Conference on. Biofuels: an option for a less carbon-intensive economy. 4-5 December Bioenergy for the future. by:

Transcription

1 Conference on Biofuels: an option for a less carbon-intensive economy 4-5 December 2007 Bioenergy for the future by: Mauricio T. Tolmasquim President Empresa de Pesquisa Energética EPE The views expressed are those of the author and do not necessarily reflect the views of UNCTAD

2 Bioenergy for the Future Mauricio T. Tolmasquim President of Empresa de Pesquisa Energética EPE

3 Summary World Biofuel Market Motivation for Biofuels Biofuel Market Growth Brazilian Outlook World Biofuel Challenges 3

4 Summary World Biofuel Market Motivation for Biofuels Biofuel Market Growth Brazilian Outlook World Biofuel Challenges 4

5 World Ethanol Market 2006 World Total Market (Billion Liter per Year) Production 46.6 Consumption 45.7 International Trade 3.7 Billion Liter per Year 20,3 18,4 18,0 14, Production Consumption International Trade Ethanol Source 2006 USA From Corn 97% From Other Feedstocks 3% Brazil From Sugarcane 100% EU-25 Wheat 70% Corn 10% Barley 15% Rye 5% ,5 3,3 3,5 4,1 3,9 0,2 1,8 2,3 1,0 1,0-0,3-0,4 USA -2,6 Brazil EU 25 China India Others Others: includes Russia, South Africa, Saudi Arabia, Thailand, Ukraine, Canada, Poland, Indonesia, Argentina, Australia, Japan, Pakistan, Philippines, South Korea, Guatemala, Cuba, Ecuador, Mexico, Nicaragua, Mauritius, Zimbabwe, Kenya and Swaziland Source: FAPRI Agricultural Outlook 2007 Renewable Fuels Association

6 World Ethanol Market 2016 World Total Market (Billion Liter per Year) Production 88.4 Consumption 87.3 International Trade 4.7 Billion Liter per Year 47,7 48,9-1,2 28,5 23,7 5,5 6,4 4,6 2, Production Consumption International Trade 4,8 5,1 2,9-0,5-0,7 USA Brazil EU 25 China India -0,9 Ethanol Source 2016 USA From Corn 92% From Other Feedstocks 2% Cellulosic 6% Brazil From Sugarcane 100% EU-25 Wheat 70% Corn 10% Barley 15% Rye 5% Source: FAPRI Agricultural Outlook 2007 Renewable Fuels Association

7 World Total Market World Biodiesel Market (Billion Liter per Year) Production/ Consumption Billion Liter per Year , , ,5 3,3 1,7 0,1 USA Brazil EU 25 Brazil's projections in accordance with federal law /05 Sources: PDE-EPE (2007) FAPRI Agricultural Outlook

8 Summary World Biofuel Market Motivation for Biofuels Biofuel Market Growth Brazilian Outlook World Biofuel Challenges 8

9 Energy Security Motivations for Biofuels (reducing dependence on oil) Sustainable Social Inclusion Promote renewable energy production reducing GHG emissions 9

10 Greenhouse gas emission by sector - World Agriculture; 13,5 Greenhouse Gas Emission by Sector (percentage) Waste; 3,6 Transportation; 13,6 Land Use Change; 18,2 Eletricity and Heat; 24,6 Industrial Processes; 3,4 Fugitive Em issions; 3,9 Industry; 10,4 Other fuel combustion; 9 10

11 Sugar-cane Potential to Avoided Gas Emissions (ton COequiv/Ha.year) Abatement of 640 million ton of CO 2 equivalent as result of Brazilian Ethanol Program 11

12 Summary World Biofuel Market Motivation for Biofuels Biofuel Market Growth Brazilian Outlook World Biofuel Challenges 12

13 Outlook of Biofuels in the USA 90 EIA 2007, EIA 2006, EPAct 2005 and H.R , ,1 Billion liters ,9 26,5 32,2 39,7 45,4 47,7 50,0 28,4 52,2 54,5 56,8 49,5 42, Year EIA 2007 EIA 2006 EPAct 2005 H.R.6i This Bill (H.R.6) is on the Congress and probably will be the new standard for biofuels on the USA. 13

14 Outlook of Biofuels in the EU Europe Union - 10% of Biofuel on Billion Liters ,35 15,25 17,15 19,04 20,94 22,84 24,74 26,63 28,53 30, Year 14

15 Summary World Biofuel Market Motivation for Biofuels Biofuel Market Growth Brazilian Outlook World Biofuel Challenges 15

16 Brazilian Energy Matrix 2006 Domestic Energy Supply Structure Total: 230 millions of toe Sugar-cane and by-products Other renewables 15.9% Oil and by-products 13.7% 38.6% 14.9% 6.4% 9.4% Hydraulic and Electricity 1.2% Uranium Coal Natural Gas Source: Brazilian Energy Balance, EPE,

17 Renewable Matrix Comparison Domestic Energy Supply Structure OECD Countries (2004) 6,0 94,0 World (2004) 13,3 86,7 Brazil (2006) 44,5 55,5 Renewables Non-renewables 0% 20% 40% 60% 80% 100% Source: Brazilian Energy Balance, EPE, 2007 Key World Energy Statistics, IEA,

18 Two main issues affecting Brazil Ethanol Market FLEX FUEL Exports 18

19 Light Vehicles Domestic Fleet Forecasts for Light Vehicles Fleet in Brazil Light Vehicles Domestic Sales Percentage Gasoline Ethanol Flex fuel Diesel % 27% 2% % 92% 4% % 12% 6% % 2% 3% % 1% 6% % 76% 4% % 85% 4% % 85% 4% Source: EPE, 2007; ANFAVEA, 2007 Forecasts indicate more than 19 millions of flex fuel vehicles in Brazilian fleet in

20 Brazil's Long Term Study 2030 Ethanol on 2030 Matrix (million m³/year) Ethanol Production Ethanol Consumption Ethanol Exportation

21 The Brazilian Biodiesel Production and Use Program Stages of Brazilian Biodiesel Program Law n º 11,097/05 Set the mandatory blending of biodiesel with mineral diesel and regulate the insertion of the new fuel in the market to to Forward (Government may bring the aim forward to 2010) 2% Authorized Potencial Market 840 millions liters/year 2% Mandatory Firm Market 1 billion liters/year 5% Mandatory Firm Market 2.4 billion liters/year 21

22 Summary World Biofuel Market Motivation for Biofuels Biofuel Market Growth Brazilian Outlook World Biofuel Challenges 22

23 World Biofuel Challenges Expand production protecting the Environment Expand production avoiding intersection on Food sector Reduce production costs 23

24 Reduce production costs Area Productivity Source: IEA (2005) and MTEC Source: O. Henniges and J. Zeddies, Economics of Bioethanol in the Asia-Pacific: Australia-Thailand-China, in F.O.Licht s. World Ethanol and Biofuels, vol. 3, n. 11,

25 8,000 7,000 6,000 5,000 4,000 3,000 2,000 Stages of Brazilian Ethanol Program Productivity, Actual production area and Saved area Productivity Saved area Actual area Crop-year Total area cultivated (thousand ha) Productivity (tcana/ha) Technological Progress First Steps Consolidation Stagnation Redefinition Current Phase

26 Expand production avoiding intersection on Food sector Sugar-cane Land use on 2030 Matrix Land Use (million ha) Sugar-cane Production (million tone/year) 458 1,140 26

27 Land Use in Brazil (Dimensions and Soil Occupation) 10 6 ha 2.4% 7.1% Amazon Forest Rain and Protected Areas % Cities, Roads, Bodies of Water and Others Farming Production Areas Pasturelands 210 Temporary and Permanent Cultures % 43.0% 7.2% 0.6% 10.6% Cultivated Forests 5 Agro-frontier 90 Other Uses 60 BRAZIL 851 Source: SPAE/MAPA, 2006 million ha Total Sugar-cane 6,2 13,9 Sugar-cane for Ethanol 3,1 8,3 27

28 Thanks EMPRESA DE PESQUISA ENERGÉTICA - EPE Av. Rio Branco, 1 11 o andar Rio de Janeiro RJ Tel.: + 55 (21) Fax: + 55 (21)