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PETROBRAS The business case for action Future International Climate Policy Workshop The Business Case for Action Ildo Luis Sauer Petrobras Gas and Energy.

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Presentation on theme: "PETROBRAS The business case for action Future International Climate Policy Workshop The Business Case for Action Ildo Luis Sauer Petrobras Gas and Energy."— Presentation transcript:

1 PETROBRAS The business case for action Future International Climate Policy Workshop The Business Case for Action Ildo Luis Sauer Petrobras Gas and Energy Director

2 PETROBRAS The business case for action G24 Climate change poses one of the most significant challenges of the 21st century Responsibility to act on climate change The companies have assets or investiments that would be affected by changes in climate Prospect of increased regulation Small costs today can become material costs in the future Companies have begun to act in a variety of ways Need for further, substantial efforts to reduce greenhouse gas emissions STATEMENT OF G8 CLIMATE CHANGE ROUNDTABLE-JUNE/2005

3 PETROBRAS The business case for action KEY PRINCIPLES Policies based firmly on good science and rational economics Policy frameworks that use market-based mechanisms offer the best hope for unleashing needed innovation and competition Solutions must be global Integrated approach to the problem and its solutions is critically important – Business, Government and Consumers Climate change mitigation must not be viewed in isolation from other highly important challenges STATEMENT OF G8 CLIMATE CHANGE ROUNDTABLE-JUNE/2005

4 PETROBRAS The business case for action More resources and attention on assessing the magnitude of adverse effects on human health, natural ecosystems, and regional and global economies - need of near-term adaptation measures Strengthen the global observation systems that are now underway or may evolve in the future (e.g. sea level rise, sea/ice cover) Move expeditiously to adopt climate stabilization targets that will define the scope and scale of mitigation needed in the years ahead STATEMENT OF G8 CLIMATE CHANGE ROUNDTABLE-JUNE/2005 SCIENCE

5 PETROBRAS The business case for action Create long term value Establish a long term, market-based policy framework extending to 2030 that will give investors in climate change mitigation confidence in the long term value of their investments. Establishing indicative signals extending to 2050 would also be beneficial Ensure that the policy framework is global in scope Define greenhouse gas emissions rights through a cap-and-trade system or other market-based mechanisms Address climate change as part of an overall sustainable development agenda, putting in place mechanisms which address the challenges of poverty, energy, and economic growth in emerging markets while mitigating greenhouse gas emissions. POLICY FRAMEWORK STATEMENT OF G8 CLIMATE CHANGE ROUNDTABLE-JUNE/2005

6 PETROBRAS The business case for action POLICY FRAMEWORK Unleash technological innovation through performance-based incentive programs G8 governments must emphasize performance-based standards in new initiatives aimed at rapid commercialization of low carbon technology Ensuring compatibility with other societal objectives is equally important, together with the ability to optimize greenhouse gas reductions across product life cycles Establish common metrics Work toward convergence of existing greenhouse gas reporting processes and systems. Utilize the power of procurement and supply chain drivers Business and the G8 governments should work together to establish a practical toolkit for integrating climate change into their global supply chain requirements Business and government should commit to use such a common framework and encourage its use in stages of supply chains STATEMENT OF G8 CLIMATE CHANGE ROUNDTABLE-JUNE/2005

7 PETROBRAS The business case for action POLICY FRAMEWORK Facilitate greater investment in low carbon economic growth in emerging markets The G8 governments should step up collaborative efforts with emerging market nations to streamline and encourage low carbon investment The G8 nations should engage in a major new partnership with China, India, Brazil, South Africa and Mexico to establish appropriate frameworks Kyoto Protocol G8 governments that have ratified the Kyoto Protocol should launch immediately a consultative process with the UNFCCC to engage experienced global businesses in an assessment of the CDM, with the goal of implementing measures to streamline the process substantially STATEMENT OF G8 CLIMATE CHANGE ROUNDTABLE-JUNE/2005

8 PETROBRAS The business case for actionCONCLUSION work together on climate change mitigation properly designed programs and incentives needs and aspirations of emerging markets Business and governments can – and must – work together on climate change mitigation. Working together, we can identify and implement policy measures that will create meaningful and effective solutions, while at the same time ensuring long term value for shareholders. With properly designed programs and incentives, we can unleash the power of the market to accelerate the deployment of low carbon technologies, engaging both producers and consumers alike. And with the right kind of focus on both the needs and aspirations of emerging markets, we can ensure that a truly global solution to the problem is achieved. We are firmly committed to do our part on climate change. A coordinated and vigorous response from the G8 governments along the lines suggested above will allows us to do even more. STATEMENT OF G8 CLIMATE CHANGE ROUNDTABLE-JUNE/2005

9 PETROBRAS The business case for action BRAZIL IN ACTION DEVELOPED COUNTRIES HISTORIC RESPONSABILITY ON CLIMATE CHANGE COMMON BUT DIFFERENTIATED RESPONSIBILITIES AND BRAZIL ASSUMES ITS RESPONSIBILITIES MAIN GOVERNMENTAL PROGRAMMES: KYOTO PROTOCOL COMPLIANCE NATIONAL BIODIESEL PROGRAMME PROINFA HISTORIC PROGRAMMES IN ACTION: PROALCOOL, CONPET AND PROCEL

10 PETROBRAS The business case for action PETROBRAS IN ACTION PETROBRAS STRATEGY DECLARES ITS SOCIAL AND ENVIRONMENTAL RESPONSIBILITY AND PETROBRAS ASSUMES ITS RESPONSIBILITIES MAIN PROGRAMMES AND ACTIONS: DEDICATED AREA ON SUSTAINABLE DEVELOPMENT AND GHG EMISSIONS AVOIDANCE PROJECTS PETROBRAS ENERGY EFFICIENCY PROGRAMME TECHNICAL AND FINANCIAL SUPPORT TO CONPET BIOFUELS AND OTHER RENEWABLE ENERGY SOURCES

11 PETROBRAS The business case for action Petrobras Energy Efficiency Programme Efficiency actions will save 3,919 bbl oil equivalent / day in 2006 and 7,080 bbl oil equivalent / day in 2011 It is expected that these actions will avoid about tCO 2e in 2006 and 1, tCO 2e in 2011

12 PETROBRAS The business case for action Brazilian Programme for Rational Petroleum Use - CONPET CONPET actions reduced the burning of liters of diesel in 2005 These actions avoided about tCO 2

13 PETROBRAS The business case for actionBiodiesel Petrobras Biodiesel Supply [10³ m³/yr] Avoided Emissions [10³ tCO 2e /yr] ,2611,454 Source: Petrobras Business Plan There are no approved baseline and monitoring methodologies of biofuel project activities in the context of Kyoto CDM All proposed methodologies include complex life cycle analysis of either the biodiesel and the diesel production chain There is no definition about CER (Certified Emission Reductions) titularity

14 PETROBRAS The business case for action Coari-Manaus Gas Pipeline Operation scheduled for 2008 Pipeline will supply natural gas for Manaus area Diesel and fuel oil will be substituted by natural gas at the power plants that supply Manaus system It is expected that the fuel substitution at these power plants will avoid about tCO 2e in the period

15 PETROBRAS The business case for action Renewable Electricity Generation Wind Power Source: Based on Petrobras Business Plan Until MWh will be generated from wind power plants It is expected that the renewable energy will avoid about tCO 2 in 2011

16 PETROBRAS The business case for action Renewable Electricity Generation Small Hydropower Plant (SHP) Source: Based on Petrobras Business Plan Until MWh will be generated from SHP It is expected that the renewable energy will avoid about tCO 2 in 2011

17 PETROBRAS The business case for action Natural Gas Flaring Reduction Petrobras is making efforts to reduce natural gas losses m 3 /day of natural gas flaring reduction avoided about tCO 2 in six years

18 PETROBRAS The business case for action Conversion from single cycle to combined cycle power generation Conversion from single cycle to combined cycle power generation in Petrobras power plants will avoid GHG emissionsConversion from single cycle to combined cycle power generation in Petrobras power plants will avoid GHG emissions Três Lagoas Power Plant (MS) will have an increase of 110 MW in generation capacity, avoiding tCO 2 /yearTrês Lagoas Power Plant (MS) will have an increase of 110 MW in generation capacity, avoiding tCO 2 /year Canoas Power Plant (RS) will have an increase of 90 MW in generation capacity, avoiding tCO 2 /yearCanoas Power Plant (RS) will have an increase of 90 MW in generation capacity, avoiding tCO 2 /year There are also other similar projects in Petrobras thermal power system that are being evaluated. For example, Eletrobolt Power Plant could avoid about tCO 2 /yearThere are also other similar projects in Petrobras thermal power system that are being evaluated. For example, Eletrobolt Power Plant could avoid about tCO 2 /year

19 PETROBRAS The business case for action Turboexpander Electricity Generation The instalation of turboexpanders in Petrobras Refineries can be considered elegible for CDM For example, a 22.4 MW turboexpander can avoid the emission of 86,600 tCO 2 /year

20 PETROBRAS The business case for action N 2 O Abatement in Fertilizer Production N 2 O technology abatement in fertilizer plants can contribute to reduce GHGs Petrobras fertilizer plant could reduce tCO 2e /year

21 PETROBRAS The business case for action Agrofertilizer Production Petrobras is developing a project to produce agrofertilizers from oil shale, which can substitute conventional fertilizers It is expected that the use of these agrofertilizers will avoid about tCO 2e /year

22 PETROBRAS The business case for actionEthanol Brazil is pioneer and leader in ethanol large scale production and use in vehicles New technologies (e.g. flex-fuel) are improving the use of ethanol in vehicles It is estimated that ethanol will avoid about t CO 2e in the period These emission reductions are not eligible under current United Nations Framework Convention on Climate Change CDM rules (due to additionality issues)

23 PETROBRAS The business case for action


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