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BRAZILIAN SUGARCANE INDUSTRY ASSOCIATION
Joel [email protected]+1 (202) 506-5299
Brazil’s Sugarcane Ethanol Industry
2
OUTLINE
• Sustainable Solutions Today – Gasoline is the “alternative”
– Ethanol uses 1% of arable land
– +80% GHG emissions reduction
• Advanced Biomass Feedstock– Carbon absorbing machine
– High and growing yields
– Continuously improving technologies
• Food vs. Fuel debate?
– Unsustainable oil
– Abundant land
– “Productivity stupid”
3
Introduction: Who, What, Where
4
UNICA
• The leading sugarcane industry association, representing 110 producers and mills in Brazil
• Responsible for 60% of all ethanol and sugar production in Brazil
• Emerging as a leader in the generation of bioelectricity
• International presence, now in Washington & Brussels, to engage in constructive dialogue
5
LOCATION
South-Central region represents 87% of sugarcane
harvest
South-Central region represents 87% of sugarcane
harvest
Sources: NIPE-Unicamp, IBGE and CTC
6
SUGARCANE HARVEST (2008/09)
Source: CanaSat, INPE, CTC & UNICA
7
PRODUCTS
8
our sustainable solutions today
9
Sugarcane is #1 source of renewable energy
with 16% of total energy consumed
Sugarcane is #1 source of renewable energy
with 16% of total energy consumed
RENEWABLE ENERGY RATIO
9
Source: Ministry of Mines and Energy’ BEN (2008 preliminary estimate)
Gasoline
GASOLINE IS NOW THE ALTERNATIVE FUEL
Ethanol
10
Source: ANP & UNICA
Accumulated Sales of Flex-Fuel Vehicles
Domestic Ethanol Sales (E-100)
DEMAND IS DRIVEN BY CONSUMER CHOICE
11
90% of new cars sold are FlexFuel,
representing about 25% of fleet
90% of new cars sold are FlexFuel,
representing about 25% of fleet
Source: ANP & ANFAVEA
12
Note: Brazilian Gasoline has 25% ethanol content. There is no "pure" gasoline available in Brazil.
ETHANOL VS. GASOLINE PRICES (2007)
Sources: ANP, UNICA, Reuters
Pri
ce
at
the
Pu
mp
(R
$/L
ite
r)
Petroleum
Gasoline (E-25)
Ethanol (E-100)Producer’s Price
GASOLINE NOT FOLLOWING OIL’S RISE
13Sources: IMF, IPEA, CEPEA/ESALQ, ANP
14
Millions of Hectares (2007)
%
total land
%
arable land
BRAZIL 851
TOTAL ARABLE LAND 354.8
1. Total Crop Land 76.7 9.0% 21.6%
Soybean 20.6 2.4% 5.8%
Corn 14.0 1.6% 3.9%
Sugarcane 7.8 0.9% 2.2%
Sugarcane for ethanol 3.4 0.4% 1.0%
Orange 0.9 0.1% 0.3%
2. Pastures 172.3 20% 49%
3. Available area Total arable land – (crop land + pastures)
105.8 12% 30%
1% OF ARABLE LAND DISPLACES 50% GASOLINE
Sources: IBGE, UNICA
15
an advanced biomass feedstock
Note: Reductions represent well-to-wheel CO2-equivalent GHG emissions avoided from unit of ethanol compared to gasoline, calculated on a life-cycle basis.
AVOIDED GREENHOUSE GAS EMISSIONS
16Source: IEA – International Energy Agency (May, 2004), based on a review of recent articles.
RFS ADVANCED
BIOFUEL
U.S. RENEWABLE FUEL STANDARD
17Source:
SUGARCANEETHANOL
ENERGY BALANCE
18Source: World Watch Institute, compilation of various sources.
Liters per hectare
AVERAGE PRODUCTION YIELDS
19Source: IEA – International Energy Agency (2005), USDA (2008), MTEC, MAPA, ICONE, UNICA
20
A CARBON ABSORBING MACHINE?
2 METERS
3 METERS
2 METERS
3 METERS
1 METER
1 METER
4 METERS
22-36 tons C/ha
3-5 tons C/ha
5-7 years
Source: Polo de Biocombustivel (Weber Amaral) from various sources.
21
Annual tons carbon per hectare
3-8 t C/ha3-8 t C/ha 22-36 t C/ha22-36 t C/ha
CANE VS. PASTURES: CARBON UPTAKE
Source: Polo de Biocombustivel (Weber Amaral) from various sources.
22
BREAKDOWN OF SUGARCANE’S ENERGY
Source: UNICA, CTC.
Assumptions based on the following values: 1 ton of sugar cane produces 250 kg of bagasse e 204 kg de straw, 1 ton of cane (only bagasse) generates 85,6 KWh for exporting, 1 ton of cane (bagasse + straw) generates 199,9 KWh for exporting, the straw inferior calorific value = 1,7 bagasse inferior calorific value, capacity factor = 0,5. Note: ave.MW = MW firm capacity.
GROWING ROLE OF BIOELECTRICITY
23Source: UNICA, COGEN.
10,000 MW
INSURANCE AGAINST SUBSIDIES…
Exports
Domestic
SU
GA
RE
TH
AN
OL
32%
51%
$20 Billion $45 Billion
24
Domestic
SU
GA
RE
TH
AN
OL
MW 16%
Source: UNICA
25
the food vs. fuel debate…
Petroleum
Agricultural non-food raw materials
Food
Notes: Deflated values for March 2008 with CPI base 100 in January 1995; “Agricultural non-food raw materials” include cotton, wood.,wool, timber and leather.
FOOD VS. OIL PRICES
26
Oil prices jumped +500% while food prices
increased 36%
Oil prices jumped +500% while food prices
increased 36%
Source: IMF, US Bureau of Labor Statistics, UNICA
Per
cen
tag
e In
crea
se
Note: “Others” include the harvested area for the remaining crops like fruits, fibers, nuts, pulses, roots and tubers, spices and other vegetables .
WORLD LAND USE
27
The world’s total harvested agricultural area is 1.4 billion hectares.The world’s total harvested agricultural area is 1.4 billion hectares.Only 15 million hectares are devoted to ethanol production. Only 15 million hectares are devoted to ethanol production.
Source: FAO, F.O. Licht, Datagro, USDA, EC, UNICA
28
Millions of Hectares (2007)
%
total land
%
arable land
BRAZIL 851
TOTAL ARABLE LAND 354.8
1. Total Crop Land 76.7 9.0% 21.6%
Soybean 20.6 2.4% 5.8%
Corn 14.0 1.6% 3.9%
Sugarcane 7.8 0.9% 2.2%
Sugarcane for ethanol 3.4 0.4% 1.0%
Orange 0.9 0.1% 0.3%
2. Pastures 172.3 20% 49%
3. Available area Total arable land – (crop land + pastures)
105.8 12% 30%
1% OF ARABLE LAND DISPLACES 50% GASOLINE
Sources: IBGE, UNICA
29
FOOD PRODUCTION INCREASING
Area
Sources: IBGE, UNICA
Note: 1) 2008 is estimated data; 2) Grains include rice, corn, wheat, soybeans, etc.
Brazil’s food production volumes doubled in the
last decade mainly due to yield gains
Brazil’s food production volumes doubled in the
last decade mainly due to yield gains
Note: 1) 2007 * - estimated data ; 2) Sugarcane include cane destined for ethanol production, sugar production and other uses (animal feed, spirits, etc)
PRODUCTIVITY FOR BRAZIL’S TOP THREE CROPS
30
Sources: IBGE, UNICA
Ethanol
Sugar
Area
SUGAR & ETHANOL PRODUCTION INCREASING
31
Sources: IBGE, UNICA
Brazil’s sugarcane ethanol volumes have
increased 130% and sugar more than 350%
Brazil’s sugarcane ethanol volumes have
increased 130% and sugar more than 350%
100 countries could supply biofuels to 200 nations, while currently 20 oil producers provide fossil fuels today.
WORLD SUGARCANE MAP
32
Sources: British Sugar
BRAZILIAN SUGARCANE INDUSTRY ASSOCIATION