WORLD ETHANOL MARKET/ O MERCADO MUNDIAL DO

ÁLCOOLOpportunities and Challenges/ Oportunidades e Barreiras

ByDr. Frank Rosillo-Calle

Imperial College London FÓRUM ENERGIA E AMBIENTE

Mudanças Climáticas : Impactos e Tendências nos TransportesUNICAMP, 5 Outubro 2004

CONTENTS/ CONTEUDO• Summary/Sumário • Types of ethanol/ diferentes categorias de álcool• World ethanol production/ Produção mundial do álcool• Main programmes/ Programas principais• International ethanol market/ O mercado mundial do álcool• Opportunities and challenges/ Oportunidades e barreiras• The Market/ O Mercado

• PERSPECTIVES/ PERSPECTIVAS - Policy Incentives/ Políticas de estímulos

– Feedstock tech, R&D/ Matérias-primas, PeD - Markets/ Mercados

– Synthetic versus biofuels/ Combustíveis sintéticos vs. bioetanol - The FFVs/FLEX-FUEL

• Conclusions/ Conclusões

Types of ethanol/ diferentes categorias de álcool

- by feedstock e.g. biological vs. synthetic• - by composition/composição• -- anhydrous vs. hydrous/ hidrous vs anhidrous• -- Biological: grain, sugarcane, fruit, etc/ grãos,

cana, frutas, etc• Synthetic: derived from oil, gas or coal/ petróleo,

gás, carvão mineral)• End use/ Usos finais

– Fuel, industrial, beverages/ combustível, bebidas…

Feedstock/Materia prima

• Sugarcane the most promising/cana é mais promissora

• - produced in 100+ countries

• - Exception: USA, EU and China

• Other: corn, cassava, sweet sorghum, potatoes/ maize, mandioca, sorgo sacarino, batata

• Sugar crops (70%, 2003; 80% 2010)

Main ethanol producers 2003/ Producao mundial de alcool

• World 38+ Bl (13 countries/países)• Brazil 14.2 BL• USA 10.6 BL (circa)• EU c. 2.2 BL (incl. bioethanol-based ETBE+

Synthetic- incu ETBE a partir do álcool)• Others, c.2 BL• (Australia, Canada, Colombia, China, India,

Mexico, Peru, South Africa, Thailand, etc)• 35 countries interested

POTENTIAL/POTENCIAL

• World/Mundo =60-70 BL in 2012; 120 BL in 2020 (c.10% transport fuels)

• Brazil 22 BL in 2012• USA 20 BL (2012)• EU 8-10 BL (2010)• Canada1.33 BL 2010)• China 10 BL (2010?)• India 1.5 BL• LA/AL 3-5 BL (Peru 1.2 BL; Colombia, 1 BL..)

INTERNT. MARTKET/O MERCADO INTERNACIONAL

• Need to create sizable production/ consumption centres (Brazil, USA, EU, China, India, Thailand)/ Necessidade de um mercado maior (produção e uso)

• Easy to transport long distances/Fácil de transportar distâncias longas

• Greater security/stability to possible shortfall in any country or region/ Maior seguridade e estabilidade

BRAZIL

• World largest potential/ Brasil tem o maior potencial mundial

• Exports: 2003 = 770 Ml; 2004 = 1.5 BL

• World export market c.7 BL (2012); Brazil could supply 4-5 BL – (JAPAN 1.8 (3% blend/mixtura) – c3BL(5%

blend); China 5BL; EU 2- 5 BL

BRASIL destino das exportacoes em 2003 (ML)

• Americas (C, N +Caribe) 253.3(33%)• Europa………………….. 219.3(29%)• Sul/Sudeste Asia +……. 214.0(28%)• Africa……………………. 80.4(10%)• America do Sul………… 2.3• Otras regioes………….. 58.0(7.55%)

(JournalCana www.procana.com)

THE INTER. MARKET/ O MERCADO INTERNACIONAL

• PITFALLS WITH ETHANOL TRADE/Dificuldades• 3 BL/yr traded globally/Mercado mundial• New trade agreements (i.e. Brazil with China, Japan,

India) • Concern over supply (too inelastic)/Preocupação com

fornecedores• Unstructured, not standardised/Falta de estrutura • Growing rapidly due to its potential contribution to

transportation/ Acréscimo rápido pelo aumento da demanda

• A new global ethanol futures created in NY (by NY Board of Trade)

• Trade barriers & high storage costs/Barreiras e alto custo de armazenagem

• It is relatively easy to set up a domestic ethanol fuel industry/ É fácil montar um programa de álcool

• Ethanol fuel is mostly aimed at the domestic market/ Álcool combustível é normalmente para o mecado nacional

• Market price does not reflect its real benefits/ O mercado não reflete todos os benefícios sociais

• Possible trading distortions (e.g. pressure from farmers and subsidies)/ Distorções do mercado

• Need for new investment & infrastructure/ Investimento e estrutura• Market fluctuations (weather, currency devaluations, etc)/ Mudanças

do mercado são constantes

FEEDSTOCK & TECH ISSUES/ MATERIA PRIMA EQUESTOES

TECNOLOGICAS • MAIN CHALLENGES:

– Increase productivity /Aumento da produtividade– Reduce cots e.g. today c.60% of feedstock/Custos – Conversion technology is not the problem/Tec. de conversão

não é o maior problema– Competition from synthetic fuels/ Competição com combustíveis

sintéticos fósseis – Poor R&D funding/ P&D é pobre– Fragmentation, short term R&D/ P&D muito fragmentada e curto

prazo– Lack of cooperation/ Pouca cooperação entre os centros de

pesquisa– Lack of innovativeness/ Falta de iniciativas inovadoras

FEEDSTOCK TECH, CONT…

• Greater commitment from the private sector/Maior participação do setor privado e da indústria

• More industrial participation• Greater attention to environmental issues/ Maior

atenção as questões ambientais• Greater use of by-products/ Maior utilização dos

sub-produtos• Explore new markets/possibilities aggress.

– Hydrolysis of bagasse + co-firing– Ethanol from sugarcane leaves

POLICY/POLITICAS

• Growing demand mostly from Asia/Maior demanda na Ásia

• International trade increasing/ Maior crescimento do mercado internacional

• Increase international competition/Maior competição• Importing countries (China, EU, USA, Canada, Japan..)

more demanding • Key driver: cost competitiveness/ Fator principal e o

baixo custo • International policy reforms (WTO)/ Reformas da OMC• New opportunities (ethanol, sugar demand)• Challenges: sweeteners, corn, synthetic fuels…

TECHNOLOGY TRENDS/ Tec no futuro

• No major breakthroughs/ Não vai haver novas grandes descobertas• Blends in differing proportions/ Misturas• Ethanol from cellulose containing material/ álcool a partir de

material de celulose– Cost main obstacle/Custos

• - First cellulose ethanol commercial plant in Canada/ Planta comercial no Canadá

• - Japanese offer pre-design pilot plants• . Perhaps 5+ years• - genetically engineered microorganisms • Sugarcane producing countries R&DD on cane rather than other

cellulose material/ Cana deve ter papel fundamental

SYNETHETIC VS BIO, CONT..

• R&D on synthetic fuels (oil, coal + n. gas) is gathering pace/ P&D em combustiveis sintéticos estão crescendo

• Fossil fuels are abundant, particularly coal/ Grandes quantidades de carvão mineral

• The quality of synthetic fuels is high • These fuels quality is improving and will develop,

eventually, into even higher and cleaner fuels/ Aumento na qualidade dos combustíveis sintéticos fósseis

Cont..//

• Other RE, will increase their contribution/ Contribuição das energias renováveis

• “WE DRIVE ON INDUSTRIALLY MANUFACTURED FUELS. THE TECH IS CONSTANTLY IMPROVING UNDER CONSTANT SOCIO-ECONIMIC PRESSURES” / Nós usamos combustíveis industriais. Esta tecnologia muda constantemente, devido a pressões sociais e econômicas”

SYNTHETIC VS BIOFUELS

• Synthetic fuels will become increasingly important (alcohols, diesel and gasoline)

• They will not go away/ Os combustiveis sintéticos vão ter uma importância maior no futuro

• South Africa produces 40% (oil, coal and natural gas) – New plants are coming on stream in USA, Malaysia/ – This has major implications for biofuels/ Implicações

para bio-combustiveis como o álcool, etc.

THE FFVs/FLEX-FUEL

• Idea from the USA Alternative Fuels Act of 1988

• 1992 GM introduced the Flex-Fuel vehicles in the USA;

• Currently over 1.5 million vehicles in USA

• Brazil….

• The FFVs-Fuel-flex is an “intelligent engine”

CONCLUDING/ Conclucoes….

• Demand for ethanol fuel will increase/ Demanda para álcool vai aumentar e pode contribuir 10% da demanda mundial

• Few feedstock are economic/ Custos• Need a truly international market/ Necesidade de

desenvolver um mercado internacional de álcool • Great potential for Brazil/ Grande possibilidade para o

Brasil que pode se tornar líder mundial de exportação• Synthetic fuels (coal & natural gas) will increase/ • FFVs-Flex-fuel- opens new possibilities (fuel flexibility,

economic. & environment)

MAIN REFERENCES

• www.dmb.com.br • www.procana.com• www.revistaalcoolbras.com.br • www.renewable-energy-world.com • Lew Fulton (2004) Biofuels for Transport – An

International Perspective, IEA• C. Berg (2004) World Fuel Ethanol- Analysis and

Outlook (www.distill.com/World-Fuel-Ethanol )

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