CitrusBR Carbon

Footprint Study

Historical

• This work is a response to the AIJN, that requested CitrusBR to inform the carbon footprint for orange juice (FCOJ and NFC).

• The work is being done for the Brazilian Sao Paulo production delivered in Europe

Historical

The companies involved on this work are Cutrale, Citrosuco, Citrovita and Louis Dreyfus Commodities

Historical

The companies worked with one consulting company in order to have an homogenized and more reliable result in terms of the principles/protocols considered The consulting firm DeltaCO2, specialized in the quantification of greenhouse gases (GHG), provided the technical support, following the Publicly Available Standard 2050 (PAS 2050), the GHG Protocol and ISO norms 14040 and 14044 (Life Cycle Assessment)

Were calculated the emissions of Carbon Dioxide (CO2), methane (CH4) and Nitrous Oxide (N2O), expressed as equivalents of CO2 (CO2eq), according to their potential for the global warming.

Sustainability

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This carbon footprint assessment encompasses the following product lifecycle stages:

Raw Material Industrial Processes External Logistics

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Raw Material: Includes seedling production, planting, cultivation, fertilization, harvesting and transport of fruit to the industrial plants.

The greenhouse gas sources included are: soil emissions from the application of fertilizers and limestone; emissions from burning fossil and renewable fuels (in agricultural machinery, transport of farm workers and fruit); purchased electricity and upstream emissions in the production and transport of fuels and agricultural inputs

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Raw Material: Issues relating to land use were not considered in this study, since production

increases were achieved through productivity gains rather than orchards expansion.

Source: Elaborated by Markestrat - University of São Paulo with data from IBGE (Brazilian Institute of Geography and Statistics), 2010

620.770

719.735

736.770 766.640

776.690

609.475

581.487

586.937

600.060

587.935

574.510

571.532

584.096

592.568

566.652

432,7

406,3 429,3

370,3

416,0

486,7

570,3

616,4

545,1

613,6

612,9

616,1

625,4

601,3

590,1

300,0

350,0

400,0

450,0

500,0

550,0

600,0

650,0

550000

600000

650000

700000

750000

800000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Bo

xes/

hecta

re

Hecta

res

Area x Productivity - Oranges in the state of São Paulo (Brazil)

Area Productivity

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Industrial Processes: Includes receiving the fruit, processing, pasteurization or pasteurization +

concentration, storage at the plant, road transport to and storage at the Brazilian port (Santos).

The combustion of fuels from stationary and mobile sources, purchased electricity and upstream emissions from the production and transport of industrial inputs and fuel were accounted for in this phase

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External Logistics:

Includes the transport of juice to European ports in Belgium and the Netherlands,

and the storage of juice at the port of destination.

The GHG emissions included in this stage came from the production (pasteurization, etc), transport and combustion of fuel in stationary and mobile sources, and purchased electricity

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COMMENTS:

Whenever possible, the emissions allocation was avoided by analyzing separately

the various products and by-products system's production. When it was not possible to analyze separately the inputs or raw material by product, we used the allocation criteria based on mass. The mass yield of products and by-products from orange, calculated for each company in the inventory year, was used as reference (product life cycle).

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Hypothesis that might explain variation in the numbers YoY:

A variation is expected considering that it is an agricultural product and its production depends on a series of factors such as:

Size of production (higher or lower crops) Climate Conditions Depending on the time of the season, lower or excessive precipitation may cause fruits to

drop before ideal maturation, hamper blooming, among other consequences that affect size of crop, productivity and fruit yield

Higher temperatures increase incidence of certain diseases, with similar outcomes – especially considering the problem of HLB – Greening (next slide)

Economy Conditions When OJ prices are lower, fruit prices are lower and growers receive less for their

production, investing less in their groves. The following year tends to be better in terms of prices – and consequent investment in agricultural inputs. Experience shows that in terms of agricultural products, it is even possible to infer from the carbon footprint variations if there was a crisis in that sector (the year following the crisis tends to present higher CPF numbers). This correlation is true for citriculture, considering 2009 and 2010

Incidence of diseases, such as greening, that may require elimination of trees and re-planting

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FCOJ and NFC Energy matrix :

Most industrial processes are powered by biomass to generate heat, steam and electricity and a few industrial processes are powered by natural gas to replace GMP oil.

Most companies light vehicle runs on 100% ethanol and the Brazilian diesel contains 5% of biodiesel for the road transport.

Furthermore, it is important to highlight that 46% of the energy matrix in Brazil comes from renewable energy sources. In this context, it stands out that 85% of electric power is produced from hydroelectric dams and the gasoline contains an addition of 25% ethanol.

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FCOJ and NFC future:

Against this background, NFC and FCOJ produced in Brazil are supported by a cleaner energy matrix. Thus, major advances in reducing the carbon footprint of the sector are not expected in the short term.

It is worth remembering that the Greening is a FCOJ / NFC carbon footprint threat. The Greening increases the mortality rate / elimination, forcing the planting rate increase. In this scenario there is a productivity drop and a consequent relative emissions increase (carbon footprint).

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CitrusBR Technical Committee considers that we should work on a period of at least 3 years in order to build a base line and then, define an average for the carbon footprint of the orange juice.

Considering that we are working with a biological (agricultural) business, a longer period my be necessary to reach the best results

Experience in filling the developed templates with more crop data would be very important.

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Next steps: Update the numbers including data from 2011

Develop materials aimed to raise awareness about the need of carbon footprint reduction among the supply chain players

Benchmark the food sector, seeking for applicable good practices to our supply chain, specially, the raw material part

Examples of Recommendations to Reduce Emissions

Raw Material

The main four GHG emissions sources in the oranges production are, in descending order:

Nitrogen – changes in nitrogen source, form of application and use of correct dose, among others

Diesel – replacement for biofuels, usage of minimal cultivation operations in the orchard

Calcareous – adoption of soil detailed analysis before liming, favor the usage of higher reactivity limestone sources in small quantities

Agrochemicals – adoption of integrated pest management, use of alternative pesticides and biological pest control methods

Besides other practices to increase carbon sequestration, reduce waste, etc.

Examples of Recommendations to Reduce Emissions

Industrial Processes

The main sources of emissions are stationary combustion sources and use of electricity. The recommendations are:

- Replacement of fossil fuels by biofuels

- Pursuit of enhanced energy use efficiency

Examples of Recommendations to Reduce Emissions

Logistics

Road Transportation:

- Enhance efficiency (litres of fuel per mile) by proper maintenance of vehicles and logistic optimization

- Adoption of public policies to develop alternative means of transportation, improve condition of roads

-Innovations to develop more efficient engines and heavy vehicles that can run on ethanol

Examples of Recommendations to Reduce Emissions

Logistics

Maritime Transportation: The emissions from maritime transportation are one the lowest when compared to other means of transportation. Possibilities to reduce emissions include: - Increase energy efficiency improving design (maximum speed, capacity) and operation (planning of routes according to climate conditions, for example)

- Usage of renewable sources of energy (i.e: wind, sun, waves) - Usage of technologies to reduce emissions such as carbon capture and sequestration

Additional Comments

CitrusBR Sustainability Agenda: Focus not only on carbon footprint inventories, but on other aspects of

environmental sustainability: • Waste reduction, use of water, increased productivity, and issues common to

other Brazilian agricultural sectors (forestry code revision and others)

Focus not only on environmental sustainability, but also social and economic: • Negotiations with growers and other stakeholders to promote more

integration and transparency, especially with small producers; • Marketing Actions with the Brazilian Trade Promotion Agency aiming at OJ

consumption increase www.citrusbr.com/en