Transcript Slide 1
The regulation and development of the biofuels industry in Brazil april/2008 Brazil biofuels ethanol biodiesel regulation conclusion Brazil • GDP – US$ 1,5 trillion - a 5.4% expansion in 2007 • Population – 186,5 million • Area – 8.547.403,5 km2 • 60% of preserved areas and other usages (cities, roads etc) • 40% of arable area • 29 sedimentary basins with oil and gas exploration potential (7,5 million km²) • Biofuels, oil and natural gas regulated under the same institutional environment (same law, same agency). Brazil biofuels ethanol biodiesel regulation conclusion Energy within a worldwide context • Accelerated growth of demand and prices • Strong dependence on non-renewable energetic sources • Negative impact on climate conditions • Instability within producer countries. Challenges • Security in the supply • Free and moderate prices • Control of the environmental impact. Brazil biofuels ethanol biodiesel regulation Brazil within the worldwide energetic context Brazil is where the world wants to get to conclusion Brazil automotive fuel matrix – 2007 About 18% of fuel consumed by the Brazilian fleet are already renewable Anhydrous ethanol 6,2% NonRenewable World– 86% Brazil – 55% Natural gas 4,32% B2 21,05% Renewable World – 14% Brazil – 45% Diesel 31,82% Gas 26,84% Hidrated Ethanol 9,77% Source: ANP/Simp Brazil biofuels ethanol biodiesel regulation conclusion Biofuel Legal definition A fuel produced from renewable biomass for use in internal combustion engines or, in accordance with regulations, for other types of energy generation, that could partially or totally substitute fossil fuels. (Law 11.097/2005) Besides being renewable, they reduce the emission of greenhouse effect gases. The gases produced during combustion are absorbed during the growth period of the plant. From vegetable or animal biomass, they enable the development of agribusiness, familial agriculture and employment opportunities. Brazil biofuels ethanol 1973 FIRST OIL CRISIS biodiesel 1974 BRAZIL CREATES THE PROALCOOL PROGRAM regulation conclusion 1980 1979 1977 SECOND PETROLEUM CRISIS ADDING OF 15% OF ALCOHOL TO GASOLINE ADDING OF 4.5% OF ALCOHOL TO GASOLINE 1983 ALCOHOL-POWERED CARS REPRESENT MORE THAN 90% OF SALES The 90’s 1992 2003 ALCOHOL BECOMES 20 TO 25% OF THE GASOLINE MIXTURE BIOFUEL-ENGINE CARS ARE PUT IN THE MARKET 1985 1989 RIO 92: SIGNATURE OF DOCUMENT ON CLIMATIC CHANGES PETROLEUM PRICES DROP AND GASOLINE PRICES BECOME EQUIVALENT TO THOSE OF ALCOHOL PERCENTAGE OF ALCOHOL ADDED TO GASOLINE REACHES 22% 2005 2007 THE NATIONAL BIODIESEL PROGRAM IS LAUNCHED THIRD PETROLEUM CRISIS January 2008 MANDATORY B2 STARTS March 2008 MANDATORY B3 IS ESTABLISHED BY CNPE AS OF JULY,2008 April 2008 ALCOHOL CONSUMPTION EQUALS THAT OF GASOLINE Brazil biofuels ethanol biodiesel regulation conclusion The Brazilian Industry of Ethanol The choice for sugar-cane Amount of energy obtained from each unit of fossil energy matter (gasoline or diesel) employed during the process of biofuels fabrication. 1,4 units of energy produced by ethanol from corn 3 units of energy produced by oil seeds 9,2 units of energy produced by ethanol from sugar-cane Sources: Unica, National Geographic e Luiz Horta Nogueira Brazil biofuels ethanol biodiesel regulation conclusion Use of soil in Brazil The Canasat Project (850 million hectares) Total arable land 40% The sugar-cane cultivation region is more than 2000km away from the Amazon Forest Total preserved areas and other uses 60% Cane for ethanol, 3.40 The Amazon is improper for sugar cane culture and is a protected area Cane for sugar, 7.80 Orange, 0.90 Brazil has the biggest area for agricultural expansion in the world: 100 million hectares Pasture ans avaliable land, 277.00 (340 million hectares ) Sources: IBGE, Conab e Unica see map Brazil biofuels ethanol biodiesel regulation conclusion Applications and benefits to the environment Product Application Environmental Impact Anhydrous ethanol Fuel blended Less CO2 in atmosphere Hydrated ethanol Flex fuel vehicles Reduction of fossil fuel Biomass Energy generation Lower costs Ethane Chemistry industries and biodegradable plastic Recyclable products To produce 1.000L of ethanol 309kg of CO2 are liberated To produce the same amount of energy the gasoline production cycle liberates 3.368 kg of CO2 The difference The gasoline emits 3.059 kg more of CO2 in the atmosphere biofuels ethanol biodiesel regulation conclusion FLEX + Ethanol Gasoline •356 producers •22.556 billion liters production in 2007 Hydrated ethanol consumption Flex Vehicles Gasoline Vehicles Vehicles sells 49,39% 2500 9.242 2000 27,3% mil veículos 1000 Total 29,3% 500 2006 42,6% 1500 6.187 mil m³ Brazil 2007 2004 2005 2006 2007 Brazil biofuels ethanol biodiesel regulation conclusion Biodiesel Legal definition A fuel produced from renewable biomass for use in compressionignition internal combustion engines or, in accordance with regulations, for other types of energy generation that could partially or totally substitute fossil fuels. (Law 11.097/2005) Brazil biofuels ethanol biodiesel regulation conclusion Base of the program To discourage any action that may generate environmental damage or predatory competition with foodstuff cultures. Incentive to production • Creates the concept of “Social Fuel”, which is a product by the commitment of the biodiesel producer with the family agriculture. • Establishes the federal taxation model as a function of the kind of producer, region and type of oil producing seeds. Generation of demand and regulation of offer • Establishes a minimum percentage of the mixture of biodiesel to the actual diesel, besides the follow-up of the insertion of the new fuel in the market . • Defines the ANP as the organ in charge of regulation of the biodiesel. Brazil biofuels ethanol biodiesel regulation conclusion Raw Materials Soy Castor beans Animal fat or lard Palm Sunflower Rapeseed Babassu Peanut Tucuma Brazil biofuels ethanol biodiesel regulation conclusion Participation of biodiesel in the diesel market 2005 to 2007 2% optional; potential market: 840 million litres per year Jan 2008 to Jun 2008 2% mandatory; crystalized market 1 billion litres per year Jul 2008 to 2012 3% mandatory; crystalized market: 1,2 billion litres per year From 2013 on 5% mandatory; crystalized market: 2.4 billion litres per year Brazil biofuels ethanol biodiesel regulation conclusion Diesel and biodiesel market Consumption Biodiesel production 2006 402.726 Biodiesel, 2,278 2007 Biodiesel 12.959 Pure diesel 28.508 1.000 m³ Pure diesel, 36,730 69.002 736 2005 2006 2007 Brazil biofuels ethanol biodiesel regulation conclusion Regulation: the role of ANP • Regulation of the current production and supply chain. • Organization of surveys towards biofuels trade. • Establishing of updated specifications. • Development of Quality and Price Fuel Monitoring Programmes. • Enforcement actions all over the country. Brazil biofuels ethanol biodiesel regulation conclusion Supply Regulations Biodiesel •Law # 11.097/ 2005 - Introduces biodiesel to the Brazilian energy matrix and defines ANP´s assignments •CNPE Act # 5/2007 - Establishes the acquisition of biodiesel through public auctions to be held by ANP •MME Regulation # 284/ 2007 and MME Regulation # 301/2007 – Define policies for the implementation of the auctions to be held by ANP •ANP Act # 33/2007 - Establishes the minimal mandatory levels of biodiesel to be contracted in the auctions for 2008 •CNPE Act # 2/ 2008 - Increases the minimal percentage of biodiesel added to diesel to 3% Brazil biofuels ethanol biodiesel regulation conclusion Supply Regulations Ethanol • Law # 11.097/ 2005 - Defines ANP´s assignments regarding biofuels, including the authorization process for all activities related to the national supply of ethanol, with the goal of guaranteeing adequate supply • ANP Regulation# 116/ 2000 - Regulates retail sale activities • ANP Act # 36/2005 – Defines anhydrous ethanol and hydrated ethanol specifications for automotive use and mandatory addition of coloring to a anhydrous ethanol • ANP Act # 5/ 2006 - Electronic register of productive plants, remittance to ANP of data related to the commercialization of ethanol, and rules of commercialization to be adopted by productive plants. • ANP Act # 7/ 2007 - Limits to operations among distributors and observance of the brand. Brazil biofuels ethanol biodiesel regulation conclusion Ethanol Specifications ANP Act 36/2005, from December 6th 2005 (AEHC and AEAC) Key points • Produced from sugar cane • Anhydrous: The compulsory use is 25% in the blend • Hydrated: use pure in flex fuel vehicles • Inhibition of ethanol fuel adulteration Relevant difference: water level (White Paper) Brazilian solution: after 30 years of use, experience shows that the 0,4% level defined in Brazil does not create problems for final use in the 25% fuel blend. Brazil biofuels ethanol biodiesel regulation conclusion Biodiesel Specifications ANP Act 07/2008, from March 19th 2008 Key points • Takes regional diversity into account • Ester level (96,5%): Related to the purity of the product • Water level (500 ppm, max.): Related to performance • Stability to oxidation (6h, min): Related to stability during transportation and storage White Paper • Difference in end uses (light and heavy vehicles); • Differences in composition and blends (B100 in Europe; B20 in USA and B2 in Brazil); • Source differences; • Difference on legislated emissions. Brazil biofuels ethanol biodiesel regulation conclusion Challenges to the usage of biofuels in the global market • Elimination of technical barriers is vital for sustainable biofuels in the world market. • Acceptance of the biofuels in the market depends on transparency and trustworthiness of the fuel which should be obtained by standardization. • Development of consistent terminology and reference materials. • Deepening of standards harmonization has to take into account essentially the development of world test methods appropriate for fuels from different sources, and also limits of properties wherever possible. • Creation of worldwide specification must cover all ranges of products (wider feedstocks base) and be consistent with different engines. Thank you! Nelson Narciso Director [email protected] Tel: 55 21 2112-8152