LCFS - UNICA Comments to CARB on Sugarcane …...Sugar Cane’s Energy, edited by Isaias Macedo (2005) as well as Sugarcane Ethanol: Contributions to Climate Change Mitigation and

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April16,2009VIAELECTRONICMAILMaryD.NicholsChair,AirResourcesBoardHeadquartersBuilding1001IStreetSacramento,CA95814Reference: ProposedLowCarbonFuelStandardDearMs.Nichols:TheBrazilianSugarcaneIndustryAssociation(UNICA)welcomestheopportunitytoprovidespecificcommentsonCalifornia’sproposedLowCarbonFuelStandard(LCFS).Thisletterexpandsonourpreviouscorrespondence1regardinglifecyclecalculationsofsugarcaneethanolandincludesanumberofspecificrecommendationsconcerningthecalculationsofindirectlandusechange.WeaskthatthisletterandallofitsreferencesbefullyconsideredbytheCaliforniaAirResourcesBoard(CARB)andstaffpriortoapprovaloftheregulation.Theletterisstructuredasfollows:(I)IntroductionofUNICAashavingadirectandsignificantinterestinthisrulemaking;(II)Commentsandrecommendedchangestolifecycleassessmentinputsandassumptions;(III)Commentsandrecommendedchangestolandusechangecalculations;and,(IV)Conclusions.I. INTRODUCTION

TheBrazilianSugarcaneIndustryAssociation(UNICA)istheleadingtradeassociationforthesugarcaneindustryinBrazil,representingnearlytwo‐thirdsofallsugarcaneproductionandprocessinginthecountry.Our125membercompaniesarethetopproducersofsugar,ethanol,renewableelectricityandothersugarcaneco‐productsinBrazil’sSouth‐Centralregion,theheartofthesugarcaneindustry.Brazilistheworld’slargestsugarcane‐producingcountrywithoverhalfabillionmetrictonsofcaneharvestedyearly.

1SeeourletterdatedFebruary10,2009,availableonlineathttp://www.arb.ca.gov/lists/lcfs‐lifecycle‐ws/65‐unica_comments_on_greet‐ca_for_sugarcane.pdf.WealsonotethatUNICArepresentativeshavemetwithCARBstaffonvariousoccasions,mostrecentlyonApril2,2009,wherewediscussedmanyofthesepointsaddressedinthisletter.

UNICA Comments on California’sLowCarbonFuelStandard Page 2

Lastyear,Brazilproducedover31milliontonsofsugarandabout26billionliters(6.8billiongallons)ofethanol.Inaddition,themillsgeneratetheirownpowerfromthesugarcanebiomass.Officialgovernmentdataindicatesthatsugarcanemillsproducedapproximately16,000GWhofelectricity(correspondstoabout3%ofthecountry’sannualelectricitydemand)lastyear.Thankstoourinnovativeuseofethanolintransportationandbiomassforcogeneration,sugarcaneisnowthenumberonesourceofrenewableenergyinBrazil,representing16%ofthecountry’stotalenergyneedsaccordingtoofficialgovernmentdata.Ourindustryisexpandingexistingproductionofrenewableplasticsand,withthehelpofinnovativecompaniesinCalifornia2willsoonbeofferingbio‐basedhydrocarbonsthatcanreplacecarbon‐intensivefossilfuels.II. LIFECYCLEANALYSIS

OurinitialassessmentoftheresultsoftheGreenhouseGases(GHG),RegulatedEmissions,andEnergyUseinTransportationmodel,asmodifiedbyCARB,(GREET‐CA)suggeststhatitwascarefullydone,capturingmanyofthecomplexitiesofouragriculturalandindustrialoperations.ThisisnotsurprisinggiventhatGREET’sdesignershaveworkedwithBrazilianlifecycleassessmentscholars(namelyDrs.JoaquimSeabraandIsaiasMacedo)toincorporateandharmonizesomeoftheuniquecharacteristicsofsugarcaneproductionsystemsandprocessingintheoriginalGREETmodel.However,industrypracticescontinuetoevolve,andwebelieveitiscriticalthatCARB’sanalysisreflectthecurrentstateoftheBraziliansugarcaneindustryandavoidpenalizingthoseplayerswhohavemadeinvestmentsinmoreefficientandsustainablemethodsofproductionsinceoriginalGREETvalueswereestablished.Insomeinstances,GREET‐CA’sdefaultvaluesarefarfromthenormforcurrentBrazilianagriculturalpractices.Lifecycleanalysis,bydefinition,involvesaconsiderablenumberofvariableswithcomplexrelationships,andtheadditionofindirectlandusechanges(discussedinSectionIII)onlyexacerbatesthesecomplexities.Ithasbeentherecommendationofvariousstakeholdergroups(e.g.GlobalBioenergyPartnership,RoundtableonSustainableBiofuels,etc.)tosimplifytheanalysesbyeliminatingsomeaspectsthatareclearlyofsmallerimpactonthemodel’soutput.3Forexample,mostBrazilianandinternationalexpertsdonotconsiderthevolatileorganiccompoundsandotherpollutantsintheGHGcalculations,butdoincludetheinputsofenergyofequipmentsandconstruction.ItappearstousthatGREET‐CAdoestheveryopposite.Reachingaconsensusontheseapproacheswouldfacilitateanalysesandcomparisonsgoingforward.Forsimplicity,wehavehighlightedonlythediscrepanciesthatleadtofundamentalshiftsinmodelmechanismsofthosethathaveasignificantimpactonthevalueofmodeloutputs.2Forexample,Emeryville‐basedAmyrisannouncedlastyearapartnershipwithoneofUNICA’smembercompaniestoproducefuelssuchasdieselandjetfuelforcommercialuses.Seehttp://www.amyris.comformoredetails.WeareawareofsimilareffortsbetweenanumberofotherCalifornia‐basedcompaniesandsugarcanemillsinBrazil.3SeeSustainablebiofuels:ProspectsandChallenges,TheRoyalSociety,January2008,PolicyDocument01/08.Availableathttp://royalsociety.org/document.asp?id=7366


Inthissection,ourcommentsaddress:(A)thechangesthatshouldbeappliedacrossanysugarcaneethanolpathwaybasedonstandard,averagepracticestoday;(B)ongoingindustrypracticesimprovementsthatfurtherreducesugarcaneethanol’scarbonintensity;(C)thetrendsforfurtherimprovementsbasedonexistingregulationsandchanges;and,(D)technicalandpolicyrecommendationstoCARB’ssugarcanefuelpathways.

A. ChangesforanyBrazilianSugarcanePathway

ThefollowingthreechangesbasedoncurrentindustrypracticesarerequestedforanyBraziliansugarcanepathwaythatCARBconsidersintheLCFS.1. SugarcaneFarming.ThestrawyieldfiguresareabovethenormforBrazil’ssugarcane

industry.Insteadof0.19drytonstrawpertonofcane,youshoulduse0.14drytonstrawpertonofcane.4Basedonourexperience,itappearsthatthedefaultvaluesforstrawyieldarepossiblybasedonHawaiian,notBrazilian,sugarcaneaverages.

2. ChemicalInputs.Theenergyvaluesandassociatedemissionsintheproductionoflime(CaCO3)aresaidtobe0.6gCO2/MJ.However,limeproducedinBrazilhassignificantlylowercarbonintensity.5AscorrectlynotedintheStaffReport,Brazil’sbaseloadelectricity(averagemix)iscurrentlyapproximately83%hydroelectric,thoughthemarginalexpansionmixhasbeenmostlynaturalgas.6Withthisinmind,accurateinputvaluesfortheproductionoflimeinBrazilare7kWhelectricity(withgridaveragemix)pertonoflime(notthemixofproductsfoundinsomeproductionplantsoutsideBrazil,includingcalciumoxide)and2.6litersofdieselpertonoflime.Consequently,theGREET‐CAvaluesshouldbeatmost0.11gCO2/MJintheproduction.Weanticipatethatthisamountwilllikelybeshowntobelowerinthecomingmonthsasmorein‐depthresearchinBrazilisunderway.7

3. SugarcaneTransportation.Itappearsthattheenergyrequiredfortransportation,and

consequentlytheemissionsassignedinGREET‐CA,arehigherthanthoseobtainedbyourownground‐truthingmeasurementsinBrazil.Webelievethatthediscrepancymaywellresultfromobsoleteassumptionsrelatedtoloadperformanceofthevehiclesduringfeedstocktransportation.GREET‐CAconsidersonly17tontrucks,whileamajorityofmills

4SeeBiomassPowerGeneration:SugarCaneBagasseandTrasheditedbySuleimanHassuanietal;publishedbyUnitedNationsDevelopmentProgram(UNDP)andSugarcaneTechnologyCenter(CTC)inBrazil,2005.Availableonlineathttp://www.ctcanavieira.com.br/images/stories/Downloads/BRA96G31.PDF5SeeHassuaniopcit.,pg157.Also,seeMacedo,Seabra&Silvain“GreenhousegasesemissionsintheproductionanduseofethanolfromsugarcaneinBrazil”inBiomassandBioenergy(2008).6Evenwhenconsideringadditionalhydroelectricpowerexpansion,emissionscalculationsshouldincludetransmissionimpacts,directandindirectlandusechanges.NewhydroelectricpowerisonlyavailableinremoteandenvironmentallysensitiveareasofBrazil(e.g.Amazonriverbasin),whichrequiresverylongtransmissionlines(over1,000miles)throughhigh‐carbon,high‐biodiversityforests.Forarecentaccountofthis,see“Doubt,AngerOverBrazilDams;AsWorkBeginsAlongAmazonTributary,ManyQuestionHuman,EnvironmentalCosts”inTheWashingtonPostonOctober14,2008.Also,forgeneralbackgroundonBrazil’selectricitygridseeU.S.DepartmentofEnergy’sCountryAnalysisBrief,availableathttp://www.eia.doe.gov/emeu/cabs/Brazil/Full.html7PersonalcorrespondencewithDr.JoaquimSeabra,NationalRenewableEnergyLaboratory,inApril2009.


alreadyoperatewithtruckswithtwoorthreetimesgreaterloads.8Thespecificenergyconsumptionvaluesfortransportationfromthefield‐to‐millvaryaccordingtothetypeoftruckusedanddistancetravelled.Themeandistancetravelledforfield‐to‐millisabout12miles,asGREET‐CAcorrectlyassumes.Basedonproportionofeachtypeoftruckusedinfield‐to‐milltransportfromlatestavailabledata(i.e.,2004),weknowthat8%oftruckswere15‐tonsinglewagon,25%were28‐tondoublewagon,and67%were45‐tontriplewagons.Therefore,basedonthis2004data,wecalculatethattheenergyconsumptionofsugarcanetransportfromfieldtothemilltobeapproximately20.4ml/t.km,orabouttwo‐thirdsoftheconsumptionofasinglewagontruck(i.e.,30.3ml/t.km).Inshort,ourrecommendationwouldbetouse19,122BTU/mmBTUinsteadof25,722BTU/mmBTUinTable3.02.9oftheStaffReport.

B. ImprovedLowCarbonIndustryPractices

Inthelastfewyears,therehavebeensignificantoperationalimprovementsintheBraziliansugarcaneindustry.10Thereareatleastthreeinter‐relatedchangesthatsignificantlyimpactcarbonintensitycalculations,namely:

• Reductionofpre‐harvestfieldburning• Mechanizationofharvest• Increasedcogenerationefficiency

Theimpactofthesepracticesontheindustry’scarbonintensityandcurrentincreasingadoptionratesarediscussedbelow.GREET‐CApresumesallsugarcaneinBrazilisburnedinthefieldpriortobeingmanuallyharvested.11Moreover,themodelassumesallenergyfromsugarcanebiomassisemployedforethanolproduction,withnosurplus/credit(eitherintheformofbagasseusedasfuel,orexcesselectricityproducedinthecogenerationprocess).Theseareincorrectassumptionsthatdonotreflectcurrentindustrypractices.AgrowingshareofBrazil’ssugarcaneharvest(approximately35%)isnotburnedandismechanicallyharvested.12

8SeeCTCreportentitled,“AnnualAgriculturalReportingforHarvests98/99,99/00,00/01,01/02,02/03”[author’stranslation]fordetailedbackgroundonground‐truthingintransportpractices.Forabroaderdiscussionoftheseandotherevolvingpractices,seeSugarCane’sEnergy,editedbyIsaiasMacedo(2005)aswellasSugarcaneEthanol:ContributionstoClimateChangeMitigationandtheEnvironmenteditedbyPeterZuurbierandJosvandeVooren(2008).9Forfurtherdetail,includingformulasused,seepage23,SectionA3,“TransportofSugarcanefromFieldtoMill”[author’stranslation],of2004SãoPauloStateGovernmentreportentitled“NetGreenhouseGasEmissionsintheproductionanduseofethanolinBrazil”[author’stranslation].Availableonlineathttp://www.unica.com.br/download.asp?mmdCode=76A95628‐B539‐4637‐BEB3‐C9C48FB2908410SeeWorldWildlifeFund’s“AnalysisoftheExpansionofSugarcane’sAgro‐industrialComplexinBrazil”[author’stranslation],availableonlineathttp://www.wwf.org.br/index.cfm?uNewsID=13760.AnEnglishversionofthereportisavailableuponrequest.11See“1.3GHGEmissionsfromStrawBurninginField”onpage22ofGREET‐CA.12Thoughthetrendisforallsugarcaneistobemechanicallyharvestedandnotallburnedcane,therearemillsthatstillburnthesugarcaneinthefieldbutharvestitmanually.


Webelieveageneric,singlesugarcanepathwaymaynotaccuratelyincorporatetheseimportantchangesinthewaythesugarcaneindustryhasandcontinuestoevolveinBrazil.Wenotethatmerelycreatingseparatepathways–onefor“usingbagasseforelectricityproductionasaco‐product”andonefor“usingmechanizedproductionofsugarcane,”assuggestedinTableES‐6oftheStaffReport–willmissthemarkasitpresumesthattheseprocessesaremutuallyexclusive.TherealityonthegroundtodayisthatmechanizationandbagasseforelectricityareoccurringinsignificantlevelsandwillonlyincreaseduetoestablishedregulationsinBrazil.13Themechanicalharvesting(withnosugarcanefieldburning)yieldsahighamountofadditionalbiomass(commonlyreferredtoas“trash”andincludesleavesandtopsofcanestalksamongotherpartsofthesugarcaneplant).Someofthisadditionalbiomassisbeingrecoveredandtransportedtothemillforprocessingandmuchmoreisexpectedintheverynearfuture.14Thisbiomassrecoveryprocessincreaseselectricityproductionthroughcogeneration(or,inthefuture,additionalethanolproductiononcecellulosicpathwaysarecommerciallyviable).Aschangesinfieldoperationscontinue,energyefficiencyimprovementsatmillsalreadyareaddingtothesurpluselectricityprovidedtothenationalgrid.15In2007,millsprovidedabout11,095GWh,whichcorrespondstoabout22.5kWhpertonofrawsugarcanecrushed.16In2008,theMinistryofEnergyindicatedthatpowergenerationincreasedto15.768GWh.17Thisincreasedisaresultofnotonlyincreasesugarcaneproductionbut,moreimportantly,newmillsupgradingtohigh‐pressuresteamcyclegeneratorsthatproduceatleast70kWhpertonofcanewithbagassealone.18Moreover,moreefficientmillsareenteringintolong‐termsupplycontractswithpowerdistributioncompanies.19Forinstance,theamountsalreadycontractedfor2012reach45,180GWh,whichbringspowergenerationto65kWhpertonofcane.20Therewillbeadditionalelectricityincorporatedintothegridby2012,eitherthroughthescheduledgovernmentauctionsorviaopenmarketsales,butthosecontractshavenotyetbeensigned.Finally,lookingahead,whentheadditionalsugarcanebiomass(i.e.,“trash”)isusedforpower

13Onapersonalnote,whentheCARBChairvisitedBrazilinAugust2008,shesawthesechanges–sugarcanemechanizations,cogeneration,andmuchmore–firsthand.ItissurprisingthenthattheStaffReportfailedtoaccountforthat.14SeeHassuaniopcit.15Seepage10inAngeloGurgel,JohnM.Reilly,andSergeyPaltsev.“PotentialLandUseImplicationsofaGlobalBiofuelsIndustry”JournalofAgricultural&FoodIndustrialOrganization5.2(2007).Availableat:http://works.bepress.com/angelo_gurgel/116Sugarcaneharvestwas493milliontonsofsugarcaneaccordingtoactualproductiondatacompiledbyUNICAandavailableathttp://www.unica.com.br/dadosCotacao/estatistica/.DataforcurrentpowersalesisprovidedbytheBraziliangovernment’sMinistryofMines&EnergyandNationalElectricityAgency,theautonomousregulator,andcompiledbytheSãoPauloCogenerationAssociation(COGEN‐SP).WhileallthedataisinPortuguese,itiseasilyaccessibleonlineathttp://www.aneel.gov.brandhttp://www.cogensp.com.br.17PersonalcorrespondencebetweenUNICA’sZilmardeSouzaandMinistryofMines&Energyofficials.18See“MitigationofGHGemissionsusingsugarcanebioethanol”byIsaiasC.MacedoandJoaquimE.A.SeabrainSugarcaneEthanol:ContributionstoClimateChangeMitigationandtheEnvironmenteditedbyPeterZuurbierandJosvandeVooren(2008).19See“Braziltoinvest$21.2billionincogeneration”inTheEconomistIntelligenceUnit(1December2008).20SeeCOGEN‐SPforadditionaldataandinformation,http://www.cogensp.com.br/cogensp/workshop/2008/Bioeletricidade_ENASE_01102008.pdf


production,thepowergenerationvalueswillincreasetoabove100kWhpertonofcanewithinthedecade(includingbagasseand40%ofthestrawpreviouslyburnedinthefield).21

C. TrendsinIndustryAdoptionofLowCarbonPractices

Mechanizationandcogenerationarecommonindustrypracticestodaythatweexpecttoberapidlyadoptedacrossallplantsinthecomingyears.22Thesetrendsarebeingdrivenbythefollowingpolicyandmarketpressures:1. PhaseOutofFieldBurning.Undercurrentregulationsandagreementsbetweenthe

environmentalauthoritiesandthesugarcaneindustry,nearlyallthesugarcaneintheStateofSãoPaulowillbemechanicallyharvestedby2014.SãoPauloaccountsfor60%ofallnationalproductionandalmost100%ofsugarcaneexportstotheUnitedStates.SãoPaulostatelawrequiresthatsugarcanefieldburningbephased‐outby2021fromareaswheremechanicalharvestingispossiblewithexistingtechnology(over85%ofexistingsugarcanefields)andby2031inareaswherethismaynotbepossible(e.g.,steepslopes,irregulartopography,etc).23However,UNICAmembercompanieshaveenteredintoanagreement24withtheSãoPauloEnvironmentalAgencytomoveupthedeadlinesforsugarcanepre‐harvestburningto2014and2017,respectively.Theagreementalsodefinesotherimportantactionssuchasconservationprogramsandrestorationprojectsforripariancorridorsasset‐asidelandpolicies.25

2. IncreasingRestrictionsonBurning.ExistingplantationsthatstillusemanualharvestinginthestateofSãoPaulomustobtainstate‐issuedgovernmentpermitsforthepre‐harvestsugarcanefieldburning.Environmentalauthoritieshavesetstrictcontingenciesuponwhichthesepermitscanbesuddenlyrevoked(e.g.,ifairhumiditydropsbelow30%,caneburningrestrictionsareappliedandifairhumiditydropsbelow20%,allcaneburningissuspended).26Thisuncertaintyhaspushedmanyproducerstomechanicalharvestingtoeliminateassociatedoperationalrisk.

3. ExpansiononlywithMechanization.Since1986allnewsugarcaneplantationsandmillsare

requiredtosubmitenvironmentalimpactstudiespriortoconstructionandoperationin

21Forfurtherdetails,pleasereviewTechnical‐EconomicEvaluationfortheFullUseSugarcaneBiomassinBrazil,[author’stranslationfromPortuguese],JoaquimSeabra,UniversidadeEstadualdeCampinas,July2008.22SeeHassuaniopcit.AlsoseeRabobank’sreport“PowerStruggle:TheFutureContributionoftheCaneSectortoBrazil’sElectricitySupply”byAndyDuffandRodolfHirsch(November2007).23SeeSãoPauloStateLaw11.241enactedon19Septemberof2002,whichrequirestheeliminationofsugarcanefieldburning,isavailableathttp://sigam.ambiente.sp.gov.br/Sigam2/Repositorio/24/Documentos/Lei%20Estadual_11241_2002.pdf24See“ProtocoloAgro‐AmbientaldoSetorSucroalccoleiroPaulista,”availableinPortugueseathttp://www.ambiente.sp.gov.br/cana/protocolo.pdf25See“EnvironmentalSustainabilityofSugarcaneEthanolinBrazil”byWeberAmaraletal.inSugarcaneEthanol:ContributionstoClimateChangeMitigationandtheEnvironmenteditedbyPeterZuurbierandJosvandeVooren(2008).26SeeSãoPauloStateEnvironmentalAgency’sResolutionSMA38/08ofMay16,2008,availableonlineathttp://sigam.ambiente.sp.gov.br/sigam2/default.aspx?idPagina=123.


ordertoobtainrequiredpermits.27Morerecently,inordertoreceiveapermittoestablishgreen‐fieldsugarcanemills,theSãoPaulostateenvironmentalauthoritiesrequire100%mechanicalharvesting.Otherstatesareinactivediscussionstofollowtheirlead.Moreover,additionalregulationsimposedbythestategovernmentofSãoPauloestablishesenvironmentalzoningforthesugarcaneindustryandprogressivelystricterrequirementsforlicensingandrenewalofexistingplantationsandmills.28Nottobeoutdone,thefederalgovernmenthasannouncedthatasimilarrequirementformechanizationwillbeestablishednationwidelaterthisyear.29

4. One‐ThirdHarvestMechanizationNationwide.Theuncertaintiescausedbytheimpactof

harvestpermits,coupledwiththeaforementionedlegislativeandregulatorychanges,haveledtoaquicker‐than‐expectedtransitiontoallmechanized,un‐burnedsugarcaneharvest.AccordingtoBrazil’sSugarcaneResearchCenter,30whichworkswithnearlyallsugarcaneproducers,about35%ofallsugarcaneinBrazilisalreadymechanicallyharvested,andnearlyallofthisisnotburnedinthefield.In2008,abouthalfofthesugarcanefieldsinthestateofSaoPauloweremechanicallyharvested.AndotherstatessuchasGoiás,MatoGrossodoSul,andParanáarealsoimplementingmechanicalharvest.Infact,therobustpaceofmechanizationwasrecentlyhighlightedinaJohnDeereearningsreleasethatstates,“salesarebeinghelpedby[…]risingdemandforsugarcaneharvestingequipment.”31

AnyrealisticevaluationofcarbonemissionsfromsugarcanefarminginBrazilmustreflectthestrictpoliciesbeingimplementedandactionalreadytakenthatphase‐outofsugarcaneburning,increaseinmechanicalharvestandcogenerationoutput.Withoutreasonableallocationofthesevariousaspects,GREET‐CAcannotproviderealisticcarbonintensityvalues.Infact,thedevelopersoftheGREETmodelrecognizedthiswhentheywrote,“eliminationofopen‐fieldburninginsugarcaneplantationswillresultinadditionalGHGemissionreductionsbysugarcaneethanol.”32

27SeeCONAMA(BrazilianNationalCouncilonEnvironment)firstresolutioninJanuary1986,availableathttp://www.antt.gov.br/legislacao/Regulacao/suerg/Res001‐86.pdf.FormoreinfoonCONAMA’sactionregardingsugarcane,seehttp://www.mma.gov.br/port/conama/index.cfm28SeeSãoPauloStateEnvironmentalAgency’sresolutionSMA‐088of19December2008aswellasresolutionSMA‐SAA004,of18September2008,availableathttp://www.ambiente.sp.gov.br/contAmbientalLegislacaoAmbiental.ph[‐2009andhttp://sigam.ambiente.sp.gov.br/sigam2/default.aspx?idPagina=12329SeestatementsbyEnvironmentMinisterCarlosMinconthisaswellastheenvironmentalandeconomiczoningbeingpreparedbyaninter‐ministerialgroupoftheBraziliangovernmentandexpectedtobepubliclyannouncedshortly.Availableonlineathttp://www.mma.gov.br30SeeCentrodeTecnologiaCanavieira(CTC),accessibleonlineathttp://www.ctcanavieira.com.br.31SeeDeere&Company’ssecondandthirdquarterof2008earningsreports,availableonlineathttp://www.deere.com/en_US/ir/financialdata/2008/thirdqtr08.html32See“Life‐CycleEnergyUseandGreenhouseGasEmissionImplicationsofBrazilianSugarcaneEthanolSimulatedwiththeGREETModel,”byMichaelWangetal.inInternationalSugarJournal(2008),availableonlineathttp://www.transportation.anl.gov/pdfs/AF/529.pdf


D. Technical&PolicyRecommendations

ThetablebelowsummarizesthetechnicalimplicationsofactualindustryperformancetodayanddetailshoweachfuelpathwaycomponentwillbeaffectedinGREET‐CAbythesechanges.Alltheproposedchangesarebasedoncurrentproductionprocesses,notprojectionoroptimisticbest‐casescenarios.Recognizingtheevolvingnatureofthetechnologicalimprovements,abroaderstructureforhowtointegratetheseandfutureimprovementsintosugarcanelifecycleanalysisfuelpathwaysisdiscussedattheendofthissection. CARBCOMPONENTS

FORSUGARCANEETHANOLVALUE

(gCO2/MJ)PROPOSEDCHANGESTOEXISTINGAND/ORADDITIONALPATHWAYS

A SugarcaneFarming 9.9

(1)StrawYieldshouldbechangedto0.14drytonpertoncane;(2)Caneburningemissionsareatmost2.9gCO2/MJundercurrentconditionsandaredecreasingrapidly;(3)Newpathwaysshouldbecreatedtocreditmechanizedandun‐burnedharvestbenefits

B AgriculturalChemicals 8.7Energyvaluesinproductionoflime(CaCO3)shouldbechangedto0.11gCO2/MJbasedonaveragegridmix

C SugarcaneTransportation 2.0Totalenergyintransportfromfieldtoplantshouldbereducedto19,122BTU/mmBTUgiventruckscarryloadslargerthan17tons

D EthanolProduction 1.9Emissionsfromethanolproductionshouldbelowered1.1gCO2/MJsincenotallbagassegoesintoethanolproduction

E EthanolDistribution 4.1 Nomajorchangesrecommendedatthispoint

F CogenerationCredit 0

(1)Creditsofatleast1.8to3.6gCO2/MJ,basedonlowendofemissionsscenarios,shouldbeincluded;(2)Trendsandliteratureconfirmthatcreditswillincreasetooffsetothercomponentemissions;(3)Newsugarcaneethanolpathwayswouldallowforaccuratecreditstobegiven,particularlyforincentivizinglesscarbonintenseprocesses

A. SugarcaneFarming.DependingonvariouspathwaysandassumptionsCARBdecidesto

pursue,thevaluesforsugarcanefarmingwillvary.Consideringthecurrentlevelsofmechanicalharvest(i.e.,35%ofallcane)andarevisedstrawyieldfigure(14%ofthecane),and90%ofactualburningintheburnedarea,totalemissionsfromburningcanetodayshoulddropfrom8.2gCO2/MJtoapproximately2.9gCO2/MJ.ThatshouldbethebaselineforGREET‐CApathways.However,asnotedelsewhere,werecommendthatGREET‐CAeitherconsideranevenlowerfiguretorecognizethatthesugarcaneethanolboundforCaliforniacomesfromareasthatarealreadymechanized,ordevelopseparatepathwaystocapturethiscarbonbenefit.


B. AgriculturalChemicals.TheproductionofLime(CaCO3)inBrazilisconsiderablylesscarbonintensivethanGREET‐CAsuggests.Asyounoted,recognizinggridaveragemixandotherfactors,GREET‐CAvaluesforLimeproductionshouldbe0.11gCO2/MJ.

C. SugarcaneTransportation.Energyrequiredforcroptransportationfromfieldtomillis

exaggeratedinGREET‐CA,likelybecauseofhigherloadperformanceofthevehiclesusedinBrazil.GREET‐CAshouldconsidertruckswithtwoorthreetimesgreaterloads,leadingtoarevisedvalueof25,722BTU/mmBTUfieldtoenergyconsumption.

D. EthanolProduction.Asdetailedatlengthabove,GREET‐CAinaccuratelyassumesthatthe

electricitygeneratedfrombagassecombustionisinsufficienttocreatedasurplus.33Basedonacorrectunderstandingoftheuseofbagasse,thetotalGHGemissionsforethanolproductionshouldbereducedfrom1.9gCO2/MJto1.1gCO2/MJonaveragewithlowerfigureslikelyintheverynearfuture.

E. TransportationandDistribution.WeseenosignificantdiscrepancybetweenGREET‐CAand

ourownanalysiswithregardstotransportanddistribution.F. MissingCogenerationCredit.Therearenocreditsforexcesscogenerationelectricityfrom

sugarcanebiomass.ThereisaninherentfallacyinanyanalysisofsugarcanethatdoesnottakeintoconsiderationtheincreasingsurplusofcogenerationelectricityproducedatsugarcanemillsinBrazil.ThoughGREET‐CArecognizesthatsugarcanebagasseisusedtoproducesteamandelectricitytopowertheprocessing,itdoesnotconsiderthatthemillisgeneratinganincreasingsurplusofelectricity,whichissoldintothenationalgriddisplacingcarbonintensesourcesofelectricity.Inotherpathways(e.g.,FarmedTreeCellulosic),suchcreditsaregivenandweseenoreasonablebasistodenyitwithintheGREET‐CAforsugarcane.34Failuretoincorporatetheanticipatedgrowthinelectricitycogenerationnotonlyunderminesoneofthegreatestenvironmentalbenefitsofthesugarcanepathway,butalsocreatesfurtherdiscrepanciesintheyearsaheadthatcoulddiscouragecarbonmitigationbehavior.Basedonthelowendoftherangeofanticipatedelectricitysalestothegrid(i.e.45,180GWhalreadycontractedfor2012),aGHGemissionreductioncreditof1.8to3.6gCO2/MJshouldbegrantedunderGREET‐CA.35Lookingahead,sugarcanemillsoperatingwith70kWh/twillachieveemissioncreditsinthe10‐20gCO2/MJrange,likelycompletelyoffsettinganyemissionsduringproduction,processing,andtransportation.In

33Torecap,mechanicalharvestyieldsasignificantincreaseintheamountofbiomass(commonlyreferredtoasstrawortrash)thatcomestothemill,insteadofbeingburnedinfield.Thisadditionalbiomassisnowaddedtotheexistingbagasse(canebiomassremainingafterjuiceextraction)togeneratesteamandelectricityforthemillsprocessesaswellassaleofsurpluselectricitytothenationalgrid.Finally,millshavebeenreplacingolder,low‐pressureboilerswithhigher‐pressureboilers,thereforeobtaininggreaterefficienciesinpowergeneration.Alladditionalelectricitygenerationisleadingtoagrowingroleofcogeneration.34Anydenialtoacceptthesurplusenergycogeneratedwouldrequireattheveryleastareallocationoftheemissionstopowertheethanolproduction,furtherreducingsugarcane’sethanoloverallemission.35TherangedependsonthebaselineemissionsscenariosforBrazilianelectricity.ItmustbenotedthatundertherecentlyapprovedEuropeanCommissionDirective,cogeneratedelectricityfromsugarcanewasgivensimilarcarboncreditsforethanol.Seehttp://ec.europa.eu/energy/strategies/2008/2008_01_climate_change_en.htm.


fact,astheOrganizationforEconomicCooperationandDevelopment(OECD)recentlypointedoutinalengthycomparativeanalysisofbiofuels,sugarcaneethanolmaysoonhavenegativeemissionsonalifecyclebasis.36

Now,turningtoourpolicyrecommendations,UNICArecommendsthatCARBconsidereitherofthefollowingadjustmentstotheGREET‐CAfuelpathwaysforsugarcaneinordertoreflectthevariationsinagriculturalandindustrialoperationsinBrazil’ssugarcaneindustry,aswellastoaccuratelycreditcarbon‐reducingbehavior:

• OptionOne.GREET‐CAcouldassumeatleast70%ofthesugarcaneusedforethanoltobemechanicallyharvestedandnotburnedinthefield.37Asexplainedabove,themainsugarcaneproducingareaofBrazilreached50%mechanizationinthelastharvestandisrequiredtohaveachievedatleast70%mechanizationby2010.WhenconsideringthewholeofBrazil,about35%ofallsugarcaneisharvestedmechanically.Thehigherfigure(from35%to70%proposedinthisoption)moreaccuratelyrepresentstheactualsourceofthesugarcaneethanolthatmakesittotheUnitedStates;or,

• OptionTwo.Alternativepathways38couldbedevelopedformechanicallyharvested,non‐burnedsugarcaneethanolandtheadoptionofmoreefficientcogenerationtechnologiesdescribedabove.Whilemorecomplex,suchamethodwouldhavethebenefitofnotonlyaccuratelyportrayingcurrentspecificpracticesbutalsoproactivelyencouraginglowercarbonintensitysugarcanebiofuelsproduction,whichistheunderlyingpublicpolicygoaloftheLCFS.Inseparatepathways,creditwouldbegiventomillsfornon‐burningofsugarcaneinthefield(i.e.,avoidedemissions),aswellasthecogenerationsurpluspowerdisplacingcarbonintensefuelssuchasnaturalgasorheavyfueloilusedinmarginalpowergenerationinBrazil.

Regardlessofthefinalapproachonadditionalpathways,westronglyurgethatCARBadoptverifiablemechanismthatensuresbestcarbonmitigatingpracticesarerewardedonatimelymannersoastoensurequickeradoption.MerelyupdatingtheGREET‐CAmodelinhindsight(threeyearsashasbeensuggestedinpublichearings)willnotbeenoughtoreachtheobjectivesofCalifornia’sforward‐lookingclimatechangepolicy.

36“Ethanolfromsugarcaneisthepathwaywherethemostconsistentresultswerefound.Allstudiesagreeonthefactthatethanolfromsugarcanecanallowgreenhousegasemissionreductionofover70%comparedtoconventionalgasoline.Thelargemajorityofreviewedstudiesconvergeonanaverageimprovementaround85%.Highervalues(alsobeyond100%)arepossibleduetocreditsforco‐products(includingelectricity)inthesugarcaneindustry.ThisreflectstherecenttrendinBrazilianindustrytowardsmoreintegratedconceptscombiningtheproductionofethanolwithothernon‐energyproductsandsellingsurpluselectricitytothegrid.”Seepage44ofEconomicAssessmentofBiofuelSupportPoliciesbyOrganizationforEconomicCo‐operationandDevelopment(2008),availableonlineathttp://www.oecd.org/.37Anotherwaytoimplement“OptionOne”wouldbetosetthepercentageasavariablenumbersinceitcanbeeasilyobtainedonanannualbasisfrompublicandofficialsourcesinBrazil.UNICAwouldbepleasetoworkwithCARBtoestablishthismechanism.38Asnotedabove,webelievethatthetwopathwaysproposedinTableES‐6oftheStaffReportfailtocapturetherealityofsugarcaneethanolfarmingproduction.Mechanizedharvest–withorwithoutburning–andcogenerationcannotbeseparated,astheyareoftenpartofthesamepathway.WewouldbepleasedtoreviewsugarcanefarmingandethanolproductionprocesseswiththeCARBstaff.


III. INDIRECTLANDUSECHANGE39

Inthissection,UNICApresentsourassessmentoftheStaffReportcalculationsonsugarcane’slandusechangeimpact,whichreliedontheGlobalTradeAnalysisProject(GTAP)fromPurdueUniversity.Weechothevariouscommentsfromstakeholders–particularlytheletterby111Ph.D.Scientists–statingthatthescienceusedindeterminingthesemarket‐mediated,indirectimpactsisquitelimitedandhighlyuncertain.Inaddition,theselectiveenforcementofindirectlanduseimpactsforbiofuelsoverotherfuelsincludedintheLCFSviolatesthemostbasicprinciplesofregulatoryfairness.Afewlinesmadeintheaforementionedletterbearrepeating:

“Weareonlyintheveryearlystagesofassessingandunderstandingtheindirect,market‐mediatedeffectsofdifferentfuels.Indirecteffectshaveneverbeenenforcedagainstanyproductintheworld.Californiashouldnotbesettingawide‐reachingcarbonregulationbasedononesetofassumptionswithclearomissionsrelevanttotherealworld.[...]Thisproposalcreatesanasymmetryorbiasinaregulationdesignedtocreatealevelplayingfield.Itviolatesthefundamentalpresumptionthatallfuelsinaperformance‐basedstandardshouldbejudgedthesameway(i.e.identicalLCAboundaries).Enforcingdifferentcompliancemetricsagainstdifferentfuelsistheequivalentofpickingwinnersandlosers,whichisindirectconflictwiththeambitionoftheLCFS.”40

Moreover,giventhetighttimelineforCARBimplementationoftheLCFS,aswellasthecomplexityanduncertaintyassociatedwithsuchmodelingexercises,41wewouldliketoexpressourconcernabouttheaccuracyofmodeldataassumptions,methodology,andotherkeyfactorsunderlyingtheGTAPrunsmadebyCARB.Weweregiven45daystoreviewandcommentonworkthatCARBtookmonthstodevelop.BytheCARBstaff’sownadmissiontheyhaverushedtheprocessandcalculations.Ourexperiencewithothersimilarmodels(e.g.,FoodandAgriculturalPolicyResearchInstitute(FAPRI)model)suggestscarefulanalysisandadeliberativeprocessthatconsidersallfactors(i.e.,landusedynamicsinBrazilinourcase)isfundamentaltominimizeinaccuraciesinmodeloutputs.

39UNICAwishestoacknowledgetheinvaluableinputofvariousscholarsinthepreparationofthissection.AmongthemareProf.AngeloCostaGurgel(UniversityofSãoPaulo’sCollegeofEconomics,BusinessAdministration,andAccounting–FEA‐RP/USP),AndréMeloniNassar(PresidentoftheBrazilianInstituteforInternationalTradeNegotiations–ICONE),MarceloMoreira(ICONE),LauraBarcellosAntoniazzi(ICONE),LeilaHarfuch(ICONE),LucianeChiodi(ICONE),andProf.WeberdoAmaral(USP).Withtheirassistance,andthatofmanyotherscholars,ourcommentswouldnothavebeenpossible.40Seehttp://www.arb.ca.gov/lists/lcfs‐lifecycle‐ws/74‐phd_lcfs_final_feb_2009.pdf41ArecentworkshoporganizedbyEnvironmentalDefenseFund(EDF)andtheEnergyBiosciencesInstitute(EBI)withover120expertsnotedthecomplexuncertaintiesassociatedwithmodelinglifecyclegreenhousegases.Thereport’ssummarystates,“TherapidlyevolvingscienceandpolicyofGHGreductionsinvolvesadizzyingarrayofsectorsandtechnologiesthatneedtobemanaged.FuelslifecyclemodelingisadynamicandrapidlyevolvingfieldthatisstrugglingtonarrowthemanyuncertaintiesregardingthedirectandindirectGHGimpactsofarapidlygrowingvarietyofbiomassfeedstocks,productionmethods,andconversionprocesses.Indeed,littleisknownabouttheGHGimpactofawiderangeofcroppingsystemsforbiomassthatmightbeemployedtoproducelowcarbonfuels.”Seepagethreeofreportsummary,“MeasuringandModelingtheLifecycleGreenhouseGasImpactsofTransportationFuels,”EDF&EBI’sUniversityofCaliforniaBerkeley(July2008),availableonlineathttp://www.edf.org/fuels_modeling_workshop.


RecognizingthatCARBappearsdeterminedtopushthisregulationdespitewidespreadconcernsabouttheaccuracyofitsILUCcalculations,weareseekingtoaddresswhatweseeasthemostsignificantmiscalculationsofCARB’sILUCanalysis.Thissectionisdividedintothreeparts:(A)indirectlandusechange,(B)carbonintensitycalculations,and(C)proposedscenarios.First,weprovidecommentstoimprovetheGTAPanalysis,especiallywithrespecttoachievingmoreaaccuraterepresentationofBrazilianagricultureinthemodel.Then,wepresentalternativemethodologiestocalculatecarbonemissionsaswellasemissionsfactorsfromBrazilthatwebelieveshouldbeadoptedbyARB.Finally,webringtogethertheresultsintermsoflandusechangeandcarbonintensityaccordingtothealternativespresentedinthissection.

A. IndirectLandUseChanges

Webelievethatanyattempttoincludetheimpactofmarket‐mediated,indirectlandusechange(ILUC)inemissionscalculationsmusttakeintoaccountthe“interplayofeconomic,institutional,technological,culturalanddemographicvariables”inherentwithlandusechange.42

1. SystematicSensitivityAnalysisTheILUCeffectsmeasuredbyCARBintermsofcarbonintensity(gCO2e/MJ)wereestimatedusingaComputableGeneralEquilibrium(CGE)model,theGTAPmodel,wellknownandrecognizedasastate‐of‐the‐artmodelinthisfield.CGEmodelsareusuallydesignedtocomparealternativescenariosanditseconomicresults,mostlyintermsofwelfarechanges.Inthisway,theyaresuitabletoaddresseconomicimpactsfromexogenouschangesinsomesimplifiedartificialeconomy,builtasa“lab”forsimulations.CGEmodelsgivethedirection(sign)ofchangesfromthesimulatedscenarios,identifythebestandworstcasesandrankingoftheresults,giveanideaaboutthemagnitudeorrelativescaleoftheimpacts,andallowtotrack(orexplain)theeconomicreasonsleadingtotheresults.Therefore,modelersavoidputtingtoomuchweightorcredenceontheprecisenumbersproduced.Thechoiceofanintervalofresultsisawidelyrecognizedmethodtousethemodelresults,andcentralnumbersareusedmerelytosimplifytheexplanationaboutresultsandconclusionsfromthemodelingexercise.Giventheuncertaintyorevenlackofscientificknowledgeaboutmanyparametersusedinthemodel,anextensivesensitivityanalysisisalwaysrecommendedwhenusingnumbersfromCGEmodelstopolicyimplementation,asdiscussedandappliedinMorgan

42B.L.TurnerII,EricF.Lambin,AnetteReenberg,Theemergenceoflandchangescienceforglobalenvironmentalchangeandsustainability,PNASvol.104,no.52(Dec.26,2007).


andHenrion(1990)43,Websteretal.(2003)44,DeVuystandPreckel(1997)45andPearsonandArndt(2000)46.Inthisway,webelievethatthesinglecarbonintensitynumbergeneratedfromtheGTAPimplementationofonlyfivescenarios(forsugarcaneethanol)orsevenscenarios(forcornethanol)isscientificallyweakandalegallyquestionablemethodtorepresentthecomplexityandbroadpossiblepathwaysrelatedtolandusechangesfromanykindofbiofuelexpansion.WestronglyurgeCARBthatpriortoimplementationofthisregulationaSystematicSensitivityAnalysis47shouldbeappliedontheanalysis,consideringthepossiblerangeandprobabilitydistributionfunctionsofkeyparameters.Givenourteamofscholarsandresearchers,andalsoourpartnershipwithBrazilianresearchinstitutions,weareabletooffersomehelptoCARBinsettingupandimplementing,orevenperforming,suchsystematicsensitivityanalysisforsugarcaneethanol.

2. SizeoftheShockCGEmodelsareusedtoperformanalysisofpolicyinstruments(e.g.,taxesandsubsidies),technologicalchanges,andchangesinresourcessupply.ItisuncommontofindintheCGEliteraturedemandshocks,asimplementedbyCARB.Thatsaid,wewereevenmoresurprisedtoseethatCARBchosesuchlargedemandshocks.Thebasisforthechoiceofthesizeofthesugarcaneethanolshock(2billionsofgallons)isnotexplainedintheStaffReportorduringpublichearings.SuchanexaggeratedshockintermsofthepotentialofproductionbeingexportedfromBrazilinthenextdecadeisnotjustifiedbyrecenttrendsandavailableanalysis.TotalBrazilianethanolexportshaveexpandedbylessthan850milliongallonsfrom2001to2007,accordingtotheMinistryofMinesandEnergy.48Ashockof2billiongallonsrepresentsaboutanincreaseinethanoldemandfromBrazilofabout55percent!Asevidencethatthesizeoftheshockfundamentallyaltersresults,whenwerantheGTAPmodelusedbyCARBwithaslightlysmallershock(increaseethanoldemandfromBrazilin1.5billionofgallons),weobservedsmallerlandusechangesandsmallerILUCcarbonintensitynumbers(Table1).

43Morgan,M.G.,andM.Henrion,1990.Uncertainty:aguidetodealingwithuncertaintyinquantitativeriskandpolicyanalysis.CambridgeUniversityPress,Cambridge.44WebsterM.,C.Forest,J.Reilly,M.Babiker,D.Kicklighter,M.Mayer,R.Prinn,M.Sarofim,A.Sokolov,P.Stone,C.Wang,2003.ClimaticChange61(3):295‐320.45DeVuyst,E.A.,P.V.Preckel,1997.Sensitivityanalysisrevisited:Aquadrature‐basedapproach.JournalofPolicyModeling19(2):175‐185.46Pearson,K.,C.Arndt,2000.ImplementingSystematicSensitivityAnalysisUsingGEMPACK.GTAPTechinicalpaper3,CenterforGlobalTradeAnalysis,PurdueUniversity,Indiana.47Additionalinformationon“SystematicSensitivityAnalysis”canbeobtainedfromImplementingSystematicSensitivityAnalysisUsingGEMPACK(2000)byPearson,KenandChanningArndt,GTAPTechnicalPaperNo.03.48OfficialdataforethanolsupplyanddemandbalanceinBrazilisavailableonlineathttp://www.mme.gov.br/site/menu/select_main_menu_item.do?channelId=1432&pageId=17036.


Table1:GTAPmodelingresultsforsugarcaneethanollandusechangewithalternativeshocksizes(ScenarioA)

Shocksize 2billionsgallons 1.5billiongallonsTotallandconverted(millionha) 1.28 0.92Forestland(millionha) 0.43 0.31Pastureland(millionha) 0.85 0.61Brazillandconverted(millionha) 0.89 0.64Brazilforestland(millionha) 0.30 0.22Brazilpastureland(millionha) 0.59 0.42ILUCcarbonintensity(gCO2e/MJ) 56.7 50.6

Sources:CARBdocumentationandauthor’scalculation(GTAPoutputsavailableathttp://www.iconebrasil.org.br/).Note:CO2emissionswerecalculatedusingemissionfactorsfromthearrayEMISSCTR.Theamountofforestryandpasturelanddisplacedwasmultipliedbytheemissionfactorsofthementionedarray.Forestgainedandcropswerenottakenintoconsideration.

Inshort,asthesizeoftheshockreallymattersintermsofILUC,westronglyrecommendthatCARBuseamorerealisticprojectionoftheincreaseinthedemandofsugarcaneethanolfromBrazil,takingintoconsiderationaspectssuchasthetotalproductioncapacityinplaceandtheinvestmentstoexpandtheproduction.And,asnotedabove,CARBshouldperformsystematicsensitivityanalysisofthealternativeshocksizes,giventheuncertaintyabouttheincrementalcapacityinthenextdecades.WeagaincanhelptoprojecttheincreaseinproductioncapacityinBrazilandalsotoimplementtheshocksinGTAP.

3. CattleIntensificationTheusefulnessanddesirabilityofaneconomicmodelresidesinitscapacityofrepresentingrealityusingthesimplestpossiblerepresentationofthephenomenaunderstudy(approach,theory,equations,relationships).Thereisstrongevidenceofcattleintensificationoccurringthesametimeastheexpansionofsugarcane,oilseeds,coarsegrains,andcommercialforeststakingplaceinBrazilsince2001.Inthelastdecadeorso,comparingdatafromthe1996and2006AgriculturalCensusespresentedinTable2,itcanbeobservedthatpasturelandhasdecreasedandcattleherdhaveincreased.Followingthesametrend,beefproductionandexportshavealsoincreaseddespitethereductioninpastureland.Also,arecentstudyhasshownthatmostofthesugarcaneexpansionisoccurringonoldpastureland,althoughthecropisalsoexpandingoveragricultureland(Nassaretal.,2008)49.

49Nassar,A.M.,Rudorff,B.F.T.,Antoniazzi,L.B.,Aguiar,D.A.,Bacchi,M.R.P.andAdami,M,2008.ProspectsoftheSugarcaneExpansioninBrazil:ImpactsonDirectandIndirectLandUseChanges.In:SugarcaneEthanol:ContributionstoClimateChangeMitigationandtheEnvironment.Zuurbier,P,Vooren,J(eds).Wageningen:WageningenAcademicPublishers.


Table2:BrazilianAgricultureCensus:PastureArea,CattleHerdandPastureProductivitybyRegions 1996 2006 PastureArea CattleHerd StockingRate PastureArea CattleHerd StockingRate (ha) (heads) (heads/ha) (ha) (heads) (heads/ha)Brazil 177,700,469 153,058,275 0.86 172,333,073 169,900,049 0.99

RegionNorth 24,386,622 17,276,621 0.71 32,630,532 31,233,724 0.96

RegionNortheast 32,076,340 22,841,728 0.71 32,648,537 26,033,105 0.80

RegionSoutheast 37,777,049 35,953,897 0.95 32,071,529 34,994,252 1.09

RegionSouth 20,696,546 26,219,533 1.27 18,145,573 23,888,591 1.32

RegionCenter‐West 62,763,912 50,766,496 0.81 56,836,902 53,750,377 0.95Source:IBGE,AgriculturalCensus,availableathttp://www.sidra.ibge.gov.br/bda/pesquisas/ca/default.asp?o=2&i=P(Preliminarydatafor2006)

AscanbeseeninTable2,thehighernumberofanimalsperunitofland(stockingrateindex)demonstratesthatpastureyieldsarebeingimproved.Higherstockingrateandhigherbeefproductionsuggeststhatpastureyieldstendtogrowwhenmorepasturelandisreleasedforcropsandotheruses,whichmeansthatpastureyieldsrespondstronglytocattlepricechanges.ThelowlevelofpastureintensificationreinforcesargumentthatthereisstillconsiderableroomforevengreaterimprovementsonpastureintensificationinBrazil.Inotherwords,thisdatasuggeststhatpastureintensificationiselastictoprice.Anempiricalanalysisofthepastureyield(measuredbythestockingrateindex)responsetopricesispresentedinTable3.AccordingtoICONE’scalculations,pastureyieldpriceelasticityinBrazilis0.6,muchhigherthanthecropyieldelasticitiesusedintheGTAPscenariospresentedintheCARBStaffReport.Table3:ResultforPastureYieldwithrespecttoRealPrices,inlogarithm50

Coefficient(1) t‐Statistic Probability

RealPrice(2) 0.60 8.83 0.000000DummyforHighYield(3) 0.64 12.62 0.000000Constant ‐2.26 ‐9.46 0.000000R‐squared 0.92 AdjustedR‐squared 0.90 NumberofObservations 28 Notes:(1)UsingPesquisaPecuariaMunicipal(PPM)forcattleherdandpastureareafromAgriculturalCensus(1996and2006),bothfromIBGE.;(2)Realpricesfor1996and2006for14BrazilianRegions.(3)Dummyvariableforregionsthathadyieldhigherthanonein1996.Source:ICONE,underlyingdataandregressionsavailableathttp://www.iconebrasil.org.broruponrequest.

Suchphenomena—highresponseofpastureyieldstopriceschanges—mustbecapturedbytheGTAPmodel.However,theresultsfromGTAPaboutlandusechangesduetotheincreaseinsugarcaneethanolproductionshowastrongdecreaseinpasturelandassociatedtostrongreductioninforestland.GivenourknowledgeaboutthedynamicsofagricultureinBrazil,CARBresultssuggestthatthepasturelandisbeingreplacedbysugarcaneandothercrops,andthatpasturelandisadvancingontoforestareas.ThisanomalyinCARBresultsmaybeduetothesmallelasticityofcropyieldswithrespecttoareaexpansion,whichrequiressignificantlymore50WecanprovideanyinformationregardingtheresultspresentedinTable3forCARB,aswellasthedataandtheregressionsusedtoestimatetheparameters.


pastureareatoplaceanewsugarcaneplantationorrecoverthedisplacedproductionofothercropsbysugarcane.Wewilladdressourconcernsaboutthiselasticitybelow,butfirstwebelieveCARBmustaddresshowlivestockproductionincorporatedintothemodel.Anothermodelingissuethatisgeneratingverylowintensificationisrelatedtotherepresentationofthelivestockproductiontechnologyinthemodel.Oneaspectofsuchtechnologyisthepossibilityofimperfectsubstitutionamongseveralprimaryfactorsandinputs,asdescribedinBiruretal.(2008).51Themodelassumesalowelasticityofsubstitution(0.2)amongallprimaryfactors(naturalresources,land,labor,andacapital‐energycompositefactor)inallregionsofthemodel.IfwelookattherealityonthegroundandcomparethetechnologyoflivestockproductioninBrazilandtheUnitedStates,wewillobserveamuchmoreintensifiedprocessinUnitedStatesandaveryextensiveuseoflandinBrazil.Intermsofmodeling,itwouldimplysomewhathigherelasticityofsubstitutionamongprimaryfactorsinBrazilthaninUnitedStates.Asanexperiment,inTable4,wehaveimplementedtheGTAPmodelusedbyCARBwithahighervalue(0.4)forthiselasticityinBrazilthaninotherregions(0.2),andhaveseensubstantialdifferencesintheresults,withhigheruseandintensificationofpasturelandinBrazilandlessdeforestation.The0.6pastureyieldelasticitypresentedbeforereinforcestheargumentthattheelasticityofsubstitutionforpastureshouldbehigherinBrazil.Table4:GTAPmodelingresultsforsugarcaneethanollandusechangewithalternativeelasticityofsubstitutionamongprimaryfactorsinlivestockproduction,ScenarioA

ElasticityofSubstitutionamongprimaryfactorsinlivestockproduction

0.2everywhere0.2everywherebut0.4inBrazil

Totallandconverted(millionha) 1.28 1.33Forestland(millionha) 0.43 0.20Pastureland(millionha) 0.85 1.13Brazillandconverted(millionha) 0.89 0.95Brazilforestland(millionha) 0.30 0.08Brazilpastureland(millionha) 0.59 0.88ILUCcarbonintensity(gCO2e/MJ) 56.7 39.3Note:CO2emissionswerecalculatedusingemissionfactorsfromthearrayEMISSCTR.Theamountofforestryandpasturelanddisplacedwasmultipliedbytheemissionfactorsofthementionedarray.Forestgainedandcropswerenottakenintoconsideration.Sources:CARBdocumentationandauthor’scalculation(GTAPoutputsavailableathttp://www.iconebrasil.org.br/).Insum,westronglybelievethattheGTAPmodelusedbyCARBshouldtakeintoconsiderationthehigherelasticitiesofsubstitutionamongprimaryfactorsinthelivestockproductionsectorinBrazil,wherelivestockintensificationispotentiallyhighandisoccurringinpractice.WewillbeworkingonestimatingsuchelasticityandimplementingtheGTAPmodelwithsuchhigherelasticity. 51Birur,D.K.,T.W.HertelandW.E.Tyner,2008.“ImpactofBiofuelProductiononWorldAgriculturalMarkets:AComputableGeneralEquilibriumAnalysis.”GTAPWorkingPaperNo.53,CenterforGlobalTradeAnalysis.PurdueUniversity,WestLafayette,IN.Availableat:https://www.gtap.agecon.purdue.edu/resources/download/4034.pdf


4. ElasticitiesandScenariosAsourexpertsdiscussedwithCARBstaffrecently,thecombinationofdifferentelasticitiesinalternativescenarioshasconcernedusgreatly.WhenwecompareCARBscenariosacrossalternativebiofuelsfeedstock,itisclearthatthechoiceofelasticitieswasinconsistent,ifnothaphazard,aswasalsothenumberofscenariosimplemented.Asexample,thecentralvalueoftheelasticityofcropyieldwas0.4inthecaseofthesevencornscenarios,butitwasonly0.25forallsugarcaneethanolandsoybeanbiodieselscenarios.Asthiselasticityisappliedtoallcrops,thereislittlejustificationtoapplyinghighernumbersincornscenariosthaninotherfeedstockscenarios.CARBstaffhasexplainedtousthattheunevenapplicationofelasticitieswasnotonpurposebutaresultofhavingspenttoomuchtimetryingvariouscornscenarios.Asaconsequence,thestaffinformedus,themodelersgeneratedmorerunsandwereabletofigureoutthatthe0.25forcropyieldelasticitywasa“better”valuetoassume.Fromamodelingtestingandcalibrationperspective,itiseasytounderstandthepressureandvariousruns.Nevertheless,thereremainsnocredibleexplanationastowhythe“better”choiceaboutelasticitieswasnotappliedinthesamewayacrossalternativebiofuelsfeedstockscenarios.Unevenapplicationofthemodelparametersyieldsresultsthatshouldnotbeused.Asaresult,westronglyurgeCARBstaffandexpertstorunthesamenumberofscenariosandsamecombinationofelasticitiesforallbiomasssourcestobeabletoachieveafairandbalancedprocess.

5. ElasticityofCropYieldswithRespecttoAreaExpansion CropYieldswithRespecttoAreaExpansionexpressestheyieldsthatwillberealizedfromnewlyconvertedlandsrelativetoyieldsonacreagepreviouslydevotedtothatcrop.OnpageIV‐20oftheStaffReport,itisassertedthat:“…becausealmostallofthelandthatiswell‐suitedtocropproductionhasalreadybeenconvertedtoagriculturaluses,yieldsonnewlyconvertedlandsarealmostalwayslowerthancorrespondingyieldsonexistingcroplands.”ThefactthatalmostallofthelandwellsuitedtocropproductionhasalreadybeenconvertedcanbetrueintheUnitedStatesandtheEuropeanUnion.But,inmanyotherpartsoftheworld,asinLatinAmerica,andparticularlyBrazil,thereisconsiderable,potentiallywell‐suitedagriculturalareaforcropexpansion.Somestudieshaveshownthispotentialintermsoflandavailabletoagricultureorbiomassproduction,asChouetal.(1977)52,EdmondsandReilly(1985)53andBotetal.(2000)54showus.Suchresearchsuggeststhattheelasticityofcropyieldswithrespecttoareaexpansionispotentiallylargerinthoseregionswithlargerlandavailability.

52Chou,M.,D.P.HarmonJr.,H.Kahn,andS.H.Wittwer,1977.WorldFoodProspectsandAgriculturalPotential.NewYork:Praeger,316p.53Edmonds,J.A.,andJ.Reilly,1985.GlobalEnergy:AssessingtheFuture.NewYork:OxfordUniversityPress.54Bot,A.J.,F.O.NachtergaeleandA.Young,2000.LandResourcePotentialandConstraintsatRegionalandCountryLevels.Rome:FoodandAgricultureOrganizationoftheUnitedNations,WorldSoilResourcesReport90.


Moreimportantly,theGTAPmodelishighlysensitivetothevalueofthiselasticitysincetheindirectlandusechangecarbonintensitycanchangemorethan75%whenthiselasticityvariesfrom0.25to0.75.WenotethatCARBstaffchosevaluesrangingfrom0.5to0.75(exceptonescenarioforsugarcaneethanolinwhich0.8wasusedforBrazil)tobeusedintheGTAPmodelrunsthoughthereisnodetailedexplanationastothebasisofsuchdecision.Infact,fromamicroeconomicperspective,wewouldhardlyexpectinvestmentsinnewareasiftheyieldofthenewcropwouldbehalfofthetraditionalarea,asassumedwithanelasticityof0.5proposedbyCARBstaff.EmpiricaldatainBrazilshowsthatthecropyieldelasticitywithrespecttoareaexpansionshouldbearound0.9‐0.95,ratherthanintherangeof0.5to0.75.TheanalysisoftheempiricaldataispresentedinTable5,butfirstweoutlinethestepsthatwereusedtopreparethedata:

a. Consideringthetimehorizonfrom2001to2007,the558IBGEmicroregionsweredividedinnewandtraditionalareasaccordingtothegrowthinplantedareaforcropsandallocatedareaforpastures.The10percentlargestgrowthmicroregionswereconsiderednewareasandtheremainingmicroregionsthetraditionalareas.

b. Yieldsfornewandtraditionalareasarecomparedtothecorrespondingyear.Forexample,in2007thesugarcaneyieldinthenewareaswas83.4tonsperhectare,whileinthetraditionalareasitwas64.8tonsperhectare.

c. Themeasurethatrepresentstheyieldelasticitywithrespecttotheareaexpansionis

presentedinthelastcolumnofTable5(“2007‐2001”).Thevaluesinthiscolumnaretheratiooftherelationbetween2007and2001yields(newandtraditional).Intuitively,inthecaseofsugarcane,thisvaluesuggeststhatahectareinthenewareaofthecrophasayieldthatis95percentoftheyieldinthetraditionalarea,iftheincrementwouldhavetakenplaceinthetraditionalarea.

Table5:YieldElasticitywithRespecttoAreaExpansion:EstimatesforBrazil(tonsperhaforcropsandanimalsperhaforpasture) 2001 2007 2007‐2001

Activities(1)

YieldNewAreas

YieldTraditional

Areas

New/Traditional

Areas

YieldNewAreas

YieldTraditional

Areas

New/Traditional

Areas

NewArea/Traditional

Area(2)

Sugarcane 76.68 56.86 1.35 83.38 64.78 1.29 0.95Soybean 2.77 2.59 1.07 2.84 2.75 1.03 0.97Corn 3.46 3.17 1.09 3.70 3.74 0.99 0.91Rice 3.42 3.09 0.91 3.80 3.79 1.00 1.11

Pasture(3) 0.76 0.95 0.81 1.34 1.12 1.20 1.48Sources:(1)Considering10%ofthe558IBGEmicroregionsthathadthelargestareaincreasebetween2001and2007(basedonPesquisaAgricolaMunicipal–IBGEdata);(2)Yieldrelationfornewareaswithrespecttotraditionalonesduetoexpansionbetween2001and2007.Thismeasureistheequivalentofthecropyieldelasticitywithrespecttoareaexpansion;(3)Pastureyieldistheratiobetweencattleherd(basedonPesquisaPecuariaMunicipal–IBGEdata)andpasturearea(basedonBrazil’sAgriculturalCensus)fortheyears1996and2006.Theexpansionwascalculatedbasedontheincreaseoncattleherdfrom2001to2006.


Wenotethatalthoughthereisnopastureyieldelasticitywithrespecttoareaexpansion,wealsocalculatedthatmeasuretoshowthatnewareasofpasture,asitisthecaseforcrops,producethesameasthetraditionalareas.Inshort,basedonthisanalysis,werecommendthatCARBrunallscenariosforBraziliansugarcaneethanolusing0.90cropyieldelasticitywithrespecttoareaexpansion,inordertoavoidoverestimationsoflandconversionforBrazil.

6. Adjustmentsforsugarcaneyield TheStaffReportsuggeststhattheGTAPresultsonsugarcanelandusechangewereupdatedtoreflectthe8.2percentincreaseinBraziliansugarcaneyieldsobservedbetween2001andtheaverageforthe2006‐2008timeperiod.However,thephysicalyieldofthesugarcaneplantisnottheonlysourceofyieldgainsintheproductionofsugarcaneethanol.TheyieldgaininTotalRecoverableSugars(TRS)shouldalsobetakenintoaccount.AccordingtotheMinistryofAgriculture,LivestockandSupply(2007)55,theTRSpertonofsugarcanewas138.7in2001and149.47in2006—anincreaseof8.3percent.(Wenotethatthisresultwouldbeevenhigherifofficialdatafor2007and2008werealreadyavailable.)TRSisameasureoftheenergycontentofthesugarcane.56HigherTRSareobtainedovertimeduetodifferentimprovementsinsugarcaneproduction,suchasbettervarietiesandharvestingperiod.TRSisconvertedintosugarorethanolusingtechnicalfactors.AccordingtoCONAB,57thefollowingfactorsareusedforethanol:

1literofanhydrousethanol ⇒ 1.7651kgofTRS1literofhydrousethanol ⇒ 1.6913kgofTRS1kgofsugar ⇒ 1.0495kgofTRS

Usingthosefactors,theaverageethanolproductionperhectarefor2001was5,457liters[(69.44x138.7)/1.7651]whilefor2006‐2008theaverageincreasedto6,365liters[(75.13x149.47)/1.7651].Inotherwords,includingtheyieldgainsinTRS,theethanolyieldhasincreasedby16.6percent(6,362/5,457=1.166).Consequently,werecommendCARBadjustsugarcanelandusechangetoreflectthetotalgainsinyield,whichis16.6percent,ratherthan8.2percent.58

55Seetable5ofthefollowingstudy:MinistériodaAgricultura,PecuáriaeAbastecimento.2007.BalançoNacionaldaCana‐de‐AçúcareAgroenergia.EdiçãoEspecialdeLançamento(availableatwww.feagri.unicamp.br/energia/bal_nac_cana_agroenergia_2007.pdf).56TechnicalexplanationaboutTRScanbeobtainedinthefollowingpublication:Macedo,I.C(organizer).2007.SugarCane’sEnergy:TwelveStudiesonBrazilianSugarCaneAgribusinessanditsSustainability.Berlendis&VertecchiaandUNICA–UniãodaAgroindústriaCanavieiradoEstadodeSãoPaulo.SãoPaulo(availableathttp://english.unica.com.br/multimedia/publicacao/).SeealsoSEABRA,J.E.A.Análisedeopçõestecnológicasparausointegraldabiomassanosetordecanade‐açúcaresuasimplicações.Campinas:UniversidadeEstadualdeCampinas,FaculdadedeEngenhariaMecânica,2008(PhDThesis).57Seepage45ofthefollowingstudy:CompanhiaNacionaldeAbastecimento(CONAB).2008.PerfildoSetordeAçúcaredoÁlcoolnoBrasil.Brasília(availableathttp://www.conab.gov.br/conabweb/download/safra/perfil.pdf).58WhenwepresentedthisargumentinameetingwithARB,itwasraisedaquestionaboutreductioninbagasseproductionbasedontheargumentofamassconservation.Theargumentwasthatifmoreenergyisextractedfromatoneofsugarcane,it


B. CarbonIntensityCalculations

InadditiontotheimprovementsintheGTAPassumptionsandparametersdescribedabove,itisnecessarytoadjustthecarbonemissionsfactorforeachtypeoflandusechange.Thecommentsbelowareanattempttoimprovethecarbonintensitycalculationsforsugarcaneethanolscenarios.Wesuggestthreemaintargetareasforoptimizingthemodeloutcomes.

1. CarbonDataforLatinAmericaUsedasDefaultValueforBrazilConsideringthatmostofthelandusechangeduetosugarcaneexpansiontakesplaceinBrazil(62%asanaverageofthe5scenarios),itisessentialthatemissionfactorsvaluesusedforBrazilareaccurate.However,theemissionfactors(asCO2equivalent)usedintheCARBanalysiscamefromtheWoodsHoledata,whichconsidersLatinAmerica(aregiontwicethesizeofBrazil)aswhole.ThisapproximationresultsinhighervaluesthantheonesobservedinBrazil,whereconsiderablemoreresearchoncarbonstocksisavailable.PeerrevieweddataforBrazilianecosystemsarecomparedwithWoodsHoledefaultvalues,aswellasdataforpasturelandcarbonstocks,inTables6and7.DatafromAmaralatal.(2008)59indicatetotalcarbonstocksindifferentnaturalvegetationrangefrom71.5MgC/haforCerrado(typicalsavannah)to271.0MgC/hafortropicalforest.Thesamestudyindicatestotalcarbonstocksinpasturelandrangefrom42.0MgC/haindegradedpasturesto58.5MgC/hainmanagedpasture.Table6:Carbonstocksindifferentlanduses,consideringbothaboveandbelowcontent,inMgCperhectare

Landuse Above Below Total

Tropicalevergreenforest 200 98 298

Tropicalseasonalforest 140 98 238Tropicalopenforest 55 69 124Temperateevergreenforest 168 134 302

Temperateseasonalforest 100 134 234

Grassland 10 42 52Desert 6 58 64Source:WoodsHole(http://www.arb.ca.gov/fuels/lcfs/ef_tables.xls)

shouldexpectedthatlessbagasseisproducedandthenlessbagasseshouldbetakenintoaccountintheco‐generation.TherealityisthattheamountofbagasseinformedforthecogenerationintheGREETanalysisisbasedoncurrentnumbers,whichmeansthatitisthebagasseproductionwithhigherTRS.IftheTRSwouldnothavegrownfrom2001to2006,morebagassewouldbeavailableforcogeneration.SeeoutcommentsinSectionIIundersugarcanefarming.59Amaral,W.A.N.;Marinho,J.P.;Tarasanthy,R.;Beber,A.;Giuliani,E.“EnvironmentalsustainabilityofsugarcaneethanolinBrazil.”In:Sugarceneethanol:contributiontoclimatechangemitigationandtheenvironment.Zuurbier,P;Vooren,J.vande(eds).Wageningen:WageningenAcademicPublishers,2008.


Table7:Carbonstocksindifferentlanduses,consideringbothaboveandbelowcontent,inMgCperhectare

Landuse Above Below TotalTropicalforest 200 71 271

Cerradão‐WoodySavannah 33.5 53 86.5

Cerrado‐TypicalSavannah 25.5 46 71.5CampoLimpo‐GrasslandSavannah 8.4 72 80.4

ManagedPasture 6.5 52 58.5

DegradedPasture 1.3 41 42.3

Source:Amaraletal.(2008)GiventheavailabilityofpeerrevieweddataforcarbonstocksinBrazil,werecommendthatCARBadoptthedatainTable7initsemissionsvalues.

2. ForestLostandGainedItisnotclearhowthecarbonfactorsforforestgainedwereconsideredinCARBcalculations.SuchcoefficientsshouldbemultipliedbytheareaofforestincreasinginsomeGTAPregionstoestimatetheamountofcarbonbeingsequestered,sincelandusechangesfrompasturetoforestwouldimplyanetcarbonuptake.However,thecarboncoefficientsinthemodel(“GTAParrayEMISSCTR”)donotincludecarbonfactorsrelatedtoforestgainedandthen,thecarbonemissionsbeingcalculatedbyGTAPdonotaccountforthemodelresultsaboutreforestation.Werecommendthatforestgainedbeconsideredascarbonuptake.

3. CropsCarbonEmissionFactorsThecurrentCARBassumptiondoesnotconsideranycarbonuptakefromcrops,eventhoughthereisampleliteratureoncropcarbonuptakefromaboveandbelowgroundbiomass.UnlessCARBcanprovideevidenceastowhyacrop’scarbonupdateshouldnotbeconsideredinthemodeling,webelieveCARBmusteither(a)usecrop‐specificdefaultvaluesforcropsthatshowsignificantareavariationor(b)usedefaultvaluesforthemostimpactingcroponlandusechanges(i.e.,sugarcane).Sugarcaneexpansionscenariosshouldusethecarboncontentspecifictothiscropbecausemostofthecropvariationisrelatedtosugarcane.Consideringthemostconservativeestimateforsugarcaneuptake,whichconsidersjustthebelowgroundsoilcontent,carbonstockwouldbeanaverageof49.25MgC/ha(IPCC,2006).60ButwenotethatIPCCdoesnotrecommendtheuseofgeneraldefaultvalueswhencountryspecificdataareavailable,asitisthecaseofBrazil.Infactthereisavastandwell‐documentedofliteratureoncarbonuptakefromsugarcane(Cerri,198661;Macedo,200862).

60IPCC,2006.GuidelinesforNationalGreenhouseGasInventories,preparedbytheNationalGreenhousegasInventoriesProgramme.In:H.S.Eggleston,L.Buendia,K.Miwa,T.Ngara,andK.Tanabe(eds.)Japan:IGES.61Cerri,C.C.,1986.DinâmicadaMateriaOrgânicadoSolonoAgroecossistemaCana‐de‐Açucar.Tese(livre‐docencia).EscolaSuperiordeAgricultura“LuizdeQueiroz”,Piracicaba,SP,Brasil.


Table8:Carbonstocksindifferentcrops,consideringbothaboveandbelowcontent,inMgCperhectareBelow(1) Above(2)

LAC HAC VegetationTOTAL(3)

Maize 31.0 42.0 3.9 40.4Soybean 31.0 42.0 1.8 38.3Cotton 23.0 31.0 2.2 29.2Sugarcane(4) 41.5 57 17.4 66.65Average 31.63 43.00 6.33 43.64Sources:(1):IPCC,2006.Guidelinesfornationalgreenhousegasinventories,preparedbytheNationalGreenhousegasInventoriesProgramme.In:H.S.Eggleston,L.Buendia,K.Miwa,T.Ngara,andK.Tanabe(eds.)Japan:IGES;(2):Macedo,I.C.;Seabra,J.E.A.,2008.MitigationofGHGemissionsusingsugarcanebioethanol.In:Sugarcaneethanol:contributiontoclimatechangemitigationandtheenvironment.Zuurbier,P;Vooren,J.vande(eds).Wageningen:WageningenAcademicPublishers.;(3):itwasconsideredtheaverageofLACandHACvalues;(4):theaverageofburnedandunburnedsugarcanewasconsidered.

Inconclusion,regardlessofthealternativeused,carbonemissionfactorforcropsshouldrepresentanetcarbonuptakewhenitreplacespasture.Furthermore,bothaboveandbelowgroundcarbonmustbeconsidered,aswasdoneintheotherlanduseestimations.

C. ProposedScenariosforCARB’sILUCCalculations

ThissectionpresentsasetofalternativescenarioscombiningthesuggestionsdiscussedinthepreviouspartsofthisSectiononILUC.Thescenariospresentedbelowaredividedintwogroups:

(i) Table9showstheresultsoflandusechangeandcarbonintensityresultingfromchangesmadeintheparametersoftheGTAP(shocksize,elasticityofsubstitutionamongprimaryfactorsinlivestockproduction,elasticitywithrespecttoareaexpansion,adjustmentsforsugarcaneyields)thatareproposedabove;and

(ii) Table10depictstheresultsintermsofcarbonintensitydepartingfromthelandusechangescenariopresentedinTable9andmakesthenecessaryadjustmentsincarbonuptakefromforestgainedandfromcropsexpansion.

TheresultspresentedinTable9arebasedonashocksizeof1.5billiongallon,onanelasticityofsubstitutionamongprimaryfactorsinlivestockproductionof0.4forBraziland0.2inothercountries,onacropyieldelasticitywithrespecttoareaexpansionof0.9andonanadjustmentforsugarcaneandTRSyieldsof16.66%.Thecarbonintensityforthatscenario,accountingonlyfortheemissionsassociatedwithforestryandpasturesconversion,is25.3gCO2e/MJ,abouthalfofthevaluesproposedinTableIV‐12oftheproposedregulation.

62Macedo,I.C.;Seabra,J.E.A.,2008.MitigationofGHGemissionsusingsugarcanebioethanol.In:Sugarcaneethanol:contributiontoclimatechangemitigationandtheenvironment.Zuurbier,P;Vooren,J.vande(eds).Wageningen:WageningenAcademicPublishers.


Table9:GTAPModelingResultsforSugarcaneEthanolLandUseChangewithAlternativeScenarios1. Shocksize 1.5billiongallons2. Elasticityofsubstitutionamongprimary

factorsinlivestockproduction0.2everywherebut0.4inBrazil

3. Cropyieldelasticityw/areaexpansion 0.94. AdjustmentforsugarcaneandTRSyields 16.66% Totallandconverted(millionha) 0.60 Forestland(millionha) 0.01 Pastureland(millionha) 0.59 Brazillandconverted(millionha) 0.35 Brazilforestland(millionha) ‐0.07 Brazilpastureland(millionha) 0.42 ILUCcarbonintensity(gCO2e/MJ) 25.3Source:CARBdocumentationandauthor’scalculation(GTAPoutputsavailableuponrequest).Note:CO2emissionswerecalculatedusingemissionfactorsfromthearrayEMISSCTR.Theamountofforestryandpasturelanddisplacedwasmultipliedbytheemissionfactorsofthementionedarray.Forestgainedandcropswerenottakenintoconsideration.DepartingfromthescenariodrawninTable9,asetofthreecalculationsforcarbonintensityarepresentedinTable10.Theunderlyingprinciplesofallofthemarethesame:forestgainedandcropsexpansionshouldbetakenintoaccountasacarbonuptake,followingthecommentsabove.Inthecaseofforestgained,thereisnodifferenceinthecalculationsastheemissionfactorsobtainedinthearrayEMISSCTRweremultipliedbytheforestgainedandaccountedasacarbonuptake.Thedifferentalternativesrelyoncropscalculations.InAlternative2,theincreaseincropareaismultipliedby18MgCO2e/hacitedinthefile“ef_tables.xls,sheetGTAPEFs.”However,asarguedintheprevioussection,thosefactorsdonotrepresentthecarbonuptakeassociatedtosugarcane,oilseedsandcoarsegrains.Evenwithverylowemissionfactorsforcrops,itcanbeobservedthatthesugarcanecarbonemissionisstronglyreduced(12.4gCO2e/MJ)incomparisonwiththedepartingscenario(25.3gCO2e/MJ).MorereliablecarbonemissionsforsugarcaneinBrazilareusedinAlternative3.Theemissionfactorofthisalternativeis66.65MgC/ha(244MgCO2e/ha),aspresentedinTable8.BothCinvegetationandbelowgroundweretakenintoaccountinthisfactor.Inthatalternative,carbonemissionsbecamepositive,confirmingthatsugarcaneisuptakingcarbon,ratherthanemitting.Alternative4isbasedonanaverageofaboveandbelowcarbonemissionsfactorsofthecropspresentedinTable8(43.64MgC/ha),withoutdifferentiatingsugarcaneinBrazilaswasthecaseinAlternative3.Negativeemissionswerealsoobtainedinthatalternative.AlthoughTables6and7clearlyshowthatcarbonemissionsfactorsusedinWoodsHoleforLatinAmericaoverstatesemissionsinBrazil,becauseemissionfactorsforBrazilianecosystemsarelower,wedecidednottochangeemissionsfactorsforforestsandpasturelandsinthe


alternativescenariospresentedinthissection.However,itisworthmentioningthatmoreprecise(specificdataalreadyavailableinpeer‐reviewliterature)carbonemissionsfactorsshouldbeusedforBrazil,giventhatthemajorityofthesugarcanelandusechangeistakingplace,forallscenarios,inBrazil.Table10:CarbonIntensityUsingLandUseChangefromTable9andAlternativeScenariosforCarbonUptake

AlternativeScenariosILUCcarbonintensity

(gCO2e/MJ)

1.DepartingScenario(Table9) 25.32.DepartingScenario+CarbonUptakeofForestGained(arrayEMISSCTR)+

CarbonUptakeofCropsfromGTAPEfs‐ef_tables.xls(18MgCO2e/ha)12.4

3.DepartingScenario+CarbonUptakeofForestGained(arrayEMISSCTR)+CarbonUptakeofCropsRestofWorldfromGTAPEfs‐ef_tables.xls(18MgCO2e/ha)+CarbonUptakeforSugarcaneBrazilfromTable8(244MgCO2e/ha).

‐9.4

4.DepartingScenario+CarbonUptakeForestGained(arrayEMISSCTR)+CarbonUptakeCropsfromTable8(160MgCO2e/ha)

‐10.7

Source:Author’sCalculationsavailableuponrequestThelargevariationsinthevaluespresentedinTable10makesclearthatbothforlandusechangeandforcarbonintensitycalculationsresultsarehihglysensitivetocriteriaandparametersused.NotonlychangesinGTAPparametersleadtostrongreductionsinlandconvertedasaresultofsugarcaneexpansion,butalsotheinclusionofthecarbonuptakeinforestgainedandcropsexpansionmayrevertcarbonemissionstocarbonuptake.GiventhatBrazilianagriculturedynamicsareasignificantdeterminantinlanduseandthattheanalysisabove—donewithsupportoftheleadingagriculturaleconomistsinBrazil—runscountertoCARB’spreliminaryresults,westronglyurgeCARBtorevisitthemethodologiesusedinthelandusechangemodelingcarefully.WithrespecttoGTAPanalysis,therevisionshouldfocusonimprovementstobetterrepresentthecomplexdynamicsoftheBrazilianagriculture.Withrespecttocarbonintensitycalculations,CARBshouldreviseallcarbonemissionfactorsusingspecific,crediblevaluesforBrazilianecosystemsaswellascarboncreditsresultingfromforestgainedandcropsareaexpansion.Oncethoseimprovementsareimplemented,wefullyexpectthatCARBwouldconcludethatBraziliansugarcaneILUCismarginal,asweendeavoredtodemonstrateinthisdocument.


IV. CONCLUSION

WecommendCARBforitsassessmentofthelifecycleemissionsassociatedwiththeproductionofsugarcaneethanol.However,webelievetheanalysisassessmentrequiresacomprehensiveupdatewithmoreaccurateandrealisticdatafromcurrentexperienceandanticipatedtrendsinBrazil.AsforGREET‐CAmodeling,perhapsnootherissuedeservesgreaterattentionthanthecreditsresultingfromthecombinationofreducedfieldburning,increasedmechanization,andimprovedboilerefficiency,whichwereabsentinCARB’sanalysis.AsforestimatesofindirectlandusechangesbasedonGTAPmodeling,whilewestrenuouslydisagreewiththeassertionsthatILUCcanbeaccuratelycalculatedatthismoment,webelieveanumberofcriticalelementsareabsentfromtheStaffReportanalysis,particularlyanexplanationoftheassumptionsmade,supportingevidenceforelasticitiesused,andunderstandingoflandandcattledynamicsinBrazil.Itisimperativethattheselanduseissuesbeproperlyaddressedinordertohavearobustandmeaningfulcalculationofthecarbonintensityofbiofuels.WithoutadoubtanILUCpenaltyof46gCO2/MJforsugarcaneethanolhasnoscientificbasis.Asevidencedbythelevelofanalysisofthisletter,theremaywellbecarboncreditsgeneratedinsugarcaneproductionifthemodelisreasonablycalibrated.WehopethisletterwillcontributetoimprovingthedevelopmentoftheLCFSinCaliforniaandremainatyourdisposaltoansweranyquestionsyouoryourcolleaguesmayhave.Sincerely,MarcosS.JankPresident&CEO

JoelVelascoChiefRepresentative‐NorthAmerica

cc: Dr.DanielSperling

Mr.KenYeagerMs.DoreneD'Adamo,Esq.Mrs.BarbaraRiordanDr.JohnR.Balmes,M.D.Ms.LydiaH.Kennard,Esq.Ms.SandraBergMr.RonRobertsDr.JohnG.Telles,M.D.Dr.RonaldO.Loveridge

Documents

LCFS - UNICA Comments to CARB on Sugarcane …...Sugar Cane’s Energy, edited by Isaias Macedo (2005) as well as Sugarcane Ethanol: Contributions to Climate Change Mitigation and