BRAZILIAN SUGARCANE ETHANOL Potential of Sustainability Willian Kimura, researcher
OUTLINE
1. Context
a) Economic
b) Social
c) Environmental
2. Case Study: Mitigation potential
3. Reflections and conclusions
2. CONTEXT
100% gasoline Ethanol used in
the gasoline
blend
27% anhydrous
+ 63% gasoline A
(sold in gas
stations)
Ethanol used
direct in the car
tank (sold in gas
stations)
Flex fuel technology: Possibility to use either gasoline or ethanol, in any proportion, to fill car tanks
Total Recoverable Sugar - TRS: Sugar content (1.76 kg of TRS produces 1 liter of ethanol)
1 gallon 3.78 liters 1 acre 0.40 hectare 1 US Dollar 3.50 Reais
DEFINITION AND CONVERSION FACTORS
Gasoline A Anhydrous Gasoline C Hydrous
Source: CONSECANA (2006)
North/Northeast (10%)
Source: CONAB (2016); UNICA (2016)
Center South (90%)
BIG FIGURES FROM THE SUGARCANE SECTOR
CURRENT SITUATION – SEASON 2015/2016
• Sugarcane production: 665.6 million tons
• Sugarcane area: 8.7 million ha (1.02% total area)
• Agricultural yield: 76.9 ton/ha
• TRS: 131.4 kg/ton of sugarcane
• Industrial yield: 5,725 liters of ethanol/ha (2x maize)
• Ethanol production: 30.5 billion liters
• 63% hydrous
• 37% anhydrous
• Sugar production: 33.5 million tons
• Bioelectricity: 20.2 TWh (10 millions houses)
a. ECONOMIC ASPECTS
THE SECTOR HAS BEEN FACING HARD TIMES
9
18 22
29
21
10
3 2 2 1 -2 -2 -3
-5
-14 -13 -9
-11 -9
2005
/06
2006
/07
2007
/08
2008
/09
2009
/10
2010
/11
2011
/12
2012
/13
2013
/14
2014
/15
2015
/16
Plant closed in Center-South Region
Source: UNICA (2015); CONAB (2016)
Estim
ative
350
400
450
500
550
600
650
700
750
2005
/06
2006
/07
2007
/08
2008
/09
2009
/10
2010
/11
2011
/12
2012
/13
2013
/14
2014
/15
2015
/16
2016
/17
(mill
ion
ton)
99
18
7
61
New Plant in Center-South Region Sugarane production (Brazil)
Estim
ative
HYDROUS MARKET DEPENDS ON GASOLINA PRICES
Source: EIA (2016); MDIC (2016); ANP (2016); BACEN (2016); Babcock et al. (2013)
0,8
1
1,2
1,4
1,6
1,8
jan
-10
abr-
10
jul-
10
ou
t-10
jan
-11
abr-
11
jul-
11
ou
t-11
jan
-12
abr-
12
jul-
12
ou
t-12
jan
-13
abr-
13
jul-
13
ou
t-13
(R$/
l)
Producer Brazilian Refinery Brazilian Import New York Harbor Ethanol Price
Gasoline Price = 70%
If 70%: Preference for ethanol
If 70%: Preference for gasoline
GASOLINE PRICE PREFERENCE OF COMSUMPTION IN FFV
b. SOCIAL ASPECTS
Source: UNICA (2015); CONAB (2016)
THE ENVIRONMENTAL PROTOCOL
SUGARCANE BURNING WILL BE FORBIDDEN
• Voluntary agreement in 2007
• 170 mills and 29 associations in São Paulo
State
• It represents more than 90% of the state’s
production
• São Paulo State represents 55% of the national
production
• Anticipation of the deadline to eliminate
sugarcane burning (for harvesting) from 2031
to 2017
• Significant environmental and health benefits
TRADE OFF BETWEEN ENVIRONMENTAL AND SOCIAL ISSUES
Source: UNICA & FERAESP (2015)
- 7%
- 12%
9%
CAGR
Project Renovação
(“RenovAction”):
aims to qualify former
sugarcane workers
Total people in
agricultural area:
reduced more than 85
thousand jobs
Sugarcane workers
(cane cutters):
reduced almost 2.5
times
Workers in
Mechanized area:
almost doubled the
jobs
c. ENVIRONMENTAL ASPECTS
IT IS FORBIDDEN SUGARCANE EXPANSION IN THE AMAZON BIOME
Source: MAPA (2009)
SUGARCANE AGROECOLOGICAL ZONING
• Exclusion of areas with native
vegetation;
• Exclusion of areas at the Amazon
Biome, Pantanal biome and Upper
Paraguay river Basin;
• Indication of areas with agricultural
potential without full irrigation (water
footprint);
• Indication of areas with slope lower than
12% (suitable for mechanization);
• Prioritize degraded and pasture areas.
REPLACING FOSSIL FUEL
Source: Macedo & Seabra (2008); MCTI (2015)
GASOLINE REPLACEMENT:
1.8 to 2.1 kg of CO2e
per liter of ethanol
(Reduction of 90%)
ETHANOL EXPORTED: It is not accounting for
Brazilian contributions
BIOELECTRICITY : Bioelectricity surplus:
430 kg CO2e/MWh
EMISISON FACTOR: Combined Margin
3. CASE STUDY:
MITIGATION POTENTIAL
SUGARCANE SECTOR PRODUCTION LEVELS
Source: : UNICA & Agroicone (2015)
INDEX 2014 STAGNATION 2030 EXPANSION 2030
Sugarcane production (Million ton)
630 731 1,015
Sugarcane areas (Million hectare)
8.7 7.7 10.7
Ethanol 2G consumption (Billion liter)
0 0.2 5.0
Bioelectricity
(TWh) 22 44 115
Ethanol consumption (Billion liter)
24.7 21.6 50.9
POSSIBILITY TO OFFSET 3 YEARS OF TRANSPORT SECTOR EMISSIONS
Source:
Mitigation Potential: Elaborated by Agroicone.
Transport Emissions: MCTI (2014), UNFCCC (2015), WRI (2015)
Annual emissions in
2012 (MtCO2e)
Total Brazil: 1,203
Transport sector
• Brazil: 200
• France: 132
• USA: 1.700
• China: 703
37 36 36 36 36 36 35 35 35 35 35 35 35 35 35 35
5 5 6 6 7 8 8 9 9 10 11 1 4 6 9 12 16 23
32 39
46 51
56 61
67 72
77
-
20
40
60
80
100
120
140
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
(mill
ion o
f tC
O2eq)
Stagnation Abroad Additional (Expansion - Stagnation)
Stagnation: 2015 to 2030: 668 mm tCO2e
Expansion: 2015 to 2030: 1.239 mm tCO2e
571 mm tCO2e additional
4. CONCLUSIONS AND
REFLECTIONS
GREAT POTENTIAL
• Financing program for ethanol storage and sugarcane renew (Pro-Renova)
• Tax incentive for improving car efficiency (Inovar-Auto)
• Return of the gasoline tax
• Allowed the increase of ethanol share in the gasoline blend
THE GOVERNMENT HAS MADE SOME POLICIES TO SUPPORT THE SECTOR
SUGARCANE SECTOR PLAYS A MAJOR ROLE IN THE BRAZILIAN INDC (COP-21)
• Expanding sustainable biofuel
• Increasing renewable source in power matrix
• Land use (compliance of Forest Code, avoid deforestation and restoring/reforesting 12 million ha of forest )
GREAT POTENTIAL
• Recent good policies but not enough
• Hard to accomplish the commitments (iNDC)
• The government should provide stability and a long term policies
REFERENCES • ANP (2016). National Agency of Petroleum, Natural Gas and Biofuels. Available at: http://www.anp.gov.br/?pg=59190&m=&t1=&t2=&t3=&t4=&ar=&ps=&cachebust=1332185105909
• Babcock; Moreira; Peng (2013). Biofuel taxes, subsidies, and mandates: impacts on us and Brazilian markets. Available at: http://www.card.iastate.edu/publications/dbs/pdffiles/13sr108.pdf
• BACEN (2016). Central Bank of Brazil. Available at: http://www4.bcb.gov.br/pec/taxas/port/ptaxnpesq.asp?id=txcotacao
• CONAB (2016). National Company of Food Supply. Available at: http://www.conab.gov.br/conteudos.php?a=1252&t=2&Pagina_objcmsconteudos=2#A_objcmsconteudos
• CONSECANA (2006). Council of Sugarcane, Sugar and Ethanol Producers of the State of São Paulo, Manual de Instruções,. 5ª edição. Piracicaba. Available at:
http://www.orplana.com.br/manual_2006.pdf
• EIA (2016). U.S. Energy Information Administration. Available at: http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=eer_epmru_pf4_y35ny_dpg&f=m
• Environmental Protocol (2007). Available at: http://www.ambiente.sp.gov.br/etanolverde/files/2011/10/protocoloAgroindustriais.pdf
• Macedo, I.C.; Seabra, J.E.A. (2008). Mitigation of GHG emissions using sugarcane bioethanol. In. Sugarcane Ethanol, Peter Zuurbier and Jos van de Vooren (org). Available at:
http://sugarcane.org/resource-library/studies/Wageningen%20-%20Chapter%204.pdf
• MAPA (2009). Ministério da agricultura, pecuária e abastecimento. Zoneamento Agroecológico da Cana-de Açúcar - Expandir a produção, preservar a vida, garantir o futuro. Rio de Janeiro, RJ.
Available at: http://www.cnps.embrapa.br/zoneamento_cana_de_acucar/ZonCana.pdf
• MCTI (2014). Brazilian Ministry of Science, Technology and Innovation. Estimativas anuais de emissões de gases de efeito estufa no Brasil. 2 ed. Brasília. Available at:
http://www.mct.gov.br/upd_blob/0235/235580.pdf
• MCTI (2015). Brazilian Ministry of Science, Technology and Innovation. CO2 Emission Factors according to the methodological tool: "Tool to calculate the emission factor for an electricity system,
version 04.0 and earlier" approved by the CDM Executive Board. Available at: http://www.mct.gov.br/index.php/content/view/307492.html
• MDIC (2016). Ministry Of Development, Industry And Trade. Available at: http://aliceweb.mdic.gov.br/
• UNFCCC (2015). United Nations Framework Convention on Climate Change. National Inventory Submissions 2014. Available at:
http://unfccc.int/national_reports/annex_i_ghg_inventories/national_inventories_submissions/items/8108.php
• UNICA & Agroicone (2015). Cana de açúcar como ativo estratégico da agenda de mitigação de GEE brasileira. Ethanol Summit 2015. Available at:
http://agroicone.com.br/uploads/2015/07/ethanol-summit-agroicone-rodrigo-c-a-lima.pdf
• UNICA & FERAESP (2015). Project RenovAction. Qualification transforming lives - Report 2010-2015. Available at: http://www.unica.com.br/download.php?idSecao=17&id=22129468
• UNICA (2015). Brazilian Sugarcane Industry Association. Coletiva de imprensa BALANÇO DA SAFRA 2014/2015. Available at: http://unica.com.br/documentos/apresentacoes/
• UNICA (2016). Brazilian Sugarcane Industry Association. Coletiva de imprensa ESTIMATIVA SAFRA 2016/2017. Available at: http://unica.com.br/documentos/apresentacoes/
• WRI (2015). CAIT - Historical Emissions Data (Countries, U.S. States, UNFCCC). Available at: http://www.wri.org/resources/data-sets/cait-historical-emissions-data-countries-us-states-unfccc
CATTLE HERD AND LAND USE IN
BRAZIL GUSTAVO PALAURO, RESEARCHER
1. Cattle herd in Brazil
2. Land Use
3. Brazilian goal in Agriculture sector
Summary
1. Cattle herd in Brazil
Cattle herd in the Brazilian context
147
205 212
0
50
100
150
200
250
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
Mill
ion
he
ad
s
Brazil has the largest commercial cattle herd:
212 million animals in 2014. Increased about 4% over the past decade (2004-14);
Source: IBGE - PPM
31%
22% 10%
9%
9%
5%
3% 10% India
Brazil
China
United States
European Union
Argentina
Australia
Other
Source: USDA (2015)
Cattle historical evolution in Brazil World cattle herd
Nearly 80% of Brazilian cattle is for beef production and it is
concentrated in the central region of the country Beef Cattle in Brazil Milked cows in Brazil
Source: IBGE – Censo Agropecuário Source: IBGE – Pesquisa Pecuária Municipal
Mato Grosso has the largest cattle herd in Brazil and is the biggest soybean
producer. Minas Gerais has the largest cattle herd for milk production
13%
11%
10%
10%
9% 7%
39%
Major states in cattle heads
Mato Grosso Minas GeraisGoiás Mato Grosso do SulPará Rio Grande do Sul
Mato
Grosso
Goiás Mato
Grosso do
Sul
Pará
Minas
Gerais
Rio
Grande do
Sul
TO
MA
PI
BA
SP
PR
SC
RJ
ES
AM
AP RR
AC
RO
CE RN
PB
PE
AL SE
Source: IBGE – Pesquisa Pecuária Municipal
Beef sector activity represented 15%
(US$ 54 billion) of the 2015 Brazilian
agribusiness GDP, while exports
reached US$ 5.9 billion in 2015;
Key end buyers of Brazilian beef in
2015: Hong Kong, Egypt, Russia, Iran
and China.
Importance in the Brazilian economy
One of the largest beef exporter;
Source: CEPEA (2016); ABIEC (2016)
Key points about beef sector
About 40% of the beef cattle is on the
complete production cycle;
Brazilian characteristic for raising cattle
in the extensive system (low yield);
In 2014, national beef production was
9.8 million tons;
About 80% of the Brazilian beef
production has the domestic market as
destination;
2. Land use
Agricultural areas:
70 million hectares of crops;
About 178 million hectares of
pastures.
Land use in Brazil:
native vegetation covers most part of the territory
Native vegetation:
Covers 66% of the national territory
or approximately 566 million
hectares.
Source: GTPS White Paper (2015); Britaldo Soares-Filho et al. (2014)
21
5
20
82
0
5
10
15
20
25
30
35
0
10
20
30
40
50
60
70
80
90
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
An
nu
al d
efo
resta
tio
n (
tho
usan
d k
m2)
Mil
lio
n h
ead
s
Annual deforestation Cattle herd
Legal Amazon Cattle herd and deforestation in Legal Amazon
Despite the increase of deforestation until 2004, in recent years the index has been decreasing,
while cattle herd has been increasing.
A process of improving per-hectare yields rather than expanding pasture.
Cattle herd x Deforestation in the Legal Amazon area
Source: IBGE – PPM (2015); INPE-PRODES (2015)
3. Brazilian goal in Agriculture sector
Cattle
intensification
• Restoration of degraded areas;
• Decrease in deforestation;
• Compliance with the Forest Code.
• Investment in Good Agricultural Practices (GAP);
• Improve yield in cattle production;
• Improving and maintaining pastures in good
condition;
• Releasing pasture areas to crop production;
Cattle intensification as a way for agricultural growth and
environmental compliance in Brazil
Brazil´s expectation to
release 17 million hectares
of pasture areas until 2030
to other land uses
(GTPS White Paper, 2015)
Brazilian agriculture´s goal
Brazilian
government is
focusing its efforts
to meet the targets
to tackle global
warming (COP 21)
Big opportunities for the beef sector
helping the country to achieve its goals,
proposed in the Paris Agreement:
• Recovery of degraded pasture;
• Helping to comply with the Forest Code;
• Civil society and NGOs have pressured the
beef sector against irregular practices, such
as buying cattle from deforested areas,
mainly in Legal Amazon area;
• Largest retailers conducing programs to
guarantee sustainable sourcing.