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Brazil: Just Not That Into Second-Generation Biofuels
Posted September 30, 2013 While the US and the EU — two of the world’s largest biofuel-consuming-and-producing markets in the world — are moving towards the introduction of second-generation or advanced biofuels , Brazil, the second-largest producer, does not foresee production or legislation to promote cellulosic or advanced biofuels in the next ten years. Global biofuel production has grown sevenfold since 2000, and today biofuels provide 3% of road fuel transport by energy basis. According to the International Energy Agency (IEA), in 2010 the biofuel contributing percentage was particularly higher in Brazil, US and the EU, with 20.1%, 4.4% and 4.2% respectively. The IEA, the Energy Information Administration, and even the major oil companies like Exxon and BP predict a higher biofuel share in the future. BP expects biofuel consumption in Brazil to be around 38% by volume, and in the US, 24% of road transport by volume in 2030. Following US and EU biofuel legislation, cellulosic ethanol and other advanced biofuels are expected to play an increasingly large role in global biofuel production and consumption. However, Brazil is not as eager to join the race for the development and commercialization of second-generation and advanced biofuels as the other main producing countries/regions, despite having the largest share of flex-fuel cars in the world, the highest ethanol blend percentage mandate, and consumer awareness of ethanol’s positive impacts. The long history of ethanol use and the two ‘revolutions ’ Brazil has a long history of ethanol implementation that started since the first blending mandate in 1931. In the South American country, ethanol is derived from sugarcane in two ways: as hydrous ethanol, used as a complete fuel substitute (E100) and anhydrous ethanol (in proportions up to 25% mixed with gasoline E25). In Brazil there have been two major revolutions that have substantially increased the use of sugarcane ethanol in the country, which created a large first-generation ethanol market. The first revolution was the government Proalcool program in the 1970´s. During this program, ethanol as a fuel substitute was first introduced alongside ethanol-run cars (made only in Brazil). This program increased the ethanol blending mandate from 4.5% in 1977 to 15% in 1979. It also pushed ethanol-powered cars to 90% of total cars sold in Brazil in 1983. Although the program was abandoned due to ethanol shortage and lower oil prices, it provided the country with wide ethanol infrastructure adaptations for distributing, transporting and selling this type of biofuel at pump stations. The other great change in the Brazilian ethanol market took place when the flex-fuel cars became available in 2003. This type of vehicle has a new engine that can take any combination between hydrated alcohol and gasoline. In 2003, only 2.6% of new manufactured cars were flex fuel type, but by 2010, nearly 80% of all cars produced in Brazil were flex fuel-compatible. In contrast to the US market, where not more than 5% of cars can use flex fuel, Brazil has the largest market flex-fuel fleet (over 11 million) representing nearly 50% of all cars in use in Brazil, a trend that is expected to increase to 83% by 2021. The large share of flex-fuel cars prompted a substantial increase in both anhydrous (blending component) and hydrous (substitute fuel) ethanol demand. The ethanol market share within the light vehicle fleet fuel market has also reached a large proportion, attaining more than 50% in 2009 (a historic record for an alternative fuel). However, the aftermath of the 2008 crisis generated a downturn in the production and consumption of both type of ethanol fuels. The mismatch between the country’s domestic supply and demand resulted in ethanol imports from the US in 2011. Since 2012, domestic production has recovered, but the government does not expect a swift recovery to levels before the crisis. Brazil had in 2012 an ethanol market of 23.5 billion litres, down from 28 billion litres in 2010. The sugarcane feedstock advantage Brazil´s sugarcane ethanol has been characterized as the most efficient source of first-generation biofuel available, providing more than 60% reduction of greenhouse gas (GHG) emissions compared with gasoline. Current US biofuel legislation FS(2) consider sugarcane ethanol as an “advanced fuel” due to the fact that it reduces more than 50% of GHG emissions and therefore provides an opportunity to export to the US market. Moreover, the removal of the US ethanol import brought an extra incentive to spur ethanol production in the South American country. Stuck on first-generation, missing drivers and lacking second-generation policy Despite the recent US market incentives, the largest flex-fuel share in the world, and the highest anhydrous blend, Brazil has not generated stimulus to follow the US and EU’s examples for advancing legislation for the development of cellulosic ethanol and other advanced fuels. The missing drivers for such endeavor are related to characteristics of the Brazilian sugarcane ethanol, which already provide high reduction of GHG emissions, and to the lack of interest of pursuing the biotechnological route by the Brazilian government. Brazil, which has had difficulties supplying their local market since 2011, has done very little to promote the development of cellulosic or other advanced biofuels. There is currently a lack of legislation in place that sets targets for the production and incorporation of the cellulosic or advanced biofuels in the Brazilian transport mix for the next decade. Brazil/s Ministry of Energy, in its ten year plan for 2012-2021, does not foresee second-generation production in Brazil in 2021. It expects all 61 billion litres of ethanol production in 2021 to come from conventional sources. There have been few projects seeking to develop new advanced technologies using sugarcane feedstock both from government funded institutions and other private companies. However, not surprisingly, numerous projects are being developed by international companies such as Novozymes, Butamax, Dupont, Petrobras, Abengoa which are among a selected group that are in the process of receiving up to 70% of credit of their total costs from the 880 million USD PAISS program , a program financed by the National Brazilian Development Bank (BNDES) and FINEP (National Innovation Funding Agency) for developing sugarcane-based advanced biofuels. Graal Bio, in partnership with the Italian firm Beta Renewables, claims to have the first cellulosic plant of its type in South America; they are expected to be fully operational in 2014 and produce 82 million litres of ethanol per year. They plan to export their production to the United States. The development of first-generation ethanol implementation has not provided stimulus to spur cellulosic or advanced biofuel legislation and development. If cellulosic or other advanced biofuels are to be developed to large scale and play an important role in the future fuel transport mix, Brazil should be taking more steps into the promotion of such fuels, helping to diversify the feedstock sources as it currently does with sugarcane in first generation. Continue reading
Carbon-Free NZ: Mass Biofuel Production
4:10 PM Wednesday Oct 2, 2013 EXPAND The Bioenergy Strategy indicates that 30% of our transport fuels could come from biomass by 2040; Scion research has shown that, long-term, we could theoretically do 100% New Zealand is in the enviable position of potentially becoming the Saudi Arabia of biofuels in the South Pacific, without the food Vs energy debate over biofuels that has plagued other nations. New Zealand has the capacity to produce all its transport fuels from indigenous natural resources. As petroleum becomes more expensive over the next decade we can transition to transport fuels from biomass (organic matter) and waste. Technically these are achievable now, but the economics are not quite there. Internationally there are a number of technologies available to convert biomass and organic matter into liquid biofuels. Some of these have been around for decades while others are emerging (including from pioneering New Zealand companies). Unlike many countries where the focus has been on the production of ethanol from sugar crops and biodiesel from vegetable oil, we can use our cropping land for more valuable products, such as food. The New Zealand focus for biofuel production is on using our biomass from wood and organic matter from municipal waste. As a result we will not have the food Vs energy problems. Instead, in New Zealand, it’s food plus energy. Transport fuel production from renewable sources is not new to us. Anchor Ethanol has been producing ethanol from whey for a number of years. The ethanol can be blended with petrol as Gull currently does. The production of biodiesel initially focused on using the feedstocks tallow, used cooking oil or canola oil, with conventional conversion technologies. For a short period biodiesel production was supported by financial assistance from Government which stimulated fleet owners to successfully trial biodiesel. Demand for biodiesel outstripped supply. However, because of the short term of the assistance, investors stayed clear of building new production capacity. Now only Green Fuels NZ, who purchased the biodiesel production business from Solid Energy, produce biodiesel commercially. The experience of biodiesel showed the significant international marketing benefits that are achievable for NZ Inc when we seriously use biofuels in vehicles. Many tourist businesses, such as in Queenstown where all tourist operators used biodiesel, gained significant market advantage from being able to promote themselves as ‘clean and green’. This carries over into our export businesses where sustainable production is becoming more important to customers. This initial biodiesel and ethanol production was always going to be limited, but its importance with regard to transitioning to greater volumes of production was in the experience vehicle owners gained in the use of biofuels. However, there would have been enough feedstock for conventional technologies to have provided adequate quantities of biofuel until the economics of advanced biofuels occurred. The emerging biofuel production of greatest relevance to New Zealand uses advanced technologies and feedstocks of biomass or waste organic matter. These are not the most attractive feedstocks as they are low in sugars and starches. We have a lot of biomass and we are good at growing it, and we have an endless supply of organic matter in municipal waste. In fact, municipal waste costs us money to dispose of. Commercial facilities producing these biofuels are currently starting in many countries. They generally require government subsidies – the level of which gives an indication of just how close the technologies are from operating in an unsubsidised market such as ours. Taking into account petroleum price projections. I estimate we are only 5-10 years off being fully commercial. We currently waste 10-15% of our forest production through harvesting and processing. This quantity of wood residue would be enough to get biofuel production started using advanced technologies. This would promote larger quantities of biomass from extended forest planting. The Bioenergy Strategy prepared by the Bioenergy Association indicated that 30% of our transport fuels could come from biomass by 2040. Scion research has shown that, long-term, we could theoretically do 100%. The economics of this sort of production is likely to be carried through by the value of the co-products that are also extracted during the process. Wood and other organic matter is rich in chemicals, only some of which can be used to make biofuels, and these chemicals will become more valuable as petroleum prices soar. The chemicals from wood can also be used to make bio-plastics which can substitute petroleum-based plastics. Consolidation of the current sector, based around the production of transport biofuels and their co-products, along with our ability to efficiently grow wood, could lead to our working with Asian countries such as Singapore, which does not have enough land to grow wood for production of liquid fuels and bio-based materials. The demand for liquid fuels for transport and other uses is unlikely to disappear, but the price will escalate. Now is the time to start partnering with Asian countries so that we use their money, and our ability to efficiently grow wood, to produce their liquid biofuels. New Zealand could become the Saudi Arabia of the region in the production of biofuels. For weekly Element news sign up for our newsletter here Brian Cox is the executive officer of the Bioenergy Association of New Zealand. He has over 30 years’ experience in identifying, investigating and developing commercial capital investment projects in the energy and infrastructure sectors. The Association represents all commercial, research and academic parties involved with wood fuel, biogas and liquid biofuels. Previously Cox led the development of the New Zealand Bioenergy Strategy (which he now works to implement) which has been recognised within the Government’s Energy Strategy. By Brian Cox Continue reading
Cool Planet, Acritaz To Turn Palm Waste Into Biofuel In Malaysia
Details Category: Bioenergy 03 Oct 2013 Published on Thursday, 03 October 2013 Palm plantation waste will be made into biofuel and biochar Biorefinery developer Cool Planet Energy Systems and Acritaz Greentech will be building commercial facilities in Malaysia to transform palm plantation waste products – empty husks, wood, and bark waste – into biofuel and biochar Acritaz Greentech, a group of companies that bring biomass processing and bio-technology innovations to plantations, has signed an agreement with Cool Planet to explore the building of multiple commercial biomass processing facilities using Cool Planet technology in Malaysia. Cool Planet develops small-scale biorefineries that convert non-food biomass into biofuels and biochar, a soil enhancing substance. They recently announced an agreement with Concord Energy to establish a joint venture in the Asia Pacific Region to develop biofuel facilities (see related story ). “We are pleased to be working with Acritaz Greentech, a group that is known for their technology leadership in biomass processing and bio-technology in Malaysia, to deploy our biofuels and biochar technology,” said Cool Planet Chief Executive Officer Howard Janzen. Acritaz and Cool Planet will use biomass raw materials that are abundant in Malaysia – such as palm plantation waste – to create renewable cellulosic fuels for the Asian market. They will develop a plant design that satisfies the specific needs of Malaysia with the first such plant to begin construction in 2014. “Acritaz is excited to commercialize Cool Planet’s platform technology to bring drop-in fuels to the Malaysian fuel market,” said Looi Kem Loong, a director at Acritaz. “This is the kind of breakthrough technology that Acritaz wants to deploy.” Acritaz will work to commit $60 million for this first facility before the end of 2013. They plan to locate this facility in the Malaysian state of Johor. The two companies will then work to build multiple such facilities across Malaysia, with Acritaz purchasing proprietary equipment and consumables from Cool Planet. – EcoSeed Staff Continue reading
