Overwiew of the sugar and ethanol industries in

Overwiew of the sugar and ethanol industries in Brazil Prof. Dr. Edgar G. F. de Beauclair - egfbeauc@esalq. usp. br Dra. Raffaella Rossetto - raffaella@apta. sp. gov. br

Sugarcane in Brazil 2007 6 MILLIONS HECTARES 470 MILLIONS TONS OF CANE 29 MILLIONS TONS OF SUGAR 17 BILLIONS LITERS OF ETHANOL 83 TON. SUGARCANE/ha Fonte: Estimativas Nastari, 2007 Fonte: ORPLANA 2006

Sugarcane in São Paulo state, 2007 3 MILLIONS HECTARES 265 MILLIONS TONS OF CANE 19, 5 MILLIONS TONS OF SUGAR 11 BILLIONS LITERS OF ETHANOL 90 TON. SUGARCANE/ha Source: UNICA. 2007 Source: IEA, 2008

BRAZILIAN ENERGY BASE Renewable sources 44. 5 % % 100 80 86 60 Gilberto Ribeiro de Carvalho - PETROBRAS 40 20 Fonte: MME, BEN 2006 0 14 World 45 55 Brazil Renewable No Renewabl

Brazilian plants Brazil has 357 plants that produces sugar, ethanol and some of them also produce electric energy using bagasse Untill 2010 will be installed more 88 mills: 19 in 2007/08; 36 in 2008/09; 33 in 2009/10 Total investment = US$ 17 billions

Barralcool Mill – Barra do Bugres, MT – has 30, 000 ha of sugarcane, capacity of 14, 000 t/day of sugarcane. The first in Brazil to produce: sugar, ethanol, energy and biodiesel Bioediesel Plant

Sugarcane areas in Brazil Amazon forest Pantanal wetlands Atlantic coast forest

Sugar and Ethanol Industries in Brazil, 2007

Sugarcane production and needs of irrigation High Medium Low Unproperly Fonte: Ministério da Agricultura

South Center Brazil´s sugarcane mills Moagem 2005 Moagem 2006 Moagem 2007 Moagem 2008 Moagem 2009 Fonte: CTC/UNICA

Sugar Cane Estimative Area in the State of São Paulo (2005 – 2015)

Areas for agriculture expansion in Brazil 106 millions hectares for agriculture

Source: Glencore

Estimate increase in Brazilian sugarcane production Milions of ton. 600 487 500 403 427 455 400 300 198 49% 200 47% 521 203 45% 210 43% 217 42% 200 100 205 51% 227 53% 559 252 55% 277 57% 304 58% 225 40% 334 60% 0 2005/06 2006/07 2007/08 2008/09 Increase of 30 millions t/year 2009/10 2010/11 For sugar For Ethanoll

Brazil´s sugar exportation Fonte: Ministério da Agricultura

BRAZILIAN ETHANOL PROGRAM 1975 – high oil import costs + low world sugar prices • Federal government promoted Ethanol production for ble • Credit guarantees and low interest loans for new distilleri • State trading enterprise began purchasing ethanol at high • A marketing program • Petrobras – ethanol distribution throughtout the country SULTS - Between 1975 and 1979, ethanol production increased m than 500%.

BRAZILIAN ETHANOL PROGRAM 1979 – Brazilian Government signed agreements with car companies for 100% ethanol powered cars RESULTS – Fiat, VW, MB, GM and Toyota produced 250, 000 ethanol powered cars in 1980 350, 000 in 1982 1985 – Troublesome period World oil prices dropped - reducing the benefit of replacing oil impor Brazil faced serious inflation problems and began a series of econom Differential price between ethanol and gasoline was eliminated. Differenciated loans for the construction of new distilleries were cut.

BRAZILIAN ETHANOL PROGRAM 1990 – Low profile for Brazil´s ethanol program – Government required that all gasoline sold in Brazil contained E 20% End of 1990´s – agreementes among Brazilian government and auto for development of flex fuel vehicles. 2001 – Government proposed a preferential tax for flex or ethanol fu a 14% sales tax, as compared to a 16% sales tax on non-ethanol fuel RESULT - Ford launched the first flex fuel prototype in 2002, with VW following in 2003.

First Brazilian car fuelled by a blend of ethanol and gasoline - 1925 Ethanol

Brazilian Ethanol Production 10³ L (1993 – 2007)

Productivity gains

Ethanol uses in Brazil 17 billions L / year 77% as fuel 40% of the fuel used in light vehicles 5% in food and perfume industries, and ethanol derived chemicals, 18 % exported Anhydrous ethanol - to blend with gasoline (20 -25%) Gasoline C Hydrous ethanol - directly as fuel. – Flex Fueled vehicles

Flex fuel vehicles in Brazil 88% on July/2007 Source: Anfavea

Market Projection Fuel Ethanol - Brazil

Source: G

Ethanol exported from Brazil Fonte: Ministério da Agricultura

countries Brazilian ethanol exports 2006/07 South Africa 2, 006 Angola 3, 178 Canada 18, 855 Colombia 10, 320 South Coreia 92, 273 Costa Rica 91, 265 El Salvador 181, 143 United States 1, 767, 060 France 8, 900 Ghana 6, 075 India Source: Ethanol (m 3) 10, 074 Jamaica 131, 643 Japan 225, 403 Mexico 50, 241 Nigeria 42, 680 Holand 346, 616 Sweden 204, 614 Venezuela 104, 606 Other countries 129, 905 TOTAL 3, 426, 857

Industrial Fermentation Process Evolution Parameters 1977 2007 75 - 80% 90 - 92% 95% >99% 108 -109/m. L 105 -106/m. L 18 - 22 h 6 - 10 h Yeast Recirculation ~70% >90% Yeast in the wine 4 -6% 8 -17% Fermentation gains Destilation gains Wine Contamination (n. bacteries) Fermentation time

Ethanol production costs and energy balance Retail Prices US$/gallon Gasoline $ 3. 03 Ethanol corn USA – 4, 9 billion galllons Energy balance Ethanol sugarcane Ethanol $2. 62 $ 3. 71 1: 1. 3 BRAZIL – 4 billion galllons Energy balance US production costs $ 1. 09 per gallon energy equivalent BR production costs $ 0. 87 per gallon Gasoline (E 25) $ 4. 91 Ethanol $ 2. 92 1: 8 $ 3. 88 energy equivalent Energy balance is the fossil fuel energy used to make fuel (input) compared with the energy in the fuel (output) Source: R. Covey, National Geographic, 2007

Hydrolisis process Dedini´s prototype 5000 L/day Concentrated acid Pre-treatment Chemical hydrolisis Diluted acid Enzimatic hydrolisis Organic solvent TECNOLOGIA DHR

ETHANOL PRODUCTION USING BAGASSE Potencial for conversion of Bagasse in ethanol

New technologies for ethanol production Bagasse hidrolysis 2007 2015 2025 Technology l/tc l/ha Conventional 85 6, 500 100 8, 200 109 10, 400 - - 14 1, 100 37 3, 500 85 6, 500 114 9, 300 146 13, 900 Hydrolise Total

Estimates for total ethanol consumption Ethanol demands Fuel 2004 2005 2006 2007 2008 2009 2010 12, 434 13, 084 14, 122 15, 512 16, 979 18, 521 20, 210 Industry Internal Exports market (*) 818 13, 252 2, 400 847 13, 931 2, 500 881 15, 003 2, 700 907 16, 420 3, 230 934 17, 913 3, 780 962 19, 483 4, 330 991 21, 201 5, 000 (*) do not include estimates for biodiesel production and ethanol byproducts mil m 3 Total 15, 652 16, 431 17, 703 19, 650 21, 693 23, 813 26, 201

Sugarcane energy x oil energy 150 kg of sugar ------ 2, 400 MJ 140 kg of bagasse ------ 2, 500 MJ 140 kg of straw ------ 2, 500 MJ 1 ton sugarcane stalks 7, 400 MJ 1 barrel oil 6, 000 MJ 1 ton of sugarcane = 1, 25 barrel of oil 85 tons sugarcane/ha = 630 GJ / ha or 105 barrel of oil 470 millions tons sugarcane = 587 millions barrel of oil

Electric and Mechanical Energy generation Mills and distilleries also generated 11. 3 TWh of electr mechanical power, most of it for self consumption. Th equivalent to 3% of the electric power consumed in th The use of bagasse as a fuel is equivalent to 20. 2 M tons of oil

ENERGY from sugarcane biomass (MW/year) Energy used to produce sugar and ethanol Energy excess, actually sold as electric energy Energy potencial – with actual technologies New technologies and increasing areas of sugarcane (5 -10 years) Fonte: Aneel/Unica

Usina Santa Cândida / SP 32 MW Fotos: Koblitz

GHG EMISSIONS BY THE SECTOR GHG emissions avoided by the sector in 2003 were as follows: - for ethanol replacing gasoline: 27. 5 million tons of CO 2 equivalent -for cane bagasse replacing fossil fuel in sugar production: 5. 7 million tons of CO 2 equivalent. For every additional 100 million tons of sugar-cane, 12. 6 million tons of CO 2 equivalent worth of emissions could be avoided over the next few years using ethanol, the bagasse and the additional electric power surplus.

Conclusions nce 1975, when Brazilian Ethanol Program was launched, it remains th gest commercial application of biomass for energy production and us in the world ver the last 22 years, savings amounted to 1, 8 billion US$/year with the replacement of ~ 200, 000 barrels of gasoline/day cial Impacts - More than 720, 000 direct jobs and 200, 000 indirect jobs ral areas – decreasing social and environmental disruption in big citie

Conclusions With high oil prices (> US$40/barrel) Economic incentive for Ethanol Program With low oil prices (< US$40/barrel) Ethanol Program depend upon its contribution curb the greenhouse New sugar mill and distilleries plants will to produce: sugar, ethanol, eletric Biodiesel, sucrose byproducts and ethanol from sugarcane biomass. effect Future - new technologies: bagasse and trash gasification and hydr Industrial automation, fermentation process – yeast bree precision agriculture, genetically modified sugarcane. Brazil is interested in establishing a global market for ethanol as a traded commodity.