Conference on Biofuels - Unctad
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
Bioenergy for the Future Mauricio T. Tolmasquim
President of Empresa de Pesquisa Energética – EPE
Summary
World Biofuel Market Motivation for Biofuels Biofuel Market Growth Brazilian Outlook World Biofuel Challenges 3
Summary
World Biofuel Market Motivation for Biofuels Biofuel Market Growth Brazilian Outlook World Biofuel Challenges 4
World Ethanol Market
2006 World Total Market
(Billion Liter per Year)
Production
46.6
Consumption
45.7
International Trade
Ethanol Source USA
3.7
From Corn
97%
From Other Feedstocks
60
2006
Billion Liter per Year 50 Production
Consumption
International Trade
40 30 20
2006
18,4
20,3
18,0
3%
Brazil From Sugarcane
100%
EU-25 Wheat
70%
Corn
10%
Barley
15%
Rye
14,6
5%
10 3,5
4,1 3,9
3,3 3,5
0,2
0
USA
-2,6
Brazil
-0,3
EU 25
China
1,8 2,3
1,0 1,0 -0,4
India
Others
-10
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 2007
5
World Ethanol Market 2016 World Total Market
(Billion Liter per Year)
Production
88.4
Ethanol Source
Consumption
87.3
USA
International Trade
From Corn
4.7
60
2016
Billion Liter per Year 50
47,7
48,9
Production
2016
Consumption
International Trade
40
92%
From Other Feedstocks
2%
Cellulosic
6%
Brazil From Sugarcane
100%
EU-25 28,5
30
23,7
20 10
4,8
5,5
USA
-1,2
Brazil
EU 25
70%
Corn
10%
Barley
15%
Rye
6,4
0
Wheat
4,6
-0,9
5,1 2,2 -0,5
China
5%
2,9
India
-0,7
Source: FAPRI Agricultural Outlook 2007 Renewable Fuels Association 2007
-10
6
World Total Market
World Biodiesel Market (Billion Liter per Year)
Production/ Consumption
2006
2016
22.4
32.8
60
Billion Liter per Year
2006
2016
50
40 27,8
30 20,8 20
10 1,7
1,5 0
USA
3,3 0,1
Brazil
Brazil's projections in accordance with federal law 11.097/05
EU 25 Sources: PDE-EPE (2007) FAPRI Agricultural Outlook 2007
7
Summary
World Biofuel Market Motivation for Biofuels Biofuel Market Growth Brazilian Outlook World Biofuel Challenges 8
Motivations for Biofuels
Energy Security (reducing dependence on oil) Sustainable Social Inclusion
Promote renewable energy production reducing GHG emissions 9
Greenhouse gas emission by sector - World Greenhouse Gas Emission by Sector (percentage) Agriculture; 13,5
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 com bustion; 9
10
Sugar-cane Potential to Avoided Gas Emissions
(ton COequiv/Ha.year)
Abatement of 640 million ton of CO2 equivalent as result of Brazilian Ethanol Program
11
Summary
World Biofuel Market Motivation for Biofuels Biofuel Market Growth Brazilian Outlook World Biofuel Challenges 12
Outlook of Biofuels in the USA EIA 2007, EIA 2006, EPAct 2005 and H.R.6 90 80
79,5
70
68,1
Billion liters
60 50 45,4 40
47,7
54,5
56,8
49,5
39,7 42,6
32,2
30 20
50,0
52,2
28,4
26,5 20,9
10 0 2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
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
Outlook of Biofuels in the EU Europe Union - 10% of Biofuel on 2020
35 28,53 30,43
30 26,63 Billion Liters
25
22,84
24,74
20,94
20 15
17,15
19,04
15,25 13,35
10 5 0 2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Year
14
Summary
World Biofuel Market Motivation for Biofuels Biofuel Market Growth Brazilian Outlook World Biofuel Challenges 15
Brazilian Energy Matrix 2006 Domestic Energy Supply Structure Total: 230 millions of toe Other renewables Sugar-cane and by-products
Oil and by-products
15.9% 38.6%
13.7%
14.9%
Hydraulic and Electricity
9.4%
6.4% 1.2%
Uranium
Coal
Natural Gas
Source: Brazilian Energy Balance, EPE, 2007
16
Renewable Matrix Comparison Domestic Energy Supply Structure
OECD Countries 6,0 (2004)
World (2004)
13,3
Brazil (2006)
Renewables
94,0
86,7
44,5
0%
20%
55,5
40%
60%
80%
100%
Non-renewables
Source: Brazilian Energy Balance, EPE, 2007 Key World Energy Statistics, IEA, 2005
17
Two main issues affecting Brazil Ethanol Market
Exports FLEX FUEL 18
Light Vehicles Domestic Fleet Forecasts for Light Vehicles Fleet in Brazil Light Vehicles Domestic Sales Percentage Gasoline Ethanol
Flex fuel
Diesel
1980
71%
27%
2%
1985
4%
92%
4%
1990
82%
12%
6%
1995
94%
2%
3%
2000
93%
1%
6%
2006
20%
76%
4%
2010
11%
85%
4%
2015
11%
85%
4%
Source: EPE, 2007; ANFAVEA, 2007
Forecasts indicate more than 19 millions of flex fuel vehicles in Brazilian fleet in 2015
19
Brazil's Long Term Study 2030 Ethanol on 2030 Matrix
(million m³/year) Ethanol Production Ethanol Consumption Ethanol Exportation
2006 17.8 14.4 3.4
2030 66.7 54.7 12.0
20
The Brazilian Biodiesel Production and Use Program Stages of Brazilian Biodiesel Program
ªLaw 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.
2005 to 2007
2%
2008 to 2012
2%
2013 Forward (Government may bring the aim forward to 2010)
5%
Authorized
Mandatory
Mandatory
Potencial Market 840 millions liters/year
Firm Market 1 billion liters/year
Firm Market 2.4 billion liters/year 21
Summary
World Biofuel Market Motivation for Biofuels Biofuel Market Growth Brazilian Outlook World Biofuel Challenges 22
World Biofuel Challenges Expand production protecting the Environment
Expand production avoiding intersection on Food sector
Reduce production costs
23
Reduce production costs Area Productivity
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, 2005
Source: IEA (2005) and MTEC
24
Technological Progress Stages of Brazilian Ethanol Program
7,000
First Steps
Consolidation
Stagnation
Redefinition
Current Phase
80 70
Productivity
6,000
60
Saved area 5,000
50
4,000
40
3,000
Actual area
2,000
Productivity (tCana/ha)
8,000
30 20
1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Total area cultivated (thousand ha)
Productivity, Actual production area and Saved area
Crop-year
25
Expand production avoiding intersection on Food sector
Sugar-cane Land use on 2030 Matrix
2006 Land Use (million ha) 6.2 Sugar-cane Production (million tone/year) 458
2030 13.9 1,140
26
Land Use in Brazil (Dimensions and Soil Occupation)
106 ha Amazon Forest Rain and Protected Areas
405
Cities, Roads, Bodies of Water and Others
20
Farming Production Areas
366 210
Temporary and Permanent Cultures
61
Cultivated Forests
5
Agro-frontier
90
BRAZIL
7.1%
24.7% 43.0% 7.2%
47.6%
0.6%
Pasturelands
Other Uses
2.4%
60 851
Source: SPAE/MAPA, 2006
10.6%
million ha Total Sugar-cane Sugar-cane for Ethanol
2006 6,2
2030 13,9
3,1
8,3 27
Thanks
EMPRESA DE PESQUISA ENERGÉTICA - EPE www.epe.gov.br Av. Rio Branco, 1 – 11o andar 20090-003 Rio de Janeiro RJ Tel.: + 55 (21) 3512 - 3100 Fax: + 55 (21) 3512 - 3199
28
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
Bioenergy for the Future Mauricio T. Tolmasquim
President of Empresa de Pesquisa Energética – EPE
Summary
World Biofuel Market Motivation for Biofuels Biofuel Market Growth Brazilian Outlook World Biofuel Challenges 3
Summary
World Biofuel Market Motivation for Biofuels Biofuel Market Growth Brazilian Outlook World Biofuel Challenges 4
World Ethanol Market
2006 World Total Market
(Billion Liter per Year)
Production
46.6
Consumption
45.7
International Trade
Ethanol Source USA
3.7
From Corn
97%
From Other Feedstocks
60
2006
Billion Liter per Year 50 Production
Consumption
International Trade
40 30 20
2006
18,4
20,3
18,0
3%
Brazil From Sugarcane
100%
EU-25 Wheat
70%
Corn
10%
Barley
15%
Rye
14,6
5%
10 3,5
4,1 3,9
3,3 3,5
0,2
0
USA
-2,6
Brazil
-0,3
EU 25
China
1,8 2,3
1,0 1,0 -0,4
India
Others
-10
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 2007
5
World Ethanol Market 2016 World Total Market
(Billion Liter per Year)
Production
88.4
Ethanol Source
Consumption
87.3
USA
International Trade
From Corn
4.7
60
2016
Billion Liter per Year 50
47,7
48,9
Production
2016
Consumption
International Trade
40
92%
From Other Feedstocks
2%
Cellulosic
6%
Brazil From Sugarcane
100%
EU-25 28,5
30
23,7
20 10
4,8
5,5
USA
-1,2
Brazil
EU 25
70%
Corn
10%
Barley
15%
Rye
6,4
0
Wheat
4,6
-0,9
5,1 2,2 -0,5
China
5%
2,9
India
-0,7
Source: FAPRI Agricultural Outlook 2007 Renewable Fuels Association 2007
-10
6
World Total Market
World Biodiesel Market (Billion Liter per Year)
Production/ Consumption
2006
2016
22.4
32.8
60
Billion Liter per Year
2006
2016
50
40 27,8
30 20,8 20
10 1,7
1,5 0
USA
3,3 0,1
Brazil
Brazil's projections in accordance with federal law 11.097/05
EU 25 Sources: PDE-EPE (2007) FAPRI Agricultural Outlook 2007
7
Summary
World Biofuel Market Motivation for Biofuels Biofuel Market Growth Brazilian Outlook World Biofuel Challenges 8
Motivations for Biofuels
Energy Security (reducing dependence on oil) Sustainable Social Inclusion
Promote renewable energy production reducing GHG emissions 9
Greenhouse gas emission by sector - World Greenhouse Gas Emission by Sector (percentage) Agriculture; 13,5
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 com bustion; 9
10
Sugar-cane Potential to Avoided Gas Emissions
(ton COequiv/Ha.year)
Abatement of 640 million ton of CO2 equivalent as result of Brazilian Ethanol Program
11
Summary
World Biofuel Market Motivation for Biofuels Biofuel Market Growth Brazilian Outlook World Biofuel Challenges 12
Outlook of Biofuels in the USA EIA 2007, EIA 2006, EPAct 2005 and H.R.6 90 80
79,5
70
68,1
Billion liters
60 50 45,4 40
47,7
54,5
56,8
49,5
39,7 42,6
32,2
30 20
50,0
52,2
28,4
26,5 20,9
10 0 2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
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
Outlook of Biofuels in the EU Europe Union - 10% of Biofuel on 2020
35 28,53 30,43
30 26,63 Billion Liters
25
22,84
24,74
20,94
20 15
17,15
19,04
15,25 13,35
10 5 0 2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Year
14
Summary
World Biofuel Market Motivation for Biofuels Biofuel Market Growth Brazilian Outlook World Biofuel Challenges 15
Brazilian Energy Matrix 2006 Domestic Energy Supply Structure Total: 230 millions of toe Other renewables Sugar-cane and by-products
Oil and by-products
15.9% 38.6%
13.7%
14.9%
Hydraulic and Electricity
9.4%
6.4% 1.2%
Uranium
Coal
Natural Gas
Source: Brazilian Energy Balance, EPE, 2007
16
Renewable Matrix Comparison Domestic Energy Supply Structure
OECD Countries 6,0 (2004)
World (2004)
13,3
Brazil (2006)
Renewables
94,0
86,7
44,5
0%
20%
55,5
40%
60%
80%
100%
Non-renewables
Source: Brazilian Energy Balance, EPE, 2007 Key World Energy Statistics, IEA, 2005
17
Two main issues affecting Brazil Ethanol Market
Exports FLEX FUEL 18
Light Vehicles Domestic Fleet Forecasts for Light Vehicles Fleet in Brazil Light Vehicles Domestic Sales Percentage Gasoline Ethanol
Flex fuel
Diesel
1980
71%
27%
2%
1985
4%
92%
4%
1990
82%
12%
6%
1995
94%
2%
3%
2000
93%
1%
6%
2006
20%
76%
4%
2010
11%
85%
4%
2015
11%
85%
4%
Source: EPE, 2007; ANFAVEA, 2007
Forecasts indicate more than 19 millions of flex fuel vehicles in Brazilian fleet in 2015
19
Brazil's Long Term Study 2030 Ethanol on 2030 Matrix
(million m³/year) Ethanol Production Ethanol Consumption Ethanol Exportation
2006 17.8 14.4 3.4
2030 66.7 54.7 12.0
20
The Brazilian Biodiesel Production and Use Program Stages of Brazilian Biodiesel Program
ªLaw 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.
2005 to 2007
2%
2008 to 2012
2%
2013 Forward (Government may bring the aim forward to 2010)
5%
Authorized
Mandatory
Mandatory
Potencial Market 840 millions liters/year
Firm Market 1 billion liters/year
Firm Market 2.4 billion liters/year 21
Summary
World Biofuel Market Motivation for Biofuels Biofuel Market Growth Brazilian Outlook World Biofuel Challenges 22
World Biofuel Challenges Expand production protecting the Environment
Expand production avoiding intersection on Food sector
Reduce production costs
23
Reduce production costs Area Productivity
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, 2005
Source: IEA (2005) and MTEC
24
Technological Progress Stages of Brazilian Ethanol Program
7,000
First Steps
Consolidation
Stagnation
Redefinition
Current Phase
80 70
Productivity
6,000
60
Saved area 5,000
50
4,000
40
3,000
Actual area
2,000
Productivity (tCana/ha)
8,000
30 20
1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Total area cultivated (thousand ha)
Productivity, Actual production area and Saved area
Crop-year
25
Expand production avoiding intersection on Food sector
Sugar-cane Land use on 2030 Matrix
2006 Land Use (million ha) 6.2 Sugar-cane Production (million tone/year) 458
2030 13.9 1,140
26
Land Use in Brazil (Dimensions and Soil Occupation)
106 ha Amazon Forest Rain and Protected Areas
405
Cities, Roads, Bodies of Water and Others
20
Farming Production Areas
366 210
Temporary and Permanent Cultures
61
Cultivated Forests
5
Agro-frontier
90
BRAZIL
7.1%
24.7% 43.0% 7.2%
47.6%
0.6%
Pasturelands
Other Uses
2.4%
60 851
Source: SPAE/MAPA, 2006
10.6%
million ha Total Sugar-cane Sugar-cane for Ethanol
2006 6,2
2030 13,9
3,1
8,3 27
Thanks
EMPRESA DE PESQUISA ENERGÉTICA - EPE www.epe.gov.br Av. Rio Branco, 1 – 11o andar 20090-003 Rio de Janeiro RJ Tel.: + 55 (21) 3512 - 3100 Fax: + 55 (21) 3512 - 3199
28
