Agrifuel – Clipping

Pedro Doria today drew my attention to an interesting article that outlines a few pros and cons of Brazilian ethanol. I already left a comment there but I also decided to write here. Cutting to the chase, let’s attack the numbers:

1. The petrol prices in Brazil haven’t seen a raise for the past three years. A side effect is that the ethanol industry in Brazil has to keep being competitive facing oil prices of three years ago, although the demand is growing in Brazil. Estimates from Jan ‘03 point to a production cost of BRL 0,52 per ethanol litre in Brazil, against BRL 0,78 per gasoline litre. (Conversion made using the average exchange rate of BRL 3,3734 for Jan ‘03 and a USD 24 oil barrel. Although old, these are the easiest/latest numbers I have handy.)
2. Regarding Brazil and exports, the biggest problem we face is infrastructure. There are no roads to transport the sugarcane from the fieds to the nearby plants; no pipelines to transport the ethanol from the plants to the ports; and no ports to export ethanol from Brazil to overseas.
3. I believe the Wilson Center study mentioned is this one. Already printed but not yet read.
4. Regarding ambiental issues, I have already written about it.

The social issues, in fact, are the biggest challenge for Brazil. There are two big issues: social rights to the rural, poor workers and the huge unemployment that is about to come from implementing new machinery on sugar cane fields.

Again, the food vs. fuel debate. I consider this as a very important issue, since the poor suffer a lot more from slight changes on food prices.

“Drivers of Food Price Increases: Is it fair to blame biofuels?” (from New Energy Finance) is a study to which I haven’t had full access. However, after reading some data, one might be leaning to defend biofuels more strongly.

I still plan to go deeper on this subject over the next few days. For now, two quotes. First, the corporate one:

What should the biofuel industry do? First it must work harder to speak with a unified voice and to use that to communicate the fact that biofuels have been only one factor in the recent food price increases. Second, it must strive to clarify the true environmental impact of biofuels and to eliminate the use of feedstocks that have a negative impact. Third, it must accelerate the development of technologies that use waste or non-food crops for biofuel production. (Michael Liebreich)

And now, from a developing country point of view (same page, on comments box):

The contribution of biofuels till date, in primary energy mix is confined to 5 – 6% only, that needs to be raised, while containing escalation in food prices, and sustaining availability of food stuff for the rural and poor masses. (Dr. Jagdish P. N. Giri)

(Bold and underlilned parts by me.)

Although the second quote’s subject is approached on the third step suggested by Mr. Liebreich, Dr. Giri emphasizes “the rural and poor masses”. I consider to be important to see biofuels fully developed, as much as giving those people a chance to improve their lives. The key is to make  biofuels more than just a new excuse to dump subsidies to American and European farmers.

Original article here.

The study cited on this story affirms that the fuel vs. food debate is something we should be concerned about. Indeed, as we previously saw here, most of the current generation of biofuels under production in the US is based on transforming corn grain in ethanol, or soybean in biodiesel. Always good to mention that the sugarcane ethanol made in Brazil makes an exception to this rule, where currently 0,5% of its culturable land fuels 40% of its cars. (Strategic Affairs Office’s Biocombustíveis, October 2004, and FAO’s “Bioenergy, food security and susteinability – towards an international framework“, June 2008.)

In fact, I just ran into this study from the Brazilian government. Although it was published 4 years ago, it has interesting data on Brazilian effort to produce ethanol and biodiesel. I will publish something in the next few days, since it suits neatly the food vs. fuel debate.

My final comment will be a quote from this text:

David Morris, vice president of the nonprofit Institute for Local Self-Reliance, which promotes local generation and ownership of energy sources, does not dispute the report’s major findings but questions their significance. “Its primary findings are neither new nor controversial,” Morris says. “The net energy of soybean-derived diesel is much better than corn-derived ethanol, and cellulosic material promises to be better than both.”

All parties consulted agree that the future for biofuels lies in the ability to convert largely nonfood-based cellulosic materials to fuel. In a follow-up study published in the 8 December 2006 issue of Science, Tilman, Hill, and fellow University of Minnesota researcher Clarence Lehman continued the search for such a crop, identifying low-input high-diversity mixtures of native grasses that provide more usable energy, fewer greenhouse gas emissions, and less agrichemical pollution per hectare than either corn grain ethanol or soybean biodiesel. This study contends that these low-input high-diversity biofuels can be produced on agriculturally degraded lands and thus will not displace food production or cause loss of biodiversity via habitat destruction.

“Producing biofuel for transportation is a fledgling industry,” says Tilman. “Corn ethanol and soybean diesel are successful first-generation biofuels. The next step is a biofuel crop that requires low chemical and energy inputs and can give us greater energy and environmental returns.”

(Bold parts by me.)

The author, Steven Koonin, points out several important issues for developing the biofuels and making them a globally viable solution to the energy issue. (As he well observes at the footnote, “Brazil is a singular counterexample, where favorable agricultural conditions and a flexible processing infrastructure allow the majority of the country’s road transport to be powered economically with cane-derived ethanol.”)

This is an important remark.

Since the 1970’s Brazil already estimated that only 2% of its soil would be necessary to grow enough ethanol for its entire car fleet. Nowadays, 45% of the cars in Brazil are running on ethanol and only 1% of the Brazilian lands have sugarcane fields.

Mr. Koonin’s one-page editorial is a fast, elegant way of showing today’s challenges for the biofuel industry. Since it can be accessed from any computer, I am also pasting it after the jump. Read the rest of this entry »