THE IMPORTANCE

OF BIOFUELS
Workshop & Business Forum
Sustainable Biomass Production for the
World Market, Unicamp, 02/12/05

Luiz Carlos Corrêa Carvalho

Brazilian Sugar and Ethanol
Sectorial Chamber -
Ministry of Agriculture,
Pasture and Supply
SINERGY: FOSSIL vs RENEWABLE FUELS

TO EXPAND THE
EFFICIENCY IN BIOENERGY
NATURAL GAS PRODUCTION
USE AND USE

EFFICIENCY IN EFFICIENCY IN
OIL USE BIOENERGY USE

GHG REDUCTION CARBON UPTAKE

IN OIL AND BY RENEWABLE
NATURAL GAS FUELS
USE
 The challenge of Peak Oil
• Our economies are totally oil
dependent
• Economic progress requires
growth
• Growth requires oil, preferably
cheap oil
• Fuel changes require time and
large investments which in turn
require energy
• What is at risk? History shows us
that supply shortfalls lead to
high oil prices and high oil prices
lead to economic recessions

Source: Chris Skrebowski, The End of Oil – Conference, London, 11th october 2005
 Why does ‘Peak Oil’ matter?
• Our economies are totally oil dependent
• Economic progress requires growth
• Growth requires oil, preferably cheap oil
• Fuel changes require time and large
investments which in turn require energy
• What is at risk? History shows us that supply
shortfalls lead to high oil prices and high oil
prices lead to economic recessions

Source: Chris Skrebowski, The End of Oil – Conference, London, 11th october 2005
 The depletion challenge

Source: Chris Skrebowski, The End of Oil – Conference, London, 11th october 2005
 A visual summary
100000
80000
New fields
60000
40000 Declining
production
20000
0
05

06

07

08

09

10

11

12
20

20

20

20

20

20

20

20

Source: Chris Skrebowski, The End of Oil – Conference, London, 11th october 2005
Gas discovery is also falling short
• Gas discovery peaked in 1970s
• Demand first exceeded discovery in 1985
then continuously from 1990 to 1995
• Since 2001discovery has been under half
of usage
• Gas production is already falling in the
USA, Canada, UK, Germany, Italy and
New Zealand
GDP & ENERGY PER CAPITA : GOALS FOR DEVELOPING COUNTRIES

goal
 THE EVOLUTION OF THE CAR,
SINCE THE XX CENTURY UNTIL
THE HIDROGEN ERA
AND
THE DIRECT CORRELATION
BETWEEN CAR, CARBON
EMISSIONS AND GREENHOUSE
EFECT
Temperature Change (ºC)

CO2 in Atmosfere
North Hemisphere

CO2 LEVELS

TºC

TºC Restab
 Oil dominates its markets
• 80-95% of all transport is fuelled by oil products

• 70-75% of all oil is used for transportation

• All petrochemicals are produced from oil

• 99% of all lubrication is done with oil products

• 95% of all goods in the shops get there using oil

• 99% of our food involves oil or gas for fertilisers,

agrochemicals, tilling, cultivation and transport

Source: Chris Skrebowski, The End of Oil – Conference, London, 11th october 2005
 Delaying ‘Peak Oil’
• Economic slowdown/recession
• Demand destruction via high prices
• Middle East opening to investment
• Peace in Iraq…..etc
• But, accelerating projects produces
cost inflation rather than more oil
• Systems working better than expected

• Biofuels
 BIOFUELS APPROACH

1. May be easier to market than other alternative fuels,

considering performance, infrastructure,
and other factors;
2. Can play a significant role in climate change policy
and in measures to reduce GHG;
3. Important increase in production and use, supported by
government policies;
4. Largely agriculture – driven ( more than by energy
concerns );
5. Positive impacts for rural economy
6. Potential to be commodity, increasing benefits and
lowering costs.
 RENEWABLE ENERGY TODAY

TWO PRINCIPAL GOALS:

• POVERTY ALLEVIATION
• CLIMATE CHANGE MITIGATION

To give access to reliable, To protect the global

affordable and environment, in the
environmentally context of climate change
safe energy services from fossil fuel combustion

To correct To decarbonize

Source: Enrique Iglesias, President, Inter-American Development Bank, International

Konferenz für Erneuerbare Energien, Bonn, 03/06/04
 WORLD:
PERSPECTIVES FOR RENEWABLE ENERGY

% TOTAL YEAR
13,5 2005
20,0 2030
>30,0 2050

4 IMPORTANT FACTORS:

Intensity and availability of renewable sources;

Maturity of renewable’s technology;
Market rules and government
Rick Sellers, IEA, 2005
 AGRICULTURE IMPACTS WITH BIOMASS
PRODUCTION
FOR ENERGY PURPOSES

6 EJ WILL BE THE AMOUNT OF

“
LOW-COST ETHANOL ( 240 BI LTS)
THAT COULD BE PRODUCED GLOBALLY
WITH THE LARGEST PRODUCTION OF
SUGARCANE IN BRAZIL AND INDIA “

Source :IEA, 2004

 ETHANOL AND THE REAL BRAZILIAN LEARNING CURVE

market (ethanol prices)

Market market (Rotterdam-

Gasoline price)
Conditions

Ethanol Acumulated Production ( 1000 m3 )

Source: Goldemberg,J. & Macedo,I., 2005

IND. UNITS
N/NE -126
C/S - 219
TOTAL- 345

(50 new )
 ETHANOL AND BIODIESEL SINERGIES

FOOD
FOSSIL

FUEL

ELETRIC

ENERGY
BIOFUELS
 FOOD AND ENERGY
•IS THERE ANY MARKET RELATION
BETWEEN BOTH AGRICULTURES ?
•IS THERE LAND AVAIABLE?
PRICE’S EQUIVALENCE :
SUGAR AND GASOLINE

Sugar in
Ethanol
Equivalent

Gasoline - Nymex
 IF
10% ETHANOL IN GLOBAL DEMANDED GASOLINE (blends)

Ex. 1. Developing countries and Non OECD countries

Necessary ethanol volume:
32,7 billion litres
Base Brazil......necessary area: 5,6 million ha
(actual sugarcane area in Brazil)

Ex. 2. OECD countries

Necessary ethanol volume:
84,0 billion litres
Base Brazil......necessary area: 14,4 million ha

Ex.3. All countries

Necessary ethanol volume:
116,0 Billion Litres
(actual soybean area in Brazil)
 Recent WTO Initiatives
Affecting Biofuels
At the Doha Ministerial meeting of the WTO in
Cancun, September 2003, the declaration called for
negotiations on “the reduction or, as appropriate,
elimination of tariff and non-tariff barriers to
environmental good and services”. Negotiations will
continue and biofuels may be included in future lists
of environmental goods and services for which tariff
reductions are negotiated.
 Planning justified?
“When Noah built the
ark….…………
………..it wasn’t raining”

Source: Chris Skrebowski, The End of Oil – Conference, London, 11th october 2005
 •

TRANSPORTATION SECTOR
SUSTAINABILITY AS A GLOBAL ACTTITUDE