Biodiesel Partnership Proposal in Brazil PDF
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A HUB OF SKILLS IN THE BIODIESELPRODUCTION CHAIN IN BRAZIL
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To set up a pool of highly professionalorganizations in the private and public sector to
organize the bio-diesel production chain , makingavailable to the market turn-key projects
(from soil to oil)
promoting sustained development and poverty
alleviation, creating opportunities and a new model forthe intensive and extensive use of the energy biomasspotential of Brazil.
goal
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Take joint actions and improve efforts to work together
at all levels to improve access to reliable and affordableenergy services for sustainable development sufficient to
facilitate the achievement of the MDGs, including the
Goal of halving the proportion of people in poverty by
2015, and as a means to generate other important servicesthat mitigate poverty, bearing in mind that access to
energy facilitates the eradication of poverty
( Summit on Sustainable Development in theJohannesburg Plan of Implementation )
vision
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In modern economies, large scale poverty imposes an enormouseconomic loss, wasting the talents and energies of hundreds ofmillions of people , diverted from socially productive activities thatcould create wealth for society to the struggle for mere survival.
our challange
The partnershipsshould be at theglobal level, at thecountry level with
nationalstakeholders andexternal partnersacting together,the private sector
and civil-societyinstitutionscollaborating tocreate conditionsthat emancipatepoor groups.
But the fundamental partnership, andultimately the only one that counts, is with thepoor themselves. They have the talents, theskills and the knowledge of their ownenvironment.
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OIL EXPELL
TRANSESTERIFICATION
ANIDRUS ALCOHOLDESTILLATION
BIOLOGICALTREATMENT
Cold mechanical expelling
Phosphorous low content
by-products with high nutricional content
Ethanol technology
Low operational cost
Meeting International requirements
Plenty local feed-stock
High calorific power
Low production cost
re-usage of water and contaminatedglycerin
Cogeneration of electric and thermal
energyProduction of biological fertilizer
Innovation of BioVale Hub for industries
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The main objective of the Hub is to bring capabilities of the variousstakeholders involved in the bio-diesel production chain, both in Brazil andabroad providing resources and diffusing knowledge to the linked firms.
The benefits provided through such linkages are of great significance becauseof the complimentary capabilities among the stakeholders.
Linkages with foreign organizations can be a great driver of dynamism andcompetitiveness to develop effectively and rapidly the Brazilian bio-diesel
program. The foreign firms benefit from linkages are reduced costs, localmarket and product intelligence and enhanced assets (UNCTAD 2001).
MINASINVESTs interventions, as a leading IPA (Investment promotion agency)are important to the extent that investors believe that an enterprising IPA canassist them in identifying and introducing reliable local firms andorganizations with whom the investors can partner.
The linkage envisages upgrading domestic enterprises; facilitating thetransfer of technology, knowledge and skills; improving business andmanagement practices; and facilitating access to finance and markets.
Linking the various stakeholders
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the price of
crude oil tripledbetween early2002 and mid-
2005 whilenatural gasreaches a levelsix times greaterthan ten years
earlier.
Market scenario and prospects
Source: GTZ/WorldWatch Institute
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energy companies have not invested in buildingenough refinery capacity to meet the growing level ofworld demand. World oil production has gone up by 40%in the past 20 years while refinery capacity has only
gone up 15%.
the oil reserves discovered between 1950 and 1980 are being run down.
companies havenot been able tofind enough new
oil and gas fieldsto replace theexhausting ones.
Oil is being
pumped out ofthe ground threetimes faster thanit is beingreplaced by new
oil finds.
The growing gap
Source: GTZ/WorldWatch Institute
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"There are not enough large-scale projects in the developmentpipeline right now to offset declining production in mature oil fields
and to meet global demand growth beyond 2007". (Chris Skrebowski,
the editor of the Petroleum Review )
The total amount ofenergy that the worldgets from oil and gas
will begin to declineafter 2010.
Will oil prices rise further?
Source: GTZ/WorldWatch Institute
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The global demand for oil is increasing by just over 2%every year at present.
This increase in demand added to the gap being createdby the declining supply, implies new energy sources eachyear equivalent to 4-5 per cent of the world's current oilproduction:
around 1,800 million barrels of oil a year.
In 2015, when world gas output ceases to increase to
meet the its growing demand , the new energy sourceswould have to increase the annual rate at which they grew
by another 900 million barrels.
What alternative sources to fill the gap?
Source: GTZ/WorldWatch Institute
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The only truly sustainable energy sources are those basedon the flow of energy from the sun: solar, hydro, wind,wave, biomass.
These flows are very large in comparison with humankind'suse of energy.
Renewable sources can therefore meet all the world'senergy needs, both now and in the future.
The amount of energy supplied by renewable sourcescould be 120 times its present level .
What alternative sources to fill the gap?
The problem is to develop these sources
quickly enough to fill the gap as it opens up.Source: GTZ/WorldWatch Institute
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The world is on the verge ofunprecedented growth in theproduction and use of biofuels , by
virtue of:
Rising oil prices, national securityconcerns, the desire to increase farm
incomes, and a host of new andimproved technologies .
The two most prevalent biofuels areethanol and biodiesel.
World production of ethanol morethan doubled between 2000 and 2005,while production of biodiesel
quadrupled.
Biofuels: a Booming Industry
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Biofuel productionhas becomesubstantially more
efficient over the last25 years as Brazil andthe United Stateshave scaled up theirindustries.
Such incrementalgains are likely tocontinue for years tocome.
New Technologies, New Gains
However, the greatest potential for biofuels lies in thedevelopment of new technologies that will significantlyexpand the range of biomass feedstock, increase
conversion efficiencies, and lower production costs.
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One of the main benefits of biofuels is their potential to increasefarm incomes and strengthen rural economies. The World Bankreports that biofuel industries require about 100 times more workersper unit of energy produced than the fossil fuel industry.
In 2004, the Brazilian sugarcane sector was responsible for 1 millionjobs (direct)/4 million (indirect) corresponding to the production of350 million tonnes of cane (UNICA, 2003 and Goldemberg, 2003).
The dispersed nature of agriculture makes it unlikely that biofuelproduction will become as centralized as the oil industry.
In the focused region of the project (Jequitinhonha & Mucuri Valleys)
the access to modern forms of energy is limited or absent. Anorchastrated pool of competences involved in the biodieselproduction chain can help provide income and clean, accessibleenergy that is vital for rural development and poverty alleviation.
Biofuels: A New Future for Rural Communities
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In general, biofuels have a solidly positive GHG balance. Energy cropshave the potential to reduce GHG emissions by more than 100 percent(relative to petroleum fuels) because such crops can also sequester carbon
in the soil as they grow.
Large deforested areas could be recovered by crops producingvegetable oils in order to produce biofuels.
Even with subsidies, the economic savings with biofuels from avoided oilimports are considerable: between 1975 and 1987, ethanol saved Brazil$10.4 billion in foreign exchange while costing the government $9 billionin subsidies. This investment paid off even more in subsequent years:studies show that from 19762004, Brazils ethanol production substitutedfor oil imports worth $60.7 billionor as much as $121.3 billion includingthe avoided interest that would have been paid on foreign.
Further benefits
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Renewable energy will have to supply a greater share of the world'senergy requirements.
It is estimated that the market for clean energy technologies could
be worth $1.9 trillion by 2020. The financial sector has a key role toplay in developing and promoting this market.
In the next 25 years, the world will consume all that has been
produced in fossil oils so far.
The worlds dramatic increment for fuels should be supplied by bio-fuels.
In the future, In the short run, ETHANOL and BIO-DIESEL are themain bio-fuels.
Renewable energy is both a solution and a businessopportunity; BUSINESS AS AN AGENT OF WORLD BENEFIT
RET OPPORTUNITIES
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Biodiesel - a Mutual Profitable Partnership
As oil prices and environmental concerns have risen in the past fewyears, investment in new biofuel facilities has mushroomed in Brazil.
The Brazilian National Program for use and production wasincorporated in the Brazilian energy matrix by Law nr 11.097/2005 .
Large trans-national corporations, as ADM, have already started
investing in biodiesel projects in Brazil
The crop area required to produce the blend of initial mandatory2% of biodiesel will be 1.5 million hectares, equivalent to only 1% of
the total acreage under crops or available for agriculture throughoutBrazil (150 million hectares).
BIOVALE ENERGY: YOUR PARTNER IN BRAZIL FROM INCEPTION TO CONCEPTION
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Brazilian ethanols use and production
PRODUCTION CAPACITY: 18 billion liters/year
PRODUCTION: 15 billion liters/year (seed/2004/2005)
EXPORTATION: 2.4 billion liters in 2004
SUGAR CANE PLANTED AREA: 5.6 million hectares
POTENTIAL FOR AGRICULTURAL EXPANSION IN BRAZIL:
90 million hectares of arable lands Without any forest removalINTEGRATED PRODUCTION OF SUGAR AND ETHANOL:
Provide production flexibility
UTILIZATION OF ETHANOL IN VEHICLES IN BRAZIL:Automobiles, light commercials, motor-cycles and aircrafts
Flexible Fuel light vehicles: reached 37% of internal market sales in2005
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Brazil has ideal conditions for becoming a major world producer ofbiodiesel. It has a vast amount of arable land, part of which is notsuitable for food crops but has the right soil and climate forgrowing a range of oilseeds.
Biodiesel will make Brazil a global benchmark in the use ofrenewable fuels.It first won this position in the 1970s with theintroduction of ethanol made from sugarcane to power automotivevehicles.
The National Alcohol Program, Prolcool, was the largest fossilfuel substitution program in the world automotive market. It isstill considered a global example of excellence, and Brazil remainsthe largest producer and consumer of fuel alcohol in the world.
The experience Brazil has accumulated through the Prolcoolserves as a strong foundation for implementing the biodieselprogram and maximizing the nations competitiveness in arelatively short period.
Brazil: a global benchmark in RET
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Source: MME
Law 11 097/2005: it sets forth a mandatory use of biodiesel
mixture to diesel, which reflects in the following prospects
20%
20202020
12,4
billions
liters/year
12,4
billions
liters/year
Brazilian domestic market projection
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Brazils export potential
With the launch of commercial production, Brazilbecomes a potential exporter of biodiesel.
The EU aims to ensure that 2% of all the fuel consumedin the region is renewable by 2005, but it has limitedacreage available for growing rapeseed, the mainfeedstock produced in Europe, and industrial capacity isinsufficient to meet the stipulated demand.
Despite these constraints, the proportion of renewablefuels is set to reach 5.75% by 2010 according to EUDirective 30, ratified by the European Parliament in May2003.
Given the limitations for production growth in Europe,Brazilian biodiesel enjoys an unprecedented opportunityto build market share in the continent Europe.
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Features of envisaged agricultural area:
Total semi-arid area: 1.219.021,50Km2, equivalent to about 1/5 of Brazil comprising ten States Maranho,
Piau, Cear, Rio Grande do Norte,Paraba, Pernambuco, Alagoas, Sergipee Bahia and Minas Gerais. Population:1/3 of Brazil (55 million)
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Bearing high agricultural
production costs
Bearing internal/externalobligations of emission reduction
(Kyoto Protocol and othercompromises)
Bearing scarcity of cultivation
lands Willing strategic alternatives
for diesel supply
Possible partners
Countries :
Having to meet social andenvironment responsibilities
Bearing environment liabilities
Willing to attract SRIand valuing their stock prices
Bearing intensive need of fuel
sources
Investors in prospective highreturn SRI
Companies :
BIOFUELS: FUTURES MOST PROSPECTIVE INVESTMENT
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Prospects of biodiesel cooperation/partnership
Possible areas of interest:
Utilization of Partners technology for biodiesel plants inbuilding, logistics, utilization of glycerin and other by-
products, specification, engine tests, etc.
Sale of carbon credits (MDL) obtained through the
utilization of biodiesel in Brazil.
Export of vegetal oil and biodiesel to Partners country.
Exploitation of the potential domestic market
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MINAS GERAIS STATE:The ideal place for investments in Brazil
Strategically located in the Southeast region ofBrazil: concentrating 78% of Brazilian consumingmarket .
18 million people.
Territory greater than many European countries. Third largest South American economy. Excellent infra-structure Abundant energy and modern communication. Modern law on on Public-private partnerships,
respecting obligations with investors and partners. Expedient and practical action from Public
Administration Strong competitiveness for new enterprises Highly qualified labor
MINAS GERAIS State stands at a vibrant moment in its development,
introducing entrepreneurial changes, innovation, paradigm shifts, and
openness for new alternatives and investments.
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The State program for bio-fuels
The program, set forth in Law no. 15.976/2006 has the following goals:
Research and technology development;
Technology transfer to the private sector;Job posts creating and improvement of income distribution;Reduction of fossil diesel imports;Reduction of gas pollution emission;Development of Feed-stock production
Targets up to 2007/2008 :
250.000 hectares crop plantation for production of B2 (blend 2% ),
reaching 625.000 he for production of B5 in 2013;
Direct income generation to 100.000 families, corresponding to about500.000 job posts up to 2007.
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The yields of currently used biofuel feedstock vary widely. Jatrophaseeds have proven advantageous in several spheres.
Perennial crops of Jatropha Curcas will be used to protect lands that arevulnerable to erosion and to restore lands degraded by grazing.
Jatropha curcas: the feedstock
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Jatropha is identified under the physical-chemical platform ofbiomass energy conversion route. It is a drought-resistantperennial, living up to 50 years and growing on marginal soils(HENNING, 1996).
The remote rural communities of the Brazilian semi-arid in droughtregions will be able to address their energy needs using theJatropha resource.
TheJatropha Curcas was especially selected because the plant isnot an invasive species (GBITZ ET AL., 1999) and permits thegrowth of other plants in its vicinity, so it does not negativelyaffect the ecosystem.
Jatropha curcas: the feedstock
The results of the researches developed by EPAMIG, the StateAgriculture R&D entity, in the 80and the preliminary current
( 2004/2006) results attest the potentiality of the jatropha curcas
cultivation in the semi-arid region
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Development model
The development model is based on the workingrelationship between the community benefiting
from the BIO-VALE project, a local technical NGO,an enterprising development agency , a foreigndevelopment agency, Government stakeholdersand a corporation.
Each entity has its respective and important rolesthat complement, harmonize and support oneanother leading to the ultimate success and
sustainability of the project.
The private sector can play an important roletowards furthering development, for developmentcannot occur without conditions that are amenable tothe conduct of business. (United Nations)
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MINASINVEST, a not-for profit investment agency, will be primarily incharge of the social-economic factors coordinating the efforts among
the various stakeholders, which includes:enhancing logistics, building market information systems.
Identifying and coordinating the best partners;
Developing policies and strategies to improve competitiveness;
Strengthening the producers negotiating position ;
Providing well-researched analyses;
Government and institutional relationships involved in the project.
Development model: Investment agency
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The local community possesses direct responsibility towards the day-today running of the biofuel project . Particular emphasis is given onthe socio-economic empowerment of women, thus women groups willbe specially utilized to manage the project.
The role of the community should therefore be:
Provision of land for Jatropha plantation and site for theestablishment of the oil extraction unit. Responsibility for the day-to-day management of plantation,including: cultivation and harvesting. Commitment of human resources for project development such as
unskilled labor (to handle farmlands), access to skilled labor.
In order to help the community in their quest towards sustainabledevelopment, it is very important that they should be the mainrecipient of all benefits accrued from the project.
Development model:The Community
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General coordination among the various stakeholders
Resources (financial and management)
Industrialization: oil extraction and trans-esterification
Logistics (sales, distribution, export process, shipping)
GENERAL CORPORATE ACTIVITIES
BIOVALE ENERGY & PARTNERS
turn-key/Global solution in BioDiesel projects
Research & DevelopmentInstitutional and Government support
Project development, Project Financing an Funding
International product commercialization
Logistics (sales, distribution, export process, shipping)
GENERAL CONSULTING ACTIVITIES
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Implementation goals
Internal
capabilities
External
capabilities
Professional
POOL
Roles of
stakeholders
strategies
Action planResources
management
monitoring
professional management
BioVale Energy: your partner in Brazil.