESTS
•• INTERNATIONAL AND NATIONAL DEMANDS: INTERNATIONAL AND NATIONAL DEMANDS: foodfood & & fuelfuel
•• SUSTAINABLE USE OF LAND AND LANDSCAPESSUSTAINABLE USE OF LAND AND LANDSCAPES
•• ADDED VALUE OF BIOENERGY MATERIALSADDED VALUE OF BIOENERGY MATERIALS
•• INTEGRATION OF AGRICULTURE/FORESTSINTEGRATION OF AGRICULTURE/FORESTS
•• DIVERSIFYING THE PORTFOLIO OF DIVERSIFYING THE PORTFOLIO OF FARMERFARMER´́SS OPTIONSOPTIONS
An land use approach:
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From resources to markets – opportunities
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From resources to markets – opportunities
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Brazil uses aprox. 58 million ha as agricultural land
Source: IBGE 2004
Second generation of biofuels and biorefinaries: an example from the forestry sector
Optimizing the use of biomass
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AFSenergetics
Soya
castor oil
sunflower
cotton
Oil seed
crops
chipsdebarking
chiping
energy
bark
pulping
pulp
paperbiodiesel
wood
BIOREFINERY –An approach for the forestry, pulp and paper industry
ethanol
methanol
extractionhemicelluloses
carbohydrates
fermentation
black liquor
destilation
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Diverisityofpotentialcrops
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BIODIESEL:
Potencial capacity of different cropsNE
Castor oil / Soya /
Palm oil / Cotton
SE
Peanuts/ Sunflower / Castor oil / Soya /
Cotton
CWSoya / Castor oil /
Cotton / Sun flower
SouthSoya / Cotton / Sun flower / Rape
seed
North
Palm oil
Biodiesel production and the supply year-round of these crops
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Potential feedstocks for biodiesel - Brazil
Time for
deployment
Volume
small
medium
large
Short Medium Long
soy bean
animal fat
Jatropha native palm
species
cotton seeds
Peanuts
dairy by-products
palm oil,
sun flower
canola
castor oil
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There is significant room for new technologies development –2nd generation of biofuels – making the necessary bridges with raw materials
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Exploring already current synergies among different areas:the need to make the necessary bridges among them
•Agriculture
•Industry
•Policies
•Frameworks for innovation, investment and mainstreaming
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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 and fiber content & new allometric models
Sources: IBGE & CTC
Atlantic
Rain Forest
Sugar Cane
Pantanal
AMAZON RAIN FOREST
New New
expansion expansion
areas for areas for
sugar cane sugar cane
growinggrowing
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Quantitative approach –
How “green” are
these multiple options?
Collaboration:
Exploring the links
between
Bioenergy & GHGs
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Well-to-wheel GHG emission reduction potential
Source: IEA/OECD 2006
Sugar cane ethanol is the best solution for GHG emission reduction
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Helping Latin America countries to help ourselves
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Policies and enabling environment
Sectoral policies affecting biofuels
•Energy
•Transport
•Agriculture
•Environment
•Conservation of biodiversity
•Economics
•etc
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Does size matters for efficiency
and cost-effectiveness?
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Some issues to consider....
Criteria & Indicators - Certification
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Bioenergy and attraction of capital for innovation
Business
pipeline
Universities
AcademiaAcademia PrivatePrivate GovernmentGovernment
Foundations
Innovation agencies
Innovation centers
R&D
Agencies
Incubators
Tech parks
International exchange
•Internationalpartners
•Advisors•Partners’ networks
•Media•Business partners
•Seminars
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Critical issues to be addressed: the need for aninterdisciplinary approach
•Contribution of solid research to the process of making sound decisions: deploying the full potential of bioenergy sources and feedstocks
•Awareness raising and capacity building – costumer acceptance and potential benefits of biotechnology – making the bridge to the second generation of biofuels
•Enabling environment - necessary links among players: Government – Industry and Academia – entrepreneurship and innovation
•Quantitative and reliable information on their benefits – from carbon and energy balances & supported by outlook studies – need for a global assessment approach
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To better understand some of these complex issues – we can´tafford not to have…
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
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Thanks to
Government of Peru
CEPAL
BCB researchers:
MAPA
USP
www.polobio.esalq.usp.br