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September 9, 2011

Prof. Weber A. Neves do Amaral, PhD

ESALQ – USP

The Fulbright Scholar Program at UNL:Bioenergy systems in Brazil: challenges and future perspectives

Objetives of this short Fulbright Scholar Program

Mid term:

• Understand the key drivers of agriculture innovation – using a comparative

approach – USA and BR

• To what extend these innovations in the feedstock production and conversion

technologies are towards or contribute to sustainability

• What constraints their adoption or deployment?

Long term:

• Contribute to a long term research agenda between these countries and

organizations, addressing the findings and gaps of the mid term goals

assessment2

UNIVERSIDADE DE SÃO PAULO

7 Campi

UNIVERSIDADE DE SÃO PAULO

Armando Sales Oliveira Campus – 19 schools

5 schools in metropolitan São Paulo

1st place in Latin America

70k students and ca. 7,2k faculty

1st place in Brazil

94th place in the world*

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• The total fuels market is very large and growing at 3-4% per year

• Biofuels are ca. 3.0% of total consumption of gasoline and diesel. Conservative

projections estimate at least 5.0-7,0% by 2020.

• The profitability of ethanol is reinforced by increasing prices of fossil fuels; current oil

reserves are reducing and new ones are being discovered at higher cost sites (e.g. deep

waters, tar sands, etc)

• Environmental concerns are also pushing demand for biofuels (e.g.: GHG)

• US is producing ethanol from corn, while ethanol from sugar cane is made in BR.

• Biodiesel economic feasibility yet to be proven at current stage of development without

tax incentives and considering projected oil prices.

• But there are new developments towards value added bioproducts, using the

biorefineries as a business framework

• Increase demand for food, fuel, feed will demand more from less and more efficient and

sustainable production systems

• August 17, 2011 the US-Brazil Strategic Energy Dialogue was launched

GLOBAL BIOENERGY

Major international drivers are pushing for a very favorable

global bioenergy markets…. But some fundamental questions remain to be answered

Yesterday President Obama said that

building the the next generation of

manufacturing, including advanced

biofuels, is “how America can be number

one again”.

How? Which feedstock? Where? How

much? Which winning technologies?

Oil dependent economies

and global economy recover

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Roles and

functions

of government,

private sector

and NGOs

Gasoline/Dies

el

Querosene

Food

Ethanol

& biodiesel

Jobs

WindEnergy

demand

GHGs

Nuclea

r

Oil reserves

Economic

growth

+

-

Hydro

Hydrogen

Trends in

consumption

Global

awareness

Environment

al

taxes &

policiesEnergy

supply Land use

patternsNative

vegetation

and

forests

Quality of

jobs

Diversification Biodiversity

Climate

change

Food

safety

Quality of

life

and

livelihood

s

-

+

+

+

+

+-

+

+

+

+

+

+ +

+ +

+

+

-

-

-

+

+

+++

-

Biofuels: beyond agriculture production –

a system dynamics complex of multiple interactions

INTRODUCTION

Sustainability:

Economic, energy and climatic policies integrated

Sustainability:

social awareness and targets

Sustainability:

A fragmented agenda;

Green investments not viable

Business as usual scenario

Sustainability:

countries without clear targets - GHG

Market: effective policies,

but not sufficient

Fiscal policies still not business friendly

Market: higher growth rate with strong pressure

on the resources

Higher oil prices

Market:

higher growth rates

Diversification of the energy matrix

Market: same growth rate:,

market regulations driven by government

Failure of a common international agenda:

M

S

Future challenges

• Land use and availability

• Environmental framewokrs and

biodiversity conservation

• IP rights

Land availability:

A) Land use changesRegion dependentStringency of environmental frameworks and levels of compliance

B) Optimization of current land use

Yield and productivity potential - challenges

• Market size

• Levels of investment in applied research

• Crop dependent – learning curve and new agricultural frontiers

• Level of genetic improvement and the role of biotechnology

Ex: application of synthetic biology for novel crops and traits

ca. 10 years for full deployment

An issue of concern:

How to leverage existing crop productivity?

Sugar cane – 88 ton/ha – (45 - 120 ton/ha)

Eucalyptus – 44 m3/ha/year – (27 – 110 m3/ha/year)

How?

Precision farming and logistics

New tools for monitoring productivity: nutrient efficiency and water

VERACEL Cia

How to reconcile feedstock production and conservation strategies?

Environmemtal framework and the Brazilian Forest Code

Several certification schemes being discussed for bioenergy

Eucalyptus plantationAtlantic forest

One of the main targets of this protocol is related with the anticipation of sugar

cane burning regime from 2017 to 2014 in flat areas, and from 2031 to 2017 in

slope areas*

* Are considered sloping areas, when the inclinaiton is more than 12%

Source: Única 2

Mecanized areas Non-mecanized areas

% o

f h

arv

este

d s

uga

rcan

e w

ith

ou

t b

urn

Environmentally friendly protocol of the sugarcane industry :

the Green Protocol of the Secretary of Environment – São Paulo State - 1/2

The main resolutions and suitable areas for planting sugarcane are shown

below:

• Protect the areas with original native vegetation

and the prohibition of the planting in the Amazonia,

Pantanal e Bacia do Alto Paraguai biomes;

• Sugarcane planting in areas where the use of

water is minimum as possible (rain feed primarily);

• A draft law project to recommend the growth of the planting

based in the food safety without harming food

production;

• Look for new places to produce sugarcane, using

pasture areas or those occupied by cattle raising.

Source: EMBRAPA 2

Sugarcane zoning and revision of the Forestry Code (1965)

Subtitles:

-Suitable areas

- Amazonia, Pantanal

and Bacia do Alto

Paraguai biomas

Pasture

Degraded Area of Permanent Preservation (APP)

Eucalypt

Restored APP

Environmental services

Ecological tax (ICMS ecologico and Pro-ambiente)

REDD and market instruments

Alianca Brasileira para Mudancas Climaticas – several stakeholders

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...

Evolution of productivity of Brazilian ethanol:

•Continuous investment in R&D – mainly in the public domain x

•situation of IP rights to secure long term investments in BR –

•For business the levels of protection are low…

IP rights – another issue of concern

Examples from Brazil

• Sugar cane ethanol

• Biodiesel

• Innovation

27Source: AGRIANUAL / IDEA

Traditional

Frontier

New frontier

PA

1-0.6

Capricornia

Equator

Location of mills and sugarcane production

MA

3-2

TO

1-0,2MT

12-13

NE

41-56

BA

5-6

SP

189-266

GO

23-19

MS

21-12

PR

31-35

RJ

11-7

MG

37-32 ES

6-4

RS

2-1

Nr mills – M ton

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Carbon

credits

7 M ha

72 thousand growers

400 mills & distilleries

(Operation & projects)Harvest

400 M tons

ETHANOL22 billion liters

SUGAR30 million tons

BAGASSE

Bioplastic

Ethanol

Food

PharmacyLysine

Derived

Sugar cane value chain: where are the opportunities for bio-products?

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Total production of sugar cane increased significantly with the

deployment of the ethanol vehicles

The evolution of the Brazilian ethanol industry – M tons of processed sugar cane

Source: Datagro

Last Strategical

plan to the

sector:

Próalcool

Ethanol car

increase of

demand

Stagnation of the sector

Change the mix of production

from ethanol to sugar

Release the prices

of ethanol

Flex fuel car

sector boom

BRAZIL BIOFUELS

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Evolution of light vehicles production and Total Brazilian Fleet – „000 vehicles

Source: ANFAVEA; VPB estimates

Gasoline

FFV

Ethanol

CNGDiesel 1,045

1,385

1,446

2,752

14,797

21,425

BRAZIL BIOFUELS

Flex fuel cars account for more than 80% of total cars produced in Brazil

80

%

Brazilian Fleet (2007)

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Energy balance of ethanol production from different feed stocks

Sugar cane is an important feedstock to produce ethanol –

first and advanced generations

Source: Petrobrás, Coehlo/Cenbio

GLOBAL BIOFUELS

En

erg

y o

ut

pu

t in

pu

t ra

tio

Raw materialProduction /ha

(kg)

Quantity of

Ethanol /ha

Energy Output/

Energy Input

• Sugar Cane

• Corn

• 85.000

• 10.000

• 7.080 liter

• 4.000 liter

• 8.3

• 1.3 - 1.8

0

2

4

6

8

10

12

Sugarcane Subar beet Wheat straw Corn Wood

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Energy cane

Note: 2nd generation is equivalent to cellulosic

Source:Unicamp, Canavialis

Challenges

Today, only 1/3 of the energy content of the sugarcane plant is used

to produce ethanol. 2nd generation biofuels (hydrolysis and

fermentation) might cover this gap, but with what costs?

1 ton of sugar cane stem

Energy (MJ)

• 150kg of sugar

• 135 kg stem fibers (bs)

• 140 kg leaves fibers (bs)

Total

2500

2400

2500

7400 (1.25

boe)

Technology

Conventional

Hydrolysis

Total

2005 2015 2025

l/tc

85

-

85

l/ha

6.000

-

6.000

l/tc

100

14

114

l/ha

8.200

1.100

9.300

l/tc

109

37

146

l/ha

10.400

3.500

13.900

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Distribution of bioenergy projects in Brazil – for electricity generation

Fonte: ANEEL

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Sugarcane bagasse complements the hydro-electricity generation in thewinter

Fonte: UNICA – Etanol e bioeletricidade

Sugarcane and its contribution to the energy matrix/month - 2008

0

20

40

60

80

100

120

140

Jan Fev Mar Abr Mai Jun Jul Ago Set Out Nov Dez

EnergiaNatural

Novas Hidrelétricas Biomassa

ITAIPU = Sugarcane bagasse in 2015/16

2008: 94,5 TW/H/YEAR

3

Feedst

ock

div

ers

ity

3

Is biodiesel a social or an energy program?

80% soybean dependent

Over the targets – 4%

The role of Petrobras – Brazil Oil Company

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Assessment of new feedstocks and technologies –

critical issues associated with the economics...

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Biofuels initiatives in Brazil cover many 1st and 2nd Gen pathways

for gasoline substitutes.... The Amyris case and Braskem investments

Raw

Material

Preparation

Process

Feedstock

Conversion

Process I

Conversion

Process II

Biofuel

Product

Separation into cellulose,

hemicelullose and lignin

components

Cellulosic and hemicellulosic

material

(crops, waste)

Cellulose conversion to sugar

via saccharfication

(hydrolysis);

thermal, chemical and

biological processes applied

Special fermentation for 5-6

carbon sugars produced by

saccharification

Cellulosic

Ethanol

Synthetic Biology Fuel

SubstitutesSyn-

gasolineHydrogen

Gasification of raw material through

heat

Syngas

(e.g., CH4, CO, CO2, N, H)

Fisher-Tropsch Process

Water Gas

Shift &

Separation

Catalysed Synthesis

BioButanolEthanol

Distillation and

evtl. removal of

water

Fermentation

to ethanol,

using yeast &

other

microbes

Conversion to

6-C-sugar

(high-

temperat.

enzyme)

6-carbon

sugar

Starchy crop

parts

(kernels)

Sugar crops, e.g.

- beet

- cane

Grain crops,e.g.

- wheat

- corn

Sugar extraction

Harvesting

starch,

separating,

cleaning,

milling

Genetically engineered

microbes produce fuel product

via metabolic pathways

N/A

Methanol

Fermentation

using A.B.E

Process

Energy Crops Agricultural

Waste

Forest

Residues

Municipal Waste (MSW)

Separation into cellulose,

hemicelullose and lignin

components

Cellulosic and hemicellulosic

material

(crops, waste)

1st Generation

2nd Generation

Key:

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Potential feedstocks for biorefineries

Other feedstocks for advances biofuels

Fonte: McMillan, 1994; Wood for Alcohol Fuels, 2002; Saad, 2005; IBGE; CONAB; SBS

6,600

11,549

22,933

3,919

4,000

2,000

115,000

72,600

64,029

80,747

2,937

94,600

38,700

460,000

9 a 13

5 a 8

3 a 4

4 a 6

22 a 24

18 a 20

3 a 5

Area[000 ha]

Source of feedstock Production

[000 t/year]Produtivity[t/ha.year]

Proprieties (%)

lignin celullose hemicelullose

Potential

20

15

15 a 25

23 a 35

20

28

10 a 30

41

30 a 45

30 a 40

36 a 40

45

42

25 a 40

25

50 a 35

25 a 35

-

30

27

35 a 50

High

Medium

Medium

Medium

High

Medium

Low

6,600 72,600 9 a 13 26 2837 HighCane

Straw

Bagasse

Corn stover

Soybean

stover

Rice stover

Eucalyptus

residues

Pine

residues

Pastures

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Fund suppliers

Feedstock/Conversion

Suppliers

2nd

Generation

Biofuels

• Research Institutes

• Universities

UFPE

Brazil is establishing a Cellulosic Ethanol cluster with a significant number of players...

NON-EXHAUSTIVE

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4. PROJETO URBANÍSTICO

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4. PROJETO URBANÍSTICO

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4. PROJETO URBANÍSTICO

Proposal Market Entry

Almirall 060929

Integrated business model

Operational efficiencyDeployment phase

...

Portfolio review of existing platforms

Implementation

complexity

High

NPV

[$ MM]

Low

High

Low

An example of future approach for research

The Biorefinary Business Models (BBM) can be assessed based

on their long term value creation potential

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Biorefinaries, attraction of capital for innovation and

densifying knowledge frameworks…

Business

pipeline

Universities

Academia Private Government

Foundations

Innovation

agencies

Innovation centers

R&D

Agencies

Incubators

Tech parks

Brazil

International

exchange

•Internationalpartners

•Advisors

•Partners’ networks

•Media

•Business partners

•Seminars

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Food

Production

Systems

Bioenergy

Production

Systems

Environmental

services

• Managing landscapes sustainably

• Multiple products with value added and environmental services

• Increase farmer´s income

• Improve GHGs balances of current ethanol´s benchmark

• Reduce the dependence on fossil fuels while contributing to the

production of other goods and services

Food systems

Energy systems

How to integrate

these systems at landscape level?

Remaining challenges and discussions

Sustainable production of any feedstock (or biomass) is vital for the

viability of the bioenergy/bioeconomy based products and services

How?

Where?

With whom?

When?

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Information assessment & market signals

Bioenergy and biofuels are not the panacea to solve all energy

problems, but can effectively contribute towards a low carbon

economy scenario in the present and in the near future.

Thanks

• Contact info

Weber Antonio Neves do Amaral

Email: wanamaral@gmail.com

Cel phone: 402 - 4841127