1 Joel Velasco Chief Representative – North America [email protected]www.unica.com.br BRAZILIAN SUGARCANE INDUSTRY ASSOCIATION UNIÃO DA INDÚSTRIA DE CANA-DE-AÇÚCAR Outlook for Brazilian Ethanol in U.S. Sugarcane Ethanol as a Low Carbon, Advanced Renewable Fuel
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1 Joel Velasco Chief Representative – North America [email protected] BRAZILIAN SUGARCANE INDUSTRY ASSOCIATION UNIÃO DA INDÚSTRIA.
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NaN NaN NaN NaN 0.1 0.25 0.5 1 1.75 3 4.25 5.5 7 8.5 10.5 13.5 16
Non-celulosic Advanced
NaN NaN NaN 0.1 0.2 0.3 0.5 0.75 1 1.5 2 2.5 3 3.5 3.5 3.5 4
Biomass-based Diesel
NaN NaN NaN 0.5 0.65 0.8 1 1 1 1 1 1 1 1 1 1 1
E-10
14.18449121
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14.25029213
05
14.36781799
79
14.58574552
92
14.69683282
47
14.75112940
12
14.84592582
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14.94461842
92
14.98721914
39
14.91909221
08
14.88727069
47
14.80197569
85
14.70902429
87
14.44694927
5
14.16664625
07
13.90390748
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13.51656247
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3
8
13
18
23
28
33
38B
illio
ns
of G
allo
ns
E-10 Blend Wall
LOWER GHG
U.S. RENEWABLE FUELS STANDARD (RFS2)
Source: EISA of 2008, Dept of Energy, ITC; E-10 Blend Wall Limit based on EIA’s projections of gasoline consumption and do not include bottleneck and other infrastructure concerns.
Sugarcane with at least 40% GHG
Reduction
15
EPA: INITIAL PROPOSAL’S LIFECYCLE ANALYSIS
Source: See Figure 2.1-2. “Lifecycle GHG Results Using 100-Year Net Present Value with 2% Discount Rate” in page 282 of Discussion Draft of Environmental Protection Agency (EPA) Regulatory Impact Analysis, May 2009. Range shows net emissions if EPA assumes all land conversion from forest (upper bound) and all from grassland (lower bound).
16Sources: UNICA’s comments to EPA on September 25, 2009.
UNICA: SUGARCANE GHG REDUCTION UNDER EPA’s RFS2
100 years2% Discount
30 years0% Discount
EPA Proposed Rule -44% -26%
Brazilian Regional Land Use Modeling -64% -52%
Recognizing Carbon Uptake of 17tC/ha
-69% -60%
Emission Credits for Cogeneration
-82% -73%
Sugarcane ethanol to meet “Advanced Biofuel” threshold
17
CALIFORNIA’S LOW CARBON FUEL STANDARD (LCFS)
Source: California’s Low Carbon Fuels Standard Programhttp://www.arb.ca.gov/
The LCFS calls for a reduction of at least 10 percent in the carbon intensity of the state's transportation fuels by
2020. California consumes about 15 billion gallons of
gasoline a year
Other states may follow California’s lead, going beyond RFS requirements
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Gasoline LCFS in 2020 Corn Ethanol Sugarcane Ethanol0
20
40
60
80
100
120
9686
69
12
30
46
LCFS WITH “INDIRECT LAND USE” PENALTY
Source: California Air Resources Board’s Low Carbon Fuel Standard, August 2009.
Gra
ms
of C
O2
per
meg
ajou
leDespite Modeling Errors, Sugarcane Ethanol is Lowest Carbon Liquid Fuel
Source: California Air Resources Board’s Low Carbon Fuel Standard, August 2009. See also “Table 3.4: LCFS – Complying E10 Blends” of California Energy Commission report “Transportation Energy Forecasts and Analyses for the 2009 Integrated Energy Policy Report.”
Gra
ms
of C
O2
per
meg
ajou
le
RE
PO
RT
ING
ON
LY
LCFS SIMULATION WITH SUGARCANE ETHANOL
E-10 Blend with Sugarcane Ethanol using exaggerated
ILUC
COMPLIANCE WITH CREDITS?
Even with ILUC, 10% sugarcane ethanol blends meet LCFS to 2017
2020
World Sugar MarketsWhy are sugar prices at 28 year high?
③
21
SUGAR MARKET DYNAMICS
• With low sugar prices (until earlier this year), sugar (as opposed to ethanol) production was not increasing in Brazil for last two crop years…
• … but world sugar market is in structural deficit, exacerbated by India’s switch to net importer among other reasons.
• So, Brazil is boosting sugar production (+12% in south-central region) yet key sugar markets are not accessible.