OUTLOOK FOR OTTO-
CYCLE FUELS IN BRAZIL
ANP Program for Regulating the
Ethanol Market in Brazil
Rosângela Moreira de Araujo
Superintendent of Biofuels and Product Quality October 25, 2011
Ethanol-run cars represent over 90% of total sales
1979 1980
1973
First oil crisis
1974
Brazil creates the Proalcool Program
1977
Addition of 4,5% ethanol to gasoline
Addition of 15% of ethanol to gasoline
Second oil crisis
1983 1985
Percentage of ethanol added to
gasoline reaches 22%
1989
Oil prices fall and gasoline prices equal to ethanol’s
1992 RIO 92: Signature of
Document on climate changes. The 90S- Ethanol becomes 20 to 25% of the
gasoline mixture
The 90’s
Ethanol becomes 20 to 25% of the gasoline
mixture
2003 Launch of biofuel cars
2005 The National
Biodiesel Program is launched
2007 Third oil crisis
January
2008 Mandatory B2 starts
March 2008
Mandatory B3 is established by CNPE as
of July, 2008
July 2009
Mandatory B4 starts
2001
End of the deregulation process
January 2010 Mandatory B5 starts
September 2011 Law nº 12.490, 2011 establishes
the regulation f or the entire ethanol chain
Evolution of Biofuels in Brazil
Brazilian Fuel Ethanol
Brazilian Market
More than 30 years of commercial use;
Total production around 27,4 bi liters in 2010/11;
Increased demand with the flex-fuel technology (E20-E100);
Main national fuel for light vehicles in 2008 and 2009;
Brazilian fuel ethanol contributes for the mitigation of climate
change classified as advanced fuel;
Ethanol plants export bioelectricity (sugarcane bagasse) into
the grid;
Other uses: heavy vehicles (SP) and airplanes (test).
Legal Background
Law nº 9,478 / 1997
“Petroleum Law”
Article 8. ANP duties:
Implement the national policy for oil,
natural gas and biofuels with an
emphasis on:
protecting the interests of
consumers in price, quality and
product supply.
specifying the quality of petroleum,
natural gas, its derivatives and
biofuels.
ANP attributions contemplate the regulation and
authorization of activities related to production,
import, export, warehousing, storage,
transportation, transfer, distribution, and marketing
of biofuels, as well as assessment and certification
of its quality, supervising them directly or through
agreements with other organs of the Union,
States, Federal District or municipalities.
Adds and gives new wording to the provisions set forth in Law
9.478/1997, and expands the jurisdiction of ANP for the entire
biofuels industry.
Law 12,490 of September 16, 2011
Anhydrous/hydrated fuel ethanol
Gasoline C
Gasoline A
Plant
Primary Base
Retailer Collector Center
Secondary Base
Refinery
ANP Regulation
National Ethanol Supply
Before the Law 12,490/2011
Ethanol anhydrous/hydrated
Gasoline C
Gasoline A
Plant
Primary Base
Retailer Collector Center
Secondary Base
Refinery
ANP Regulation
National Ethanol Supply
After the Law 12,490/2011
Extraction of sucrose
(juice)
Raw
material
Treatment of the juice
Sugar
Fermentation
Distillation
Production
and storage
of ethanol
Concentration
ANP
Where ANP Acts in the Plant
Demand Evolution Gasoline A x Fuel Ethanol
9
Source:ANP/SAB/SIMP
Ethanol > Gasol. A
Ethanol> Gas A
Fuels Consumption in Brazil 1st Semester 2011 x 2010
Fuel thous.m³ variation, %
jan-jun/10 jan-jun/2011 11/10
Diesel B5 3.615 3.825 5,8
Biodiesel 181 191 5,8
Gasoline C 2.498 2.923 17,0
Gasoline A 1.937 2.192 13,2
Anhydrous Ethanol 561 731 30,3
Hydrated Ethanol 613 472 -23,0
Total Ethanol 1.174 1.203 2,4
Total Otto Cycle 3.111 3.395 9,1
LPG 1.328 1.398 5,3
Fuel Oil 275 370 34,6
Jet Fuel 495 548 10,9
Aviation Gasoline 4 4 -2,8
TOTAL 8.827 9.540 8,1%
Regulatory Stocks Law 12,490/2011
ANP Acts
Under Public Hearings
Establishment of criteria for hiring or direct acquisition of anhydrous fuel ethanol compatible with the purchase of gasoline A (2 public hearings);
Formation of anhydrous ethanol stock by the anhydrous ethanol producers and fuel distributors;
Establishment of requirements for the registration of the trader by the ANP;
Establishment of weekly information sending from ethanol suppliers and distributors to ANP in order to monitor more accurately the availability of anhydrous ethanol in the
domestic market in order to support decision-making of ANP and other competent bodies.
Expected Results
Within the implementation of these Acts and ethanol market
monitoring, ANP considers to obtain the following outcomes:
to guarantee the supply of anhydrous fuel ethanol and gasoline C;
to boost the competitiveness of hydrated fuel ethanol;
to reduce the uncertainties inherent in the market;
to contribute to reduce the volatility of prices of fuel
ethanol and gasoline along the supply chain.
Ethanol Fuel Producer
The fuel ethanol commercialized in
the country must be certified with
the emission of the Quality
Certificate.
Custody of a control sample and of
the Quality Certificate, that must be
available to ANP.
The number of the Quality
Certificate must appear on all tax
documents with its copy.
Sending to ANP all the analysis
results contained in the Quality
Certificates monthly.
Quality Control ANP Act 7/2011
Quality Control ANP Act 7/2011
Fuel Distributor
The hydrated ethanol distributor must issue an
Accordance Bulletin to assure the quality of the fuel
before the delivery to the retail market.
Custody of the Quality Certificates issued by the
fuel ethanol producers.
The distributor has the responsibility to blend
ethanol to gasoline.
ETHANOL
Quality Control ANP Act 7/2011
Retail
Quality Control Program in the service stations
for hydrated fuel ethanol and gasoline (E20).
The service station must analyze the fuel
ethanol and the gasoline C delivered by the
distributor (ANP Act 9/2007).
Tests:
a) Hydrated Fuel Ethanol: Aspect,
density and alcohol content (densimeter method);
b) Gasoline C (E20): Aspect, density and
anhydrous ethanol content (test-tube method).
Other Regulatory Activities
Interlaboratory programs:
conduction of 20 rounds and last round
with INMETRO using ethanol reference
material;
International participation in BIOREMA;
Standardization: follow-up actions under the
technical Committees of ABNT, INMETRO, ASTM,
ISO (quality and sustainability);
International WG: participation with the
Government to reduce technical barriers, as well
as international fora dealing with the product
specification and sustainability (USA, EU,
Mercosur and IBAS).
Fuel Ethanol Specifications
Property Unity Anhydrous Hydrated Premium
Density at 20ºC kg/m³ max. 791.5 807.6 to
811.0
799.8 to
802.7
Alcoholic Content at 20°C %v/v min. 99.6 95.1 to 96.0 97.1 to 97.8
%m/m min. 99.3 92.6 to 93.8 95.5 to 96.5
Ethanol Content, min. (imp) 98.0 94.5
Water %v/v max 0.4 4.9
Acidity mg/L max. 30
Electrical Conductivity µS/m max. 350
pH - - - 6.0 to 8.0
Copper mg/kg max. 0.07 -
Chloride mg/kg max. 1
Washed gum mg/100 mL max. 5
Appearance - Clear & No Impurities
Color - Orange (dye) no dye
Methanol %v/v max. 1
Hydrocarcarbons %v/v 3
Residue by evap. mg/100 mL max. 5
Sodium mg/kg max. 2
Sulfate mg/kg max. 4
Iron mg/kg max. 5
Program of Fuel Quality Monitoring
5% - North
20% - Northeast
9% - Midwest
45% - Southeast
21% - South
38,000 service stations
245,000 samples/year
Regional gas station distribution
Program of Fuel Quality Monitoring
Fuels Quality 2005/2011
International Harmonization
of Biofuels
Brazil / US / EU: Development of the "White Paper" for biofuels
(ethanol and biodiesel) to identify properties and possible limits
to be harmonized in the short, medium and long term (January
2008);
MERCOSUR: Report on the activities of the working group for
technical harmonization of biofuels - last meeting in September
2010;
On going: Discussion of proposals and cooperation to promote
alignment and mitigation of differences among methods and
specifications.
Final Remarks
The expansion of the ANP’s jurisdiction in the fuel ethanol sector, arising from the
Law 12,490/2011, enable ANP to implement actions in order to contribute for
strengthening the production and the market and to the security of supply;
Closing of public consultation of the rules for authorization of ethanol producer
plant as well as the rules for new tools for regulating market by stock ethanol;
The fuel ethanol spec reviewed in 2011 facilitate to reduce the technical barriers;
The Program of Fuel Quality Monitoring keeps on being a very important tool to
monitor and inspect the product quality as well as allows to define consistent
regulation to protect the consumer.
Outlooks
ANP can contribute to the consistent planning of energy under the economic
environmental and social aspects, in order to define the participation of ethanol,
considering its positive externalities and the alternatives in R&D&I (new generation
products begin to eclipse alternatives in the medium to longer-term);
ANP can reduce the asymmetric information: reliability for government actions and
market and provide transparency data to new investors;
It is vital to improve the international cooperation to achieve
sustainable biofuels market as well as to ensure the
development of fuel ethanol as commodities.
Thank you for your attention!
Rosângela M. Araujo
Superintendent of Biofuels and
Quality Product
phone: + 55 21 2112 8640
www.anp.gov.br