1. FACING ENERGY SECURITY IN THE AMERICAS THROUGH AGROENERGY SOURCES Roberto Rodrigues Washington / USA - October, 28th 2008 - OAS

2. 2 26/8/2015 AGRICULTURE Source: Alan MacDiarmid, em São Carlos – SP The ten biggest problems for the humanity in the next 50 years EnergyEducation WaterDemocracy Food Population EnvironmentDisease PovertyTerrorism & war

3. 3 26/8/2015 Changes in the demand: Sustainability: Economical, social and environmental - flavor - quality - traceability - health - environment - organic products Trends

4. Trends Food Demand (2000 – 2025) + 62.0% Source: Bourlaug, N., Agroanalysis, Vol. 27, nº 03 (março/2007) Elaboration: GV Agro Demographic trends: Increase.% 2000-2025 Part.% 2025 China13.2%17.4% India36.6%16.8% Africa68.9%15.4% World33.9% 100%

5. 5 26/8/2015 Projection of the urban and rural population in the world Source: ONU Elaboration: GV Agro Trends Rural Urban billion of people

6. 6 26/8/2015 Evolution of GDP (2006-2013) Source: FMI Nota: PIB a preços de 2005 Trends - World: 4.6% a.a - Countries of G-7: 2.2% a.a - Developing countries: 7.1% a.a Participation in the world GDP Países do G-7 Countries of G-7 59.5% 53.6% Others devoloped 15.8% 15.6% Developing countries 24.7% 30.8% 2006 2013

7. 7 26/8/2015 World: offer and estimated demand for food Source: FAO (2003) Elaboration: AGE – MAPA ¹ all of consumed meats (in million tons)

8. Source: USDA (out/08) Global stockpiles Elaboration GV Agro

9. Global stocks of grains Source: USDA Note: * Soybean, Corn, Wheat and Barley. In thousand tons Elaboração: GV Agro Production x Consumption*: total in the period (2000/01-2007/08) Brazil produces surpluses to supply the world stocks

10. 10 26/8/2015 Source: UN COMTRADE Elaboration: GV Agro Main products (by value) - 1965 Brazilian agribusiness exports Agribusiness Exports: US$ 1.35 billion (84.4%) Total Brazilian Exports: US$ 1.59 billion

11. 11 26/8/2015 Main products (by value) Brazilian agribusiness exports

12. 12 26/8/2015 Developed Countries from US$ 14.4 bi to US$ 34.8 bi Variation (2000-2008*): +11.7% a.a. Developing Countries from US$ 6.2 bi to US$ 29.1 bi Variation (2000-2008*): +21.3% a.a. Source: Aliceweb-MDIC. Nota: * from jun/07toa mai/08 Elaboration: GV Agro US$ 20.5 bi US$ 63.9 bi Brazilian Agribusiness Exports

13. 13 26/8/2015 Source: CONAB Elaboration: GV Agro The use of high technology resulted on an increase of 99% in productivity at the period from 1990/1991 to 2007/08. * 1ª Estimate (october/2008) Brazilian production of grain - 27.2 million tons

14. 14 26/8/2015 Brazil: meat production Broiler +200% Beef +77% Pork +130% Sources: ABIEC, ABEF e ABIPECS Notes: *Estimative

15. % 15 26/8/2015 21st Century: the beginning of a New Era Challenge: TO DIVERSIFY ENERGY SOURCES Up to 2030, the world demand for energy should increase 58%. Sources: Nakícenovic, Grübler and MaConald, 1998 and Energy Information Administration - EIA/USA

16. 16 26/8/2015 Why biofuels?

17. 17 26/8/2015 More countries producing Elimination of myths Global strategy Organization of the market

18. 18 26/8/2015 Energetic matrix – Brazil and World Source: MME/BEN (2007) Elaboration: GV Agro World total: 11,434 Mtep Renewable sources: 45.8% Participation in the total consumption Brazil 2.1% 48.5% 100% World More countries producing In 2007, sugarcane became the second main source of energy in Brazil.

19. 19 26/8/2015 Source: BPStatistical Review of World Energy Elaboration: GV Agro Tropical region: favourable to the sugarcane production Energy: consumption per capita (2006) More countries producing 100 countries could supply biofuels to 200 nations, while currently 20 oil producers provide fossil fuels to the rest of the World. Tons oil equivalent

20. Sources: IEA, CONAB e IBGE Notas: para o cálculo da área, considerou-se um rendimento de 7.000 litros/ha. Elaboration: GV Agro Substitution of part of the gasoline 3 CENARIOS: E-5, E-10 and E-20 World: potential demand for ethanol (billion liters / year) Demand for planted area 34,4 million ha (using E-20) Worldwide demand for ethanol in the 3 cenarios (billion liters / year): 60.1 120.2 and 240.5 Market potential for ethanol

21. There is still a lot of arable land worldwilde “Taking these data at face value, and in relative terms, there is greatest potential for agricultural expansion in Sub-Saharan Africa and in South and Central America, which together form over 70% of the global potential increase.” Source: LAND RESOURCE POTENTIAL AND CONSTRAINTS AT REGIONAL AND COUNTRY LEVELS FAO Rome, 2000

22. Ethanol world production: projection to 2012 22 26/8/2015 Note: projections 2008/2012 are based on the capacity of production and the target of consumption of the main countries Source: Fapri, Acti, FO Licht, Unica and ToepferElaboration: UNICA

23. Emissions of CO 2 in 2005: 20 main polluters 23 26/8/2015 Source: Embrapa Monitoramento por Satélite Elaboration: GV Agro 50% of emissions Eliminating all myths

24. 24 26/8/2015 The replacement of 1,000 buses (diesel) by buses that use ethanol would avoid the emission of 96 tons of CO2 per year, equivalent to emissions of 20,000 cars with gasoline. Since 1970, is estimated that the use of ethanol in Brazil has avoided emissions of 644 million tons of CO2 and 25.8 million tons last year. Emission of GHG through the replacement of gasoline by ethanol Compared to diesel, biodiesel reduces in about 50% of the CO 2 emissions. Ethanol from corn (USA) Ethanol from beet (E.U) Ethanol from sugarcane (Brazil)

25. Source: IBGE and CONAB Production with sustainability Eliminating all myths

26. 26 26/8/2015 Preserved Area ** Planted Area (million ha) Production (million tons) 7.1 million of ha were preserved Sugarcane: evolution of the productivity Source: IBGE (Censo Agropecuário: 1970-1975-1980-1985; PAM (1990 até 2006); e LSPA (2007 e 2008) Elaboration: GV Agro Note: * Estimate **Area calculated by the productivity of 1970 Eliminating all myths

27. 9.3 27 26/8/2015 * Fuel completely not renewable has value lower than 1. * Values superior to 1 indicate how much renewable is the fuel. Source: World Watch Institute Balance of energy Eliminating all myths Energy contained in the fuel / Used fossil energy to produce fuel

28. Biofuels: production costs Source: OECD

29. Brazil: Automobiles and light vehicles – fleet projection (2006 to 2015) million of vehicles Sources: ANFAVEA, MAPA and ICONE

30. 30 26/8/2015 Source: UNICAMP Excluded the Amazon Region, Pantanal and declivity superior to 12% Eliminating all myths Soil and climate adapted to the sugarcane production without irrigation

31. 31 26/8/2015 Brazil: herd of cattle x pasture Eliminating all myths More efficient livestock liberation of land for the agriculture Source: IBGE (Censo Agropecuário) e IEA/SP Elaboration: GV Agro *lotação média de São Paulo (2006) pasture area cattle (heads)

32. Energy content of the sugarcane Energy contained in 1,000 tons of sugarcane (tons in petroleum equivalent ) Source: Nastari, Lisbon, 2000 Total energy: 162.59 tons in petroleum equivalent Global strategy

33. 33 26/8/2015 Source: Cogen and Unica The bagasse resulting from the processing of the cane represents 30% of the total volume. Raw material for the bioeletricity production Estimates of the potential of bioeletricity in Brazil Global strategy

34. Sugar Ethanol Exports Domestic Exports Domestic Bioelectricity - Potential - 51% 32% Participation of the products in the income of the sector Source: UNICA Note: For the calculation of the percentile of 2015/16 it was used as base the potential for production and export at constant prices of 2006.

35. 35 26/8/2015 Challenges to the sector Commercial limitations? - protected markets - internal oil protection - self-sufficiency (target of the countries) - low/high prices cycles Constant Expansion of the Offer - offer and demand balance - investments

36. 36 26/8/2015 Sectorial Regulation Research and Development Planning Administration Challenges to the sector

37. The ethanol certifications “Babel” 37 26/8/2015 ETHANOL ETHANOL PBCB Brazilian Biofuel Program Certification Brazilian Government Biofuel Certification Meó Consulting Team German Government Sustainable Production of Biomass Cramer Commission Dutch Government RTFO Renewable Transport Fuel Obligation UK Government BSI Better Sugarcane Initiative Based in United Kingdom RTSB Round Table on Sustainable Biofuels Based in Switzerland SEKAB, GREENERGY Sweden, United Kingdom : discourages initiatives and investments, particularly in developing countries. Certifications proliferation schemes is counterproductive: discourages initiatives and investments, particularly in developing countries. EU Directives European Union National Certifications Institutional Certifications Deprived certifications

38. 38 26/8/2015  gvagro@fgv.br  +55 (11) 3281-3645 Thank You!