Biofuel Carbon Capture & Storage, the Brazilian experience

Plinio NastariDATAGRO

FAPESP-NERC WORKSHOP ON SUSTAINABLE GAS FUTURE

February, 25th 2015FAPESP - Rua Pio XI, 1500 – Alto da LapaSão Paulo Brazil

Energy Consumption – Transport Sector2013 in Brazil

3

Source million tep %

Diesel 38,433 46.2%

Biodiesel 2,005 2.4%

Gasoline (pure) 24,393 29.3%

Ethanol 11,889 14.3%

Anhydrous 5,172 6.2%

Hydrous 6,717 8.1%

Kerosene 3,608 4.3%

Fuel Oil 957 1.2%

Electricity 162 0.2%

CNG 1,647 2.0%

Others 59 0.1%

Total 83,153 100.0%

Energy Consumption - Transport Sector

Source: BEN/MME

4

Source: DATAGRO

ETHANOL SHARE IN OTTO CYCLE FUEL DEMAND (in gasoline equivalent)

44.3%

41.8%

38.9%

37.0%

39.2%

38.1%

37.7% 37.3%

40.2%39.7%

39.4%

35.2%

40.7%

44.7%45.4%

44.6%

37.1%

31.8%

33.7%

36.2%

25%

30%

35%

40%

45%

50%

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

Photosynthesis

5

Generates plants used as sources of biomass:

Cane African palm Eucaliptus

Soybeans Cassava Pinus

Castor Palm Other species

Conversion

Ethanol

Biodiesel

Methanol

Charcoal

Hydrogen

Biogas/biomethane

Ethanol – Avoided Emissions

6

SourceIndustry

Average

Best

practices

Anhydrous ethanol 2.564 2.716

Hydrous ethanol 1.722 1.867

Base case

Gasoline (pure) 2.820

Source: Macedo et al. (2004).

Avoided emissions (kg CO2 eq/liter)

Biodiesel – Avoided Emissions

7

SourceIndustry

Average

Biodiesel (B100)

Palm 2.760

Soy 2.530

Castor 1.760

Fossil Diesel 2.930

Source: EPE (2005).

Avoided emissions (kg CO2 eq/liter)

-

15,0

30,0

45,0

60,0

75,0

90,0

Mill

ion

ton

s o

f T

RS

eq

uiv

ale

nt

Sugar Anhydrous Hydrous

Brazilian Supply of Sugar+Ethanol (in TRS equivalent): with intense growth 2003-2010 period

Source: DATAGRONote: TRS is Total Reducing Sugars, a common denominator for sugar and ethanol.

31.3%

25.1%

43.6%

14/15eCS+N/NE

Gasoline30.77%

Flex Fuel67.00%

Ethanol2.23%

9

SIZE OF THE DOMESTIC FLEET (OTTO CYCLE)

Flex-Fuel Vehicle Fleet Vehicle Fleet by Type of Fuel (2014)

Flex cars were responsible for 67.0% of total light vehicle fleet. This proportionis rising every year:

2013: 63.12%

2012: 58.02%

2011: 52.07%

Source: DATAGRO Source: DATAGRO

0.05 0.381.19

2.61

4.59

6.88

9.47

12.23

14.92

17.96

20.85

23.12

-

5

10

15

20

25

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

MIllion units

32,9

38,0

35,9

38,2 37,6

35,5

30,0

32,0

34,0

36,0

38,0

40,0

09/10 10/11 11/12 12/13 13/14 14/15e

mill

ion

to

ns

Brazil: production of sugar has fallen since 2012

Source: Elaborated by DATAGRO, from data obtained with Sindicates of Producers.

25,7

27,4

22,6 23,2

27,5

28,2

20,0

22,0

24,0

26,0

28,0

30,0

09/10 10/11 11/12 12/13 13/14 14/15e

bill

ion

lit

ers

Brazil: a new record production of ethanol achieved in 2014/15

Source: Elaborated by DATAGRO, from data obtained with Sindicates of Producers.

Ethanol Production in Brazil(000 m3)

12

5,621.3 6,465.1 6,994.4

8,914.9 8,316.1 8,112.4 8,387.5 8,125.5 9,336.0

7,060.0 8,323.0 8,942.1

9,949.0

12,172.0 12,260.0

4,971.6

5,071.2 5,596.6

5,896.7 7,103.8 7,820.6

9,460.1

14,272.0

18,188.0

18,645.0

19,048.0

13,758.1 13,304.0

15,280.0 15,931.0

-

5,000.0

10,000.0

15,000.0

20,000.0

25,000.0

30,000.0

00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15e

Anhydrous ethanol Hydrous ethanol

Source: DATAGRO.

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

80,0%

90,0%

100,0%

Sugar Anhydrous Hydrous

A large shift in production mix since 2012/13

Fonte: DATAGRO

27.9% 31.3%

21.8% 25.1%

12/13 14/15

50.3% 43.6%

Consumption as Fuel(Gasoline, Anhydrous & Hydrous Ethanol, in billion liters/mo)

14

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Bil

lio

n li

ters

/mo

nth

Gasoline A (pure) Anhydrous Hydrous Ethanol Total

Source: DATAGRO.

Biodiesel Production in Brazil(million liters)

15

1,608

2,386

2,673 2,717 2,917

3,414

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2009 2010 2011 2012 2013 2014

Source: ANP/MME.

Avoided Emissions from Biofuels(used as fuel only) in Brazil- 2014

16

SourceIndustry

Average

Best

practices

Industry

AverageBest practices

Anhydrous ethanol 2.564 2.716 28,437.48 30,123.32

Hydrous ethanol 1.722 1.867 22,375.87 24,260.01

Biodiesel (soy) 2.530 8,637.65

59,451.00

Source: DATAGRO.

Avoided Emissions

(kg CO2 eq/liter) (2014 total in 000 tons CO2 eq)

Biofuels total

Total Volume of Ethanol Used as Fuel (1975-2014) in Gasoline Equivalent (in million liters)

17

0

5,000

10,000

15,000

20,000

25,000

Anhydrous Hydrous Total Ethanol in Gasoline equivalent383.7

283.8

167.2

Total (bi liters)

Source: Datagro

Avoided Emissions from Biofuelsused as fuel (only) since 1975

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Source (kg CO2 eq/liter)Since 1975, in

000 tons CO2 eq.

Anhydrous ethanol 2.564 428,670.03

Hydrous ethanol 1.722 372,809.56

Biodiesel (soy) 2.530 53,762.50

855,242.09

Source: DATAGRO.

Avoided Emissions - Industry Average

Biofuels total

Ethanol substituted between 1975-2014 2.41 billion barrels of gasoline

Proved reserves of oil & condensates(including Pre-Salt) in 2014:

13.13 billion barrels (SEC),or 16.61 billion barrels (SPE/WPC).

Between 1975 & 2014, volume de gasoline substituted by ethanol:

2.41 billion barrels

At current pace, every year another 127 million barrelsare substituted without the need of new investmentsbecause it is renewable!

Hard currency savings• Between 1975 & 2014, substituted gasoline valued at its world

price enabled savings of

US$ 185.4 billion, without considering the cost of foregone debt, or

US$ 381.3 billion, considering the cost of foregone debt

(estimated at Prime Rate + 200 base pts).

Brazil’s foreign reserves(January/2015): US$ 372.93 billion.

Source: DATAGRO

Additional Potential

• Brazil has great potential for large scale biogas & biomethane use using organic residues from agrindustrial activity and urban waste.

• Large potential for substitution of fossil diesel (biomethane) and power (biogas) in distributed generation.

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TODOS OS DIREITOS RESERVADOS22

Biomethane, Renewable Substitute to Diesel

Substituição de Diesel a partir do Resíduo de Cana

Produção descentralizada

• 43% da área total do território brasileiro;

• 81% da população brasileira; e

• As principais capitais brasileiras estão a menos de 200km de uma usina sucroenergética.

Eficiência logística

Redução das importações

• Possibilidade de aumentar em U$ 6,1 bilhões o saldo positivo da Balança Comercial, ao substituir o diesel importado por biometano renovável.

Desenvolvimento das regiões rurais

• Possibilidade de gerar aproximadamente 25 empregos diretos por usina em áreas rurais.

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Independence in diesel imports

• A produção de biometano é capaz de zerar toda a importação de dieselbrasileira e reduzir a dependência energética de um produto fóssil

• A produção de adubo orgânico equivale a 9 vezes o consumo brasileiro defertilizante químico e a 4,5 vezes o total de volume importado

O biometano pode garantir a independência da importação de diesel do Brasil.

Usinas e Consumo de diesel no Brasil | mil L Potencial GEO Energética

Capacidade de geração de:

Diesel equiv.

35 bi de LOrganofértil

94 mm ton100%

Torta

100% Bagaço

100% Palha

100% Vinhaça

22,2

34,439,1 41,7157,8%

101,8%89,6% 83,9%

0,0 %

20, 0%

40, 0%

60, 0%

80, 0%

100 ,0%

120 ,0%

140 ,0%

160 ,0%

180 ,0%

200 ,0%

0,0

5,0

10, 0

15, 0

20, 0

25, 0

30, 0

35, 0

40, 0

45, 0

50 Km 100 km 150 km 200 km

Consumo de diesel (bi de L) e Potencial de Substituição (%)

Raio das usinas

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Organic Residues

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Complementariedade com o modelo de cana

• As terras destinadas às plantações de cana e à pecuária não ficam localizadas na mesma região garantindo assim uma melhor distribuição pelo território nacional.

Alta produtividade na biodigestão

• Comparado à biodigestão de cana, os resíduos animais apresentaram um produtividade 35% maior.

Solução para o problema de resíduos

• Diferentemente do mercado sucroenergético, os resíduos animais são considerados um problema. A biodigestão é uma solução operacional e economicamente interessante para o mercado.

Substituição de Diesel a partir de Resíduos Animais

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FUTURE EVENTS CALENDAR

13 May 2015 (New York Sugar Dinner)

9th ISO DATAGRO New York Sugar & Ethanol Conference

Waldorf=Astoria Hotel, New York

10 July 2015

4th Sugar & Ethanol Summit – Brazil Day

IoD – Institute of Directors, London

25 August 2015

4th DATAGRO Ceise Br Fenasucro Conference

Sertaozinho, Brazil

21-22 September 2015 (Sao Paulo Sugar Dinner)

15th DATAGRO International Conference on Sugar & Ethanol

Grand Hyatt São Paulo, Brazil

25

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