Apresentao do PowerPoint

1
Ethanol in Brazil a successful
experience Ministry of Agriculture, Livestock
and Food Supply, Ministry of Development,
Industry and International Trades Ministry of
Mines and Energy Washington - March, 2006
2
Economic Agents of Sugar Cane Industry
Sugar Cane Agriculture Phase
Sugar and Alcohol Industrial Phase

• 50 thousand sugar cane growers

• 346 Industrial Plants

Regulatory Domain Ministry of Agriculture
Regulatory Domain Ministry of Mines and Energy
/ ANP (National Petroleum Agency)
Gas Stations

• 32,030 Gas Stations sell alcohol.
• (92 of total gas stations in Brazil)
• Mercado de Preços Livres

Fuel Distributors
Exporters

• 160 Operating Distributors
• Only distributers may blend ethanol with motor
  gasoline

• 2.38 Billion litters exported in 2004

Fonte MAPA MME MDIC - 2005
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Why BIOFUELS?

• Environmental gains
• - carbon sequestration
• - lower emission levels in consumption
• Renewability
• - short production cycle
• - man-controlled process
• Economic aspects
• - new demand component
• - impacts on trade balance
• Social aspects
• - jobs creation
• - income deconcentration

4
BIOFUELS a natural aptitude in Brazil
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Why choosing ETHANOL?

• Renewable
• Zero Carbon Balance
• Not dependent of petroleum
• Large scale of production
• High miscibility with gasoline and it is a
  perfect substitute for tetraethyl lead
• Oxygenated Compound
• Reduces row emission
• Low toxic
• Sulfur free

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Why choosing SUGAR CANE?

• Exceptional life cycle balance (the production
  of 1m³ of alcohol allows for the reduction of 2.6
  tons of CO2).
• Highly favorable energetic balance.
• Increases in industrial efficiency, with lower
  sugar production costs.
• Improvement in sugar quality.
• Market diversification and the reduction of oil
  dependency.

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Why choosing SUGAR CANE? (continuing)

• Equivalent energy 1 ton / sugar cane 1.2
  barrel / oil.
• Energy distribution 1/3 on sugar juice, 1/3 on
  bagasse, and 1/3 on straw.
• Process otimization allows to transform mills
  into thermoelectric plants.
• Possibilities straw and bagasse burning or
  gasification, or alcohol production by hydrolysis.

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Physical productivity comparison
Source MAPA
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Current Matrix of Vehicle Fuels
Diesel
2005
53.9
()
VNG
2.9
Gasoline A
26.2
Anhydrous Alcohol
Hydrated Alcohol
8.7
8.3
Share of Regular Gasoline(1) 26.2 8.7 34,9
Share of alcohol 8.7 8.3 ? 17
(1) The gasoline available in Brazilian Gas
Stations is added with 25 of alcohol.
Source ANP ABEGAS 2006 Elaborated by MME -
2006
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ALCOHOL FUEL HISTORY IN BRAZIL
11
Alcohol with motor gasoline 80 years of
experience
First tests using ethanol blended to gasoline
1979 vehicles manufacturers started selling
100 hydrous alcohol cars
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Brazilian Automotive Market by Fuel Kind
Great share of alcohol cars more than 80
Sales of new alcohol cars fallen
13
Brazilian Experience nowadays
1) Since 2003, 31 new models of Flex-Fuel
Vehicles, by nine automakers it can use any
mixture of gasoline and alcohol, from 0 to 100,
without any action of car driver. 2) In
December-2005, Flex Fuel vehicles sales
represented 73 of total light vehicles sold
(2003-2005 1,245,201 units).
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Nowadays Brazilian Automotive Market by Fuel Kind
Start of Flex-Fuel Sales
Brazilian Light Vehicles Market Sales
5
100
20
80
60
73
40
20
0
jan/03
jun/03
nov/03
abr/04
set/04
fev/05
jul/05
dez/05
Flex (Alcohol or Gasoline)
Alcohol (Pure)
Gasoline
Diesel
Source Anfavea - 2006
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Sugarcane Cropped and Preserved Areas due to
Technological Improvements
1 ton of sugarcane 80 liters of alcohol 1
hectare of sugarcane 6 m3 of alcohol
Source CIMA
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The success of the ethanol replacing gasoline...
Total economy of 1,09 billion boe or 22 months of
the present Brazilian petroleum production
This curve shows how much gasoline would be
necessary to satisfy the fuel demand for light
vehicles supposing the non-existence of the
Brazilian Ethanol Program
IN THIS PERIOD, THE USAGE OF ETHANOL FUEL IN
BRAZIL HAS PREVENTED THE EMISSON OF 615 MILLION
TONS OF CO2
Source Ministry of Mines and Energy Brazilian
Energy Balance 2005 and Laura Tetti USP 2002
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ETHANOL as a new commodity...

• Good business for tropical countries
• Challenges to overcome
• - regular supply (short-term)
• - predictable prices
• - guaranteed supply (long-term)

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How to start a program of blending ethanol with
gasoline?

• Infrastructure installations and logistic
• Technical and formal questions
• Economic questions
• Instruments for supply garanty
• Fiscal questions
• Consumer reaction
• GENERAL RULE
• There isnt any general prescription to launch
  such a program. Each Country has to design its
  own model.

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Conclusions

• Ethanol can be an excellent business, specially
  that traditional sugar cane producers
• Producing and blending ethanol with gasoline are
  simple tasks, if all the process is carefully
  planned
• Brazil learned with its own mistakes. The other
  countries dont need to do the same
• We are interested in share our experience,
  specially because we need the help of other
  suppliers to organize the market.

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Thank you! Contacts Ministry of Agriculture,
Livestock and Food Supply daa_at_agricultura.gov.br
Ministry of Development, Industry and
International Trades Phone 55 (61)
2109-7293 Ministry of Mines and Energy Phone 55
(61) 3319-5106
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Incentives established by the Pro-Alcohol at That
Time

• Alcohol price lower than gasoline price
• Guaranteed remuneration to the producer
• Tax reduction for hydrous alcohol cars
• Loans for alcohol producers to increase their
  capacity
• Gas stations were obligated to sell alcohol
• Maintenance of strategical alcohol stocks

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Problems and solutions of a alcohol-fueled cars
Ignition difficulties during cold weather
Auxiliary gasoline tank
Metal corrosion (tank, exhaust pipe, fire
injection bomb components)
Substitution of tin and iron for aluminium and
stainless steel
Drying of plastic and rubber parts (pipes in
general)
Substitution for more resistent materials and
the use of additives
Increase in compression rate, RD and subsidies
to consumers during the programs initial phase.
Consumption increase (alcohols heating capacity
is 30 lower than gasolines)