prospects for the sugarcaneprospects …prospects for the sugarcaneprospects for the sugarcane...
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BIOEN Workshop on the Impact of Land Use Changeand Biofuel Crops on Soils and the Environment
PROSPECTS FOR THE SUGARCANEPROSPECTS FOR THE SUGARCANE BIOENERGY SECTOR
Marcos S. JankP id t B ili S I d t A i tiPresident, Brazilian Sugarcane Industry Association
São PauloJune 16, 2009
ABOUT UNICA
• UNICA is the leading sugarcane industry association representing 127 mills inassociation, representing 127 mills in Brazil
R ibl f 60% f ll th l d• Responsible for 60% of all ethanol and sugar production in Brazil
• Emerging as a leader in the generation of bioelectricity already meeting 3% of Brazil’s electricity demandBrazil s electricity demand
• International presence, now in Washington & Brussels, to engage in constructive dialogue
OUTLINE
I. Brazilian sugarcane sector: an overview The Brazilian ethanol evolution: building blocks of energy g gy
security.
The increasing FFV fleet.g
II. Sugarcane´s next frontiers BioelectricityBioelectricity.
Other uses for ethanol.
III Current issues regarding the sustainability of theIII. Current issues regarding the sustainability of the sugarcane sector.
IV. Proposed research agenda.
KEY NUMBERS OF BRAZILIAN SUGARCANE SECTOR
Annual gross earnings US$ 23 billion
Foreign revenue US$ 7.9 billion (2008)
Direct investments more than US$ 20 bln (2006-2009)
Composition 380 plants nationwide
Sugarcane growers 70,000
People directly employed 845,000p y p y ,
Participation in Brazilian energy matrix 16.4%, ahead of hydroelectricity
Sugarcane production 562 mln tonSugarcane production 562 mln ton
Sugar production 31.2 mln ton
Eth l d ti 27 bl litEthanol production 27 bln liters
Avoided CO2 emissions 45 mln tons since 2003
Elaboration: UNICA. Note: data refers to the 2008/09 crop year
BRAZILIAN ENERGY MATRIX INPUT
RENEWABLEOther renewable sources
Wood and other biomass
41% 45% Hydroelectricity
SugarcaneUraniumCoal
Natural gas
Petrole m and deri ati esPetroleum and derivatives
Renewable energy supply structuresupply structure
World (2006): 12,9%OECD (2006): 6,7%
Source: BEN (2009). Elaboration: UNICA
PROJECTIONS FOR THE BRAZILIAN SUGARCANE INDUSTRY
2008/09* 2015/16 2020/21
INDUSTRY
Sugarcane production (million t) 562 829 1,038 Sugar (million t) 31.2 41.3 45.0
Internal market and stocks 10.2 11.4 12.1Surplus Export 21.0 29.9 32.9
Ethanol (billion l) 27 0 46 9 65 3Ethanol (billion l) 27.0 46.9 65.3Internal market and stocks 22.2 34.6 49.6Surplus Export 4.8 12.3 15.7p p
Bioelectricity (MW average) 1,800 8,158 13,158Bioelectricity in Brazilian energy matrix (%) 3% 11% 14%
Note: * - preliminary . Sources UNICA, Copersucar and Cogen.
BRAZILIAN LIGHT VEHICLES SALES (OTTO-CYCLE)
90% of new cars sold are Flex90% of new cars sold are Flex Fuel, representing
over 25% of the Brazilian fleet
Source: ANFAVEA. Elaboration: UNICA
GASOLINE AND ETHANOL CONSUMPTION IN BRAZIL
Gasoline
Ethanol
Source: ANP and UNICA.
BRAZILIAN ETHANOL EXPORTS BY DESTINATIONS
3,4 bi litersUS$ 1,6 bi
3,5 bi litersUS$ 1,5 bi
5,1 bi litersUS$ 2,4 bi Total exports
Source: SECEX. Elaboration: UNICA
OUTLINE
I. Brazilian sugarcane sector: an overview The Brazilian ethanol evolution: building blocks of energy g gy
security.
The increasing FFV fleet.g
II. Sugarcane´s next frontiers BioelectricityBioelectricity.
Other uses for ethanol.
III Current issues regarding the sustainability of theIII. Current issues regarding the sustainability of the sugarcane sector.
IV. Proposed research agenda.
BREAKDOWN OF SUGARCANE’S ENERGY
Energy equivalent ofAlcochemical
Bio-plastic
Energy equivalent of 1 ton of sugarcane
= 1.2 oil barrel
Source: UNICA
SUGARCANE PRODUCTS
ETHANOL USE: NOT LIMITED TO PASSENGER CARSEthanol po eredEthanol-powered
buses (E95) - still a pilot project in Brazil
Biobutanol
Bio-plastics (PHB,
Brazilian-made crop dusting planes running
polyethylene, PVC)
dusting planes running on ethanol
Fle f el Production of diesel fromFlex-fuel motorcycles
Honda 150 cc Flex in the market
Production of diesel from sugarcane at commercial
scale after 2010in the market
NEW PLAYERS IN THE BRAZILIAN SUGARCANE SECTOR
T t
Energy sector
Rede GroupAutomobile sector
ToyotaMitsubishi Corporation
Companhia de Energia Renovável
Other sectors
TGM Turbinas ConstrucapEncalso Pactual Bank
Grandene
Bioplastic company
Dow Chemical B k / ETH Bi i Grandene
Concessionárias Rodovias SPBraskem/ ETH Bioenergia
Solvay
Bertin Bunge Cargill ADM
Agro-food industry and trading companiesOil company
g gAdecoagro Louis Dreyfus Commodities
Noble Group Tereos
BPPetrobrás
BIOELECTRICITY: POTENTIAL IN BRAZIL
2 It i2 Itaipus
Notes: 1 ton of sugarcane produces 250 kg of bagasse and 204 kg of straw, 1 ton of sugarcane (bagasse + straw) generates 199,9 KWh for exporting; the strawinferior calorific value = 1,7 bagasse inferior calorific value; capacity factor = 0,5 (Koblitz). It is assumed that 75% of the bagasse is used for cogeneration. Thepercentage of straw use starts at 5% (2008) going up to 70% (2015) . Until 2010 the potential market prediction consider the regulated energy auctioning; for 2011an increase of 1600 MW is assumed, for subsequent years a 2000 MW increase per year is assumed. Source: Cogen, UNICA., q y p y g ,
BENEFITS OF BIOELECTRICITY
Experience and know how Units are self-sufficient in energy
Reduced construction period Reduced construction period Construction in 24-30 months
Renewable and clean energygy Low environmental impact Provide carbon credits
íí Synergy with hydro production pattern Bioelectricity is produced during the dry season
Smaller projects and broader range of in estors
íí
Smaller projects and broader range of investors Eliminate risks of delay and construction problems
Strengthen the national equipment industry and create jobs Strengthen the national equipment industry and create jobs
Location close to main load centers
Source: PSR, Cogen, UNICA, Elaboration: UNICA,
OUTLINE
I. Brazilian sugarcane sector: an overview The Brazilian ethanol evolution: building blocks of energy g gy
security.
The increasing FFV fleet.g
II. Sugarcane´s next frontiers BioelectricityBioelectricity.
Other uses for ethanol.
III Current issues regarding the sustainability of theIII. Current issues regarding the sustainability of the sugarcane sector.
IV. Proposed research agenda.
MECHANIZED HARVEST IN THE STATE OF SÃO PAULO
Source: INPE UNICA and SMASource: INPE, UNICA and SMA.
MITIGATING GLOBAL WARMING
Energy balance: 9.3Productivity: 7,000 liters/ha
A CARBON ABSORBING MACHINE?
2 METERS
3 METERS
2 METERS
1 METER
22-36 tons C/hatons C/ha
5-7 years
1 METER
3-5
5-7 years
2 METERStons C/ha
3 METERS
4 METERS
Source: Polo de Biocombustivel (Weber Amaral) from various sources.
U.S. RENEWABLE FUELS STANDARD (RFS)
LO GLO G
Sugarcane ethanol with +50% GHG
reductionOWER
GHG
OWER
GHG
RR
Sources: EISA of 2008, Dept of Energy, ITC; E-10 Blend Wall Limit based on EIA’s projections of gasoline consumption and do not include bottleneck and other infrastructure concernsand other infrastructure concerns.
CALIFORNIA’S LOW CARBON FUELS STANDARD (LCFS)
em
egaj
oule
f CO
2pe
r
usin
g A
P
Gra
ms
of
ILU
C
GTA
Source: California Air Resources Board’s Low Carbon Fuel Standard, March 2009.
1% OF ARABLE LAND DISPLACES 50% GASOLINE
Millions of Hectares (2007)%
l%blBRAZIL 851 total
landarable land
BRAZIL 851
TOTAL ARABLE LAND 354.8
1 T t l C L d 76 7 9 0% 21 6%1. Total Crop Land 76.7 9.0% 21.6%
Soybean 20.6 2.4% 5.8%
Corn 14 0 1 6% 3 9%Corn 14.0 1.6% 3.9%
Sugarcane 7.8 0.9% 2.2%
Sugarcane for ethanol 3.4 0.4% 1.0%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%
Sources: IBGE, UNICA
EPA: “INDIRECT LAND USE” EFFECT
Source:s See Figure 2.1-2. “Lifecycle GHG Results Using 100-Year Net Present Value with 2% Discount Rate” in page 282 of Discussion Draft of Environmental Protection Agency (EPA) Regulatory Impact Analysis, May 2009. Range shows net emissions if EPAassumes all land conversion from forest (upper bound) and all from grassland (lower bound).
EU DIRECTIVE ON RENEWABLE ENERGIES
The Directive establishes the adoption of a 10% mandatory target by 2020 for renewables in the transport sector.
The majority of this 10% is expected to be fulfilled by biofuels and this could represent a market for ethanol up to 14 billion liters.
The mandatory 10% target includes sustainability criteria:
Requirements for greenhouse gas emissions savings compared to fossil q g g g pfuels: from 35% when the Directive enters into force in 2010, to 50% by 2017 and 60% for new projects launched as of 2017.
Establishment of areas of high biodiversity and carbon stock as “no go areas” - where the production of biofuels is prohibitive.
F t tl d d t ith hi h bi di it ( till d Forests, wetlands and pastures with high biodiversity (still under discussion the correct definition of these geographical areas).
DEFORESTATION UNRELATED TO SUGARCANE 0 040,04
0 84-0,84
-0,38
1992 2008
Source: INPE and UNICA. Deforestation data is calendar year while sugarcane production is based on harvest.
CANASAT PROJECT P id dibl f l i f ti di th ti l di t ib ti f lti t d Provides credible, useful information regarding the spatial distribution of cultivated
sugarcane area in South-Central region, using remote sensing satellite images
Examines evidences on the relationship between agricultural land-use Examines evidences on the relationship between agricultural land usechanges, soil productivity and indicators of environmental sensitivity
Several inquiries can be performed about sugarcane location, amount ofcultivated area and sugarcane crop evolution over the past years at bothmunicipality and State levels
Initiative of INPE, UNICA and CTC
http://www.dsr.inpe.br/mapdsr/
SUGARCANE AGRO-ENVIRONMENTAL ZONING IN SÃO PAULO STATEPAULO STATE
São Paulo State, where 60% of i h f dsugarcane is grown, has performed
and adopted an agro-environmental zoning that induces sugarcane
expansion in the most appropriate areas and prohibit new planting in
sensitive areas
Sustainability initiatives for biofuels:A universe in constant expansion
SUSTAINABLE BIOFUELS
EU Directives
GLOBAL MULTISTAKEHOLDER
INITIATIVESNATIONALINITIATIVES
INTERNATIONALBODIES
EU Directives
G8 +5 UNEPOCDE IEA FAOIFC ISOIDB
CRAMER
NL UK DE SE
LCFS
USA
RTFO PBCB
BR
kSEI Equator Prop
Scorecard
CRAMERCramer
Commission
LCFSLow Carbon Fuel Standard
Renewable Transport Fuel Obligation
RTFO PBCB T ask 39Liquid Biofuels from Biomass
Stockholm Environment Institute
SEIBrazilian Biofuels
Certification Program
EquatorPrinciples
PRIVATE BANKS
CEN
Prop.ABNT+DIN
Renewable
RFS
Meó/ISCC Biofuel Quota Law‐
Ordinance for sustainability requirements
GBEPGlobal Bioenergy
Partnership
RSBRound Table on Sustainable
Biofuels
INMETROGreenergy
SEKABBAFF
Low CVP Fuels RTRSRSPO
Roundtable on Responsible Soy
Roundtable on Sustainable Palm Oil
BSIBetter Sugarcane
Initiative
CENEuropean
Committee for Standardization
VERIFIED SUSTAINABLEETHANOL
Renewable Fuel Standard
WWFSDG
Sugarcane Discussion Group
Prepared by UNICAv. mar09
IBSistema de Verificação. da Atividade Agropecuária
OUTLINE
I. Brazilian sugarcane sector: an overview The Brazilian ethanol evolution: building blocks of energy g gy
security.
The increasing FFV fleet.g
II. Sugarcane´s next frontiers BioelectricityBioelectricity.
Other uses for ethanol.
III Current issues regarding the sustainability of theIII. Current issues regarding the sustainability of the sugarcane sector.
IV. Proposed research agenda.
SUGARCANE SECTORS’ RESEARCH AGENDA
International markets
Certification schemes
Climate change
“Food vs fuel” and
“deforestation” debate
Emission reductions
2nd and 3rd
generations
debate
reductions
R&DLUC and
iLUC
generations
Lifecycle analysis
GTAP
R&DHCVA and
HBGBioelectricity
BLUM GREETInternational deforestation
Mechanized harvest
CANASATCarbon stock
patterns Degraded pastures
data
a est
Database
measurements
involved not yet involvedIndustry’s participation:
SUGGESTIONS FOR RESEARCH AGENDA1 Proliferation of low impact projects must be avoided Focus on1. Proliferation of low impact projects must be avoided. Focus on
multidisciplinary initiatives to concentrate and maximize research’s results: Coordination and information exchanges are extremely important to avoid
duplication of work.
From laboratory experiments to commercial scale testing needs an expressive From laboratory experiments to commercial scale testing needs an expressive amount of resources.
2. Research structure cannot be exclusively based on public institutions, it y p ,cannot rely only on the private sector either. A new cooperation model is needed (for research and funding)
3. We should (A) map all of the current initiatives (what is the situation today), (B) define 3 or 4 main objectives and (C) define each actors’ role.
There must be a common agenda involving private sector government and There must be a common agenda, involving private sector, government and universities/research institutes.
4. To expand cooperation under the MoU US-Brazil on biofuels.
Thank you y
www unica com brwww.unica.com.br