Expert Meeting onParticipation of Developing Countries in

New Dynamic Sectors of World Trade:Review of the Energy Sector

Adjusting to the New Energy Economy

Geneva, 29 November – 1 December 2006

Amilcar GuerreiroEPE – Empresa de Pesquisa Energética

Energy Research GroupDirector

Panel 4The technological dimension of biofuels

2

Favorable geographic andnatural conditions

land quantity available toagriculture

soil characteristics

privileged climate conditions(sun, rain and etc.)

Technology developed

ethanol

biodiesel

cogeneration from bagasse

other uses

Low production cost

Brazil has a great potential to bioenergy (biofuel and bioelectricity)

Ethanol ProductionCost (US$/liter)

Country/Region

0.22-0.28Brazil

0.45-0.55European Union

0.30-0.35United States

Sources: Henniges, O.;Zeddies, J.: Fuel Ethanol Production in theUSA and Germany – a cost comparison,F.O. Lichts World Ethanol and Biofuels Report, vol 1, nº 11, 11/02/2003.

Why biomass is an effective alternative for Brazil

3

1 ton sugar cane1,718 x 103 kcal

1 crude oil barrel1,386 x 103 kcal

153 kg sugars and alcohol 608 x 103 kcal

276 kg bagasse (50% humidity) 598 x 103 kcal

165 kg cuts & leaves (15% humidity) 512 x 103 kcal

1 ton sugar cane = 1.2 crude oil barrel

Sugarcane has a high energetic contents

Biomass from sugarcane is an effective alternative

4

Forests

Cities, rivers and othersSavannahs and fields

Agriculture andpastures

Sugarcane today

Sugarcanepotential area

Others

100%851BRAZIL

0,6%5,5• Sugarcane today

12%102,0• Sugarcane potential

54%468Forests

9%77Savannahs and fields

2%17Cities, rivers and others

35%299Agriculture and pastures

%106 haOccupation

23%197,0• Others

Occupied area by agriculture and biomass production in Brazil

5

Wet Land Atlantic Costal Rain Forest

Sugar Cane

Amazonia Rain Forest

Wet Land Atlantic Costal Rain Forest

Sugar Cane

Amazonia Rain Forest

(Pantanal)

Potential of expansion for agriculture area in Brazil

6

(Pantanal)

Potential of expansion for agriculture area in Brazil

7

Why technology is very relevant for biofuels strategy

Because technology providesManagerial agricultural practicesSustainable cropsPlant variety selectionMaintenance of disease-free crops and biomassEfficient harvesting transport and storageControl of the plant's maturity and crop's harvest periodMinimization of lossesEfficient industrial converting process

8

Taking into accountSoil lifeWater resourcesMinimization of environmental impactsSocial-economic small rural communities inclusionProjects legitimating (social and environmental acceptance)

Why technology is very relevant for biofuels strategy

9

• Industrial technology could be transferred successfully from country to country

• But, production chain is much complex and depends on domestic capabilities in all three technological dimensions

• For a worldwide biofuels market, all the technological dimensions are very relevant for developing countries and each one should be improved

• Regarding to industrial and agricultural dimensions, Brazil is in advanced stage, specially for sugarcane and crops

• Brazil has still to make improvements in its infra-structure system taking into account competitiveness and new technological in order to reach an worldwide scale

Technology

industrial

agricultural

Which technological conditions are necessary fordeveloping countries to become efficient biofuel producers

infra-structure

100

1000

1 10 100 1000

(US$/m3)

1980

1998200

300

400

500

600700800900

Ethanol Cumulative Consumption in Brazil (10Ethanol Cumulative Consumption in Brazil (1066 mm³³))

prod

uct io

n co

s tp r

o duc

t ion

cos t

Ethanol cost learning curveEthanol cost learning curve

~ 90 US$/bbl ~ 30 US$/bbl

Source: Coopersucar, 1998

Evolution of technology and production meant cost reduction(ethanol anhydrous)

11

Productivity, Actual production area and Saved area

Actual area

Saved area

Productivity

2.000

3.000

4.000

5.000

6.000

7.000

8.00019

7719

7819

7919

8019

8119

8219

8319

8419

8519

8619

8719

8819

8919

9019

9119

9219

9319

9419

9519

9619

9719

9819

9920

0020

0120

0220

03

Crop-year

Tota

l are

a cu

ltive

d (t

hous

and

ha)

20

30

40

50

60

70

80

Prod

uctiv

ity (

t Can

a/ha

)

Technological progress: productivity and saved area

FirstSteps Consolidation Stagnation Redefinition Current

Phase

Source: IBGE and UNICA

12

Biochemical conversion

Physical-chemical conversion

Thermochemical conversion (bio-refineries)

Which industrial technology routes are available

Sugar and ethanol plantAnaerobic digestionHydrolysis

Vegetable oil Bio-dieselH-bio

►

13

Catalytic hydro conversion of a blend of diesel oil and vegetable oil, in a HDT reactor, under controlled conditions (high temperature and pressure of hydrogen)

Diesel that comes from this process presents high quality: better ignition, lower density and lower sulphur index

Up to 2008,five Petrobras refineries will have installed HDT units, and the estimated production is 425 millions liters/yr

H – Bio process

14

BIOMASS

HEAT

ELECTRICITY

Gas

Directcombustion Gasification Pyrolysis

Thermochemical

Large scale

Charcoal

GasSteam Oil

CompressionExtraction

Physical-chemical

Vegetable oil

Anaerobicdigestion

FermentationDistillation Hydrolysis

Biochemical

Biogas Ethanol

Small scale

Developing

2nd industrial transformation stage

HEAT

ELECTRICITY

FUEL

HEAT

ELECTRICITY

FUEL FUEL

HEAT

ELECTRICITY

FUEL

Steamturbine

Gas turbine

Gas engine

Combinedcycle

Synthesisgas process

Synthesisgas process

Syntheticliquidsrefinery

Transesteri-fication(biodiesel)

Oil refinery(H-bio)

Gas engine

Steamturbine

Bioenergy products

Industrial technological routes

15

Possibility of ethanol and biodiesel integration

Agrosector

land

financingresources

technology

managementALCOHOL

PLANT

VEGETAL OILPLANT

BIODIESELPLANT

bioethanolvinassebioelectricity

biodieselglicerine

oilbran

sugarcane

biodiesel

grains

alcohol + wateranhydrous alcohol

vegetal oil

Technology is available for agro-industrial integration

Agro and industrial integration

EMPRESA DE PESQUISA ENERGÉTICA - EPE

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