Ethanol fuel in Brazil

July 1, 2008 – 12:35 pm

Brazil is the world’s second largest producer of ethanol and the world’s largest exporter, and it is considered to have the world’s first sustainable biofuels economy and the biofuel industry leader. Together, Brazil and the United States lead the industrial world in global ethanol production, accounting together for 70% of the world’s production and nearly 90% of ethanol used for fuel.

In 2006 Brazil produced 16.3 billion liters (4.3 billion U.S. liquid gallons), which represents 33.3% of the world’s total ethanol production and 42% of the world’s ethanol used as fuel. Total production is predicted to reach at least 26.4 billion litres (6.97 billion U.S. liquid gallons) for 2008. Brazil’s 30-year-old ethanol fuel program uses modern equipment and cheap sugar cane as feedstock, the residual cane-waste (bagasse) is used for process heat and power, which results in a very competitive price and also in a high energy balance (output energy/input energy), which varies from 8.3 for average conditions to 10.2 for best practice production. The Brazilian ethanol program provided nearly 700,000 jobs in 2003, and cut 1975–2002 oil imports by a cumulative undiscounted total of US$50 billion. The production of ethanol is concentrated in the Central and Southeast regions of the country, which includes the main producer, São Paulo State. These two regions were responsible for almost 90% of Brazil’s ethanol production in 2004.
There are no longer light vehicles in Brazil running on pure gasoline. Since 1977 the government made it mandatory to blend 20% of ethanol (E20) with gasoline (gasohol), requiring just a minor adjustment on regular gasoline motors. Today the mandatory blend is allowed to vary nationwide between 20% to 25% ethanol (E25) and it is used by all regular gasoline vehicles, plus three million cars running on 100% hydrous ethanol, and five million dual or flexible-fuel vehicles. The Brazilian car manufacturing industry developed flexible-fuel vehicles that can run on any proportion of gasoline and ethanol. Introduced in the market in 2003, these vehicles became a commercial success, and by March 2008, the fleet of “flex” cars and light commercial vehicles had reached 5 million new vehicles sold, which represents around 10% of Brazil’s motor vehicle fleet and 15.6% of all light vehicles. The success of “flex” vehicles, as they are popularly known, together with the mandatory use of E25 blend of gasoline throughout the country, allowed Brazil in 2006 to achieve more than 40% of fuel consumption from sugar cane-based ethanol for the light vehicle fleet, and represents almost 20% of total fuel consumption in the road transport sector when trucks and other diesel-powered vehicles are considered.

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Historical background of Ethanol fuel in Brazil

July 1, 2008 – 11:18 am

Since the second half of the 70’s, and as a result of the 1973 oil crisis, the Brazil government has been promoting ethanol as a fuel. By 1978 the first gasohol automobile was developed.

The Brazilian government provided three important initial drivers for the ethanol industry: guaranteed purchases by the state-owned oil company Petrobras, low-interest loans for agro-industrial ethanol firms, and fixed gasoline and ethanol prices where hydrous ethanol sold for 59% of the government-set gasoline price at the pump.

These pump-primers have made ethanol production competitive yet unsubsidized. In recent years, the Brazilian untaxed retail price of hydrous ethanol has been lower than that of gasoline per gallon. Approximately US$50 million has recently been allocated for research and projects focused on advancing the obtention of ethanol from sugarcane in São Paulo.

The Pró-Álcool or Programa Nacional do Álcool (National Alcohol Program) was a nation-wide program financed by the government to phase out all automobile fuels derived from fossil fuels (such as gasoline) in favour of ethanol. It began with the anhydrous alcohol to blend with the gasoline. This mixture has been used since then and is now done with 24% of alcohol and 76% gasoline (commonly known as gasohol).

The program successfully reduced by 10 million the number of cars running on gasoline in Brazil, thereby reducing the country’s dependence on oil imports. The decision to produce ethanol from fermented sugarcane was based on the low cost of sugar at the time. Other sources of fermentable carbohydrates were tested such as the manioc. Sales of alcohol-only cars tumbled after an alcohol shortage coupled with low gas prices in the late 1980s to early 1990s.

In May 2003 Volkswagen built for the first time a production flexible fuel car, the Gol 1.6 Total Flex. Chevrolet followed two months later with the Corsa 1.8 Flexpower, using an engine developed by a joint-venture with Fiat called PowerTrain. That year production of full flex-fuel reached 39.853 automobiles and 9.411 light commercial vehicles.

By 2005, popular manufacturers that build flexible fuel vehicles are Chevrolet, Fiat, Ford, Peugeot, Renault ,Volkswagen, Honda, Mitsubishi, Toyota and Citröen. Flexible fuel cars were 15,2% of the car sales in 2004, 38,6% in 2005, 59,7% for 2006 and 71.9% for 2007. By March 2008, the fleet of dual-fuel vehicles, including autos and light commercial vehicles, had reached 5 million.

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Electricity from Sugarcane Bagasse

July 1, 2008 – 11:09 am

Sucrose accounts for little more than 30% of the chemical energy stored in the mature plant; 35% is in the leaves and stem tips, which are left in the fields during harvest, and 35% are in the fibrous material (bagasse) left over from pressing.
Part of the bagasse is currently burned at the mill to provide heat for distillation and electricity to run the machinery. This allows ethanol plants to be energetically self-sufficient and even sell surplus electricity to utilities; current production is 600 MW for self-use and 100 MW for sale. This secondary activity is expected to boom now that utilities have been induced to pay “fair price “(about US$10/GJ or US$0.036/kWh) for 10 year contracts. This is approximately half of what the World Bank considers the reference price for investing in similar projects.

The energy is especially valuable to utilities because it is produced mainly in the dry season when hydroelectric dams are running low. Estimates of potential power generation from bagasse range from 1,000 to 9,000 MW, depending on technology. Higher estimates assume gasification of biomass, replacement of current low-pressure steam boilers and turbines by high-pressure ones, and use of harvest trash currently left behind in the fields.For comparison, Brazil’s Angra I nuclear plant generates 657 MW.

Presently, it is economically viable to extract about 288 MJ of electricity from the residues of one tonne of sugarcane, of which about 180 MJ are used in the plant itself. Thus a medium-size distillery processing 1 million tonnes of sugarcane per year could sell about 5 MW of surplus electricity.

At current prices, it would earn US$ 18 million from sugar and ethanol sales, and about US$ 1 million from surplus electricity sales. With advanced boiler and turbine technology, the electricity yield could be increased to 648 MJ per tonne of sugarcane, but current electricity prices do not justify the necessary investment. (According to one report, the World Bank would only finance investments in bagasse power generation if the price were at least US$19/GJ or US$0.068/kWh.)
Bagasse burning is environmentally friendly compared to other fuels like oil and coal. Its ash content is only 2.5% (against 30-50% of coal), and it contains no sulfur. Since it burns at relatively low temperatures, it produces little nitrous oxides.

Moreover, bagasse is being sold for use as a fuel (replacing heavy fuel oil) in various industries, including citrus juice concentrate, vegetable oil, ceramics, and tyre recycling. The state of São Paulo alone used 2 million tonnes, saving about US$ 35 million in fuel oil imports.
Researchers working with cellulosic ethanol are trying to make the extraction of ethanol from sugarcane bagasse and other plants viable on an industrial scale.

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Ethanol fuel in Brazil > Effect on oil consumption

July 1, 2008 – 10:58 am

Most automobiles in Brazil run either on alcohol (E100) or on gasohol (E25) since the government made mandatory the use of 24% ethanol in the blend sold in the entire country.

Since 2003, dual-fuel (”Flex-Fuel”) or full flex-fuel vehicles that run on any proportion of ethanol and gasoline have been gaining popularity, reaching 5 million new cars and light commercial vehicles by March 2008, and 72% of car manufacturing production is dual-flex without additional cost for buyers.

Customers have 49 models available to chose from. Brazilian full flex-fuel vehicles have electronic sensors that automatically detect the type of fuel and the blend mix, and accordingly adjust the engine combustion. Users have the freedom to choose depending on the free market prices of each fuel.
Due to the lower energy content of ethanol fuel, full flex-fuel vehicles get fewer miles per gallon. Ethanol price has to be between 25-30% cheaper per gallon to reach the break even point.

Since 2005, ethanol prices have been very competitive without any subsidies, even with gasoline prices kept constant in local currency since mid-2005, at a time when oil was just approaching USD 60 a barrel. The price ratio between gasoline and ethanol fuel has been well above 30% during this period, except during low sugar cane supply between harvests. According to Brazilian producers, ethanol can remain competitive if the price of oil does not fall below USD 30 a barrel.

Presently the use of ethanol as fuel by Brazilian cars - as pure ethanol and in gasohol - replaces gasoline at the rate of about 27,000 cubic metres per day, or about 40% of the fuel that would be needed to run the light vehicle fleet on gasoline alone.

In 2006 ethanol represented almost 20% of total fuel consumption in the road transport sector when trucks and other diesel-powered vehicles are considered.

However, the effect on the country’s overall oil use was much smaller than that: domestic oil consumption still far outweighs ethanol consumption. In 2005, Brazil consumed 2,000,000 barrels of oil per day, versus 280,000 barrels of ethanol. Although Brazil is a major oil producer and now exports gasoline (19,000 m³/day), it still must import oil because of internal demand for other oil byproducts, chiefly diesel fuel (which cannot be easily replaced by ethanol).

According to government statistics Brazil produced 17.471 billion litres of ethanol in 2006, 23 billion litres in 2007 and in 2008, the Companhia Nacional de Abastecimento (Conab), expects a production growth around 14.97% and 19.46%, bringing the total ethanol production ranging from 26.45 to 27.9 billion litres.

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United States corn-based ethanol industry Vs Brazil sugar cane-based ethanol industry

July 1, 2008 – 10:52 am

Brazil’s sugar cane-based industry is far more efficient than the U.S. corn-based industry.

Sugar cane ethanol has an energy balance 7 times greater than ethanol produced from corn. Brazilian distillers are able to produce ethanol for 22 cents per liter, compared with the 30 cents per liter for corn-based ethanol. Sugarcane cultivation requires a tropical or subtropical climate, with a minimum of 600 mm (24 in) of annual rainfall. Sugarcane is one of the most efficient photosynthesizers in the plant kingdom, able to convert up to 2% of incident solar energy into biomass. Sugarcane production in the United States occurs in Florida, Louisiana, Hawaii, and Texas. The first three plants to produce sugar cane-based ethanol are expected to go online in Louisiana by mid 2009. Sugar mill plants in Lacassine, St. James and Bunkie were converted to sugar cane-based ethanol production using Colombian technology in order to make possible a profitable ethanol production. These three plants will produce 100 million gallons of ethanol within five years.

U.S. corn-derived ethanol costs 30% more because the corn starch must first be converted to sugar before being distilled into alcohol. Despite this cost differential in production, the U.S. does not import more Brazilian ethanol because of U.S. trade barriers corresponding to a tariff of 54-cent per gallon – a levy designed to offset the 51-cent per gallon blender’s federal tax credit that is applied to ethanol no matter its country of origin.

One advantage U.S. corn-derived ethanol offers is the ability to return 1/3 of the feedstock back into the market as a replacement for the corn used in the form of Distillers Dried Grain.

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