Diversification and Flexibility: Drivers for a Sustainable Ethanol Industry

Mr. Flavio Castellari – Executive Director

APLA – Ethanol Cluster

www.brazilsugarcane.com.br

8th Bioenergy Week and Study Tour for Capacity Building18th march 2021

Prospected more than US$ 336 million in our missions

Visited Ethiopia, Gana, Guinea Bissau, Mozambique, Nigeria, Kenya, Senegal, Sudan, Tanzania, Zambia and we received guests from

Uganda, Equatorial Guinea, Egypt, Angola and Swaziland and others

32 missions in Africa; 7 in Sudan and 6 South Africa and Nigeria

Africa is one of the main markets to the Brazilian Sugarcane Sector. In the 2019/20 season, Argelia, the first destination, represented

13% of all brazilian sugar exported and Nigeria, as third, represented 8%;

APLA presence in Africa

Source: CCAB; COMEXSTAT (2019)

Diversification

Generation

Generation

Sugarcane

Juice

Bagasse

Vinasse

Biomass

Sugar

Ethanol

Biomass

Fertilizers

Biogas

Fertilizers

Fuel

2nd Gen. Ethanol

Electricity

Steam

Electricity

Steam

Electricity

Diversification – Sugarcane Production Chain

Source: DIAS, T. (2016)

Fuel

Cellulose

Diversification

Flexibility

Sustentability

To Eat To Drive To Fly To Plug Reduces Emision To challenge

Sun

Water

Earth

Sugarcane

Sugar

Ethanol

Bioelectricity

Feedstock

CO2

photosynthesis

Reduction of GHG emission

Bioplastics, Biochemical and yeast

Electricity with low CO2 emissions

Fuels with low CO2 emissions

Food

FOR BUSINESS

Diversification – Market Application

Biogas Heat, Cogeneration and Fuel

Diversification

Flexibility

Sustentability

and to DRINK, CHEERS!

SOURCE EPE apud BEN (2020)

Non-renewable1%

Nuclear2%

Mineral Coal5%

Others renewable7%

Vegetal Coal and Wood

9%

Natural Gas12%

Hidraulica12%

Sugarcane and derivatives

18%

Petrolium and derivatives

34%

Diversification

Flexibility

Sustentability

Diversification – Matrix in Brazil in 2019

Flexibility

Proportion (mix) of Sugarcane destinated to sugar and etanol production by season

Source: DATAGRO (2021)

Flexibility – Production Mix Diversification

Flexibility

Sustentability

Source: ANFAVEA; DATAGRO; UNICA

GRAPHIC BY: APLA

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Gasolina Etanol Flex fuel Diesel

Ethanol replaced 46% of the gasoline consumption in 2019 season

Diversification

Flexibility

Sustentability

Flexibility - Flex Fuel Engines Production

Diversification

Flexibility

Sustentability

Flex Fuel Producers in Brazil

Sustentability

A mill grinding 1 ton of Sugarcane can generate

25,7 Liters 2G/ton

In 2019/20:6,11 million of liters using106.300 tons of bagasse

and straw

Source: CTC; DATAGRO; CONAB; NOVACANA

Diversification

Flexibility

Sustentability

• Economy from gasoline imports: US$ 540.6 billion• Per capita GDP rises of US$ 1,098 in cities where ethanol is produced

Ethanol

81 Liters 1G/ton

In 2019/20:34 billion of liters using

418 millions tons ofsugarcane

1 ton Straw = 500 kWh1ton bagasse =

300kWh

200kg Straw 250 kg Bagasse

Bioelectricity – Straw and Bagasse Potencial

1 ton of Sugarcane

Source: UNICA. (2020).

Diversification

Flexibility

Sustentability

Source: ABRACEEL, CEISE Br, COGEN, UNICA. (2019).

8,89,9

12,1

16

19,320,2

21,2 21,4 21,522,5

2% 2% 2%

3%

4% 4% 4% 4%

3,40%

5%

0%

1%

2%

3%

4%

5%

6%

0

5

10

15

20

25

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Exported to the grid (in thousand of GwH) Representative to the national grid (%)

Diversification

Flexibility

Sustentability

Bioelectricity - Sugarcane electricity exported tonational grid

Bioelectricity

22,5 thousands of GWh

to the grid in 2019

Supply for 11,9 millions of

households/year

Source: ABRACEEL, CEISE Br, COGEN, UNICA. (2019).

US$ 2,37 billion (US$ 0,105/kWh in 2020)

Diversification

Flexibility

Sustentability

5.8billions

41.4billions

Electricity:88.456 GWh/year

18,7% of Brazilian consumption in 2018

Fuel:21,8 bim³/ano

32,9% of Brazilian consumption in 2018Sugarcane

Biogas – Brazilian Potencial Diversification

Flexibility

Sustentability

AgribusinessSanitation

37.4billions

BRAZILIAN BIOGAS POTENTIAL, BY SOURCE (Nm³/year)

Source: ABiogás.