BIOFUELS
50 QUESTIONS AND ANSWERS
ABOUT THIS NEW MARKET

Ministério das Minas e Energia

BIOFUELS
50 QUESTIONS AND ANSWERS
ABOUT THIS NEW MARKET

Presentation
T he history of biofuels in Brazil began with pioneering tests carried out between 1905 and 1925 with ethanol. In 1931, the Brazilian Government passed a decree which obliged the mixing of 5% of alcohol in gasoline imported in to the country; seven years later, Decree-Law No. 737 extended the obligation of mixing 5% of alcohol also to gasoline produced within Brazil. In the 60s, the discovery of vast oil reserves in the Middle East lessened the world’s interest in biofuels. However, with the first world oil crisis in 1973, the search for new energy sources restarted. In 1975, Brazil launched the National Alcohol Program (known as Proálcool) – the largest program for the commercial use of biomass for energy purposes in the world. Two years later, Professor Expedito Parente, of the Ceará Federal University, discovered biodiesel made from cotton oil and, in 1980, he registered the first world wide biodiesel patent, now in the public domain. Throughout the world, with the passing of the years and the intermittent energy crises, associated to a greater demand for fossil fuels, new and strong stimuli emerged for the development of production technologies both for ethanol and biodiesel. These two products are starting to have a leading role in the world’s energy matrix and in the international fuel market. Thanks to its climate, geography, vast areas available for cultivating grain and sugar cane and, also, the high technology developed by Petrobras, in the past few years Brazil has become, in world terms, one of the largest producers of biofuels, with a singular and enviable potential

Presentation

for growth. Currently, nine out of ten cars sold in Brazil have flex fuel engines, that is, they are powered by gasoline and alcohol. Bus fleets, trains and trucks powered by biodiesel are already in use – and the trend, certainly, is for this market to grow considerably in the next few years. Exactly for this reason and to explain the importance of biofuels, their markets and numerous advantages, that Petrobras took the decision to produce specific information material on the subject. The booklet “Biofuels: 50 questions and answers about this new market” seeks to describe the main issues of this new market, but without intending to be fully comprehensive. It is a dynamic publication – just like the biofuel market itself, and it will require periodic updates, whether in the printed form or the electronic version, available on the Petrobras portal on the internet (www.petrobras.com.br). With the booklet, Petrobras hopes to increase the number of communication channels and make them ever more useful for their various publics, from teachers to authorities, from media professionals to sector technicians.

Summary

ABOUT BIOFUELS

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Chapter one

1. What are biofuels? ........................................................................................................................ 7 2. What is renewable energy? ........................................................................................................ 7 3. Are biofuels and biomass the same thing? .............................................................................. 8 4. What types of biofuels for transport purposes are produced in Brazil? .......................... 9 5. What is the current role of biofuels in the world’s energy matrix? .................................. 9 6. What is the current participation of renewable energy sources in the Brazilian

and world energy matrix? ........................................................................................................ 10
7. Do biofuels represent almost half of the Brazilian energy matrix? ................................ 11 8. What is the role of Petrobras in the production and distribution of biofuels? ............ 12 9. What is the importance of CENPES in the biofuel production process? ........................ 13 10. What are the benefits and advantages of biofuels (for the consumer, for the

environment, for Brazil’s economy and for vehicles)? ...................................................... 14
11. How many vehicles are powered by biofuels in Brazil? .................................................... 16

ABOUT BIODIESEL

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Chapter two

12. What is biodiesel? ...................................................................................................................... 18 13. Does biodiesel have the same characteristics as diesel made from oil? ........................ 18 14. What are the ingredients used in the production of biodiesel? ...................................... 18 15. What are the raw materials used in the production of biodiesel? .................................. 19 16. What are the mixtures of biodiesel with diesel oil called? ................................................ 20 17. Is there a difference in performance of biodiesel powered vehicles? ............................ 20 18. What will be the cost of biodiesel to the consumer? ........................................................ 21 19. Can any vehicle use biodiesel? ................................................................................................ 21 20. O aumento do uso do biodiesel afetará o diesel consumido e produzido no Brasil? .. 21 21. What is the estimate for Brazilian biodiesel production in the short, medium

and long terms? .......................................................................................................................... 22
22. How is biodiesel distributed in Brazil? .................................................................................. 23 23. What is the projection for biodiesel production in the next years? .............................. 23 24. What are the biodiesel auctions, how are they carried out and why? .......................... 24

ABOUT H-BIO

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Chapter three

25. What is H-Bio? ............................................................................................................................ 26 26. What is the difference between H-Bio and biodiesel? Are they competing? ............ 26 27. Is H-Bio already being used in the production of diesel oil at Petrobras refineries? .............. 27

Summary

28. Is H-Bio already available on the international market? .................................................. 27 29. What is Petrobras’ H-Bio production capacity? .................................................................. 28 30. What is Petrobras’ projection for H-Bio production in the coming years? .................. 28

ABOUT ETHANOL

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Chapter four

31. What is ethanol? ........................................................................................................................ 30 32. Are ethanol and methanol the same thing? ........................................................................ 30 33. Is ethanol production increasing in Brazil? .......................................................................... 31 34. How is ethanol produced in Brazil and the world? ............................................................ 31 35. How is ethanol distributed in Brazil? .................................................................................... 32 36. How many liters of ethanol are consumed in Brazil and how many liters

are exported to other regions? ................................................................................................ 32
37. What are the official projections for ethanol production in the coming years? ........ 33 38. How much will be invested in ethanol production in the medium and long terms? .... 34 39. How many alcohol plants are operating in Brazil? ............................................................ 34 40. Is it possible to produce ethanol from other sources? ...................................................... 35 41. Is the use of agricultural land for growing sugar cane a threat to the land in the

Amazonian region? .................................................................................................................... 35
42. What are the prospects for exporting Brazilian ethanol? ................................................ 36

SOCIAL, ENVIRONMENTAL, ECONOMIC AND REGULATORY ASPECTS
Chapter five 43. Which bodies regulate and inspect the biofuel market in Brazil? .................................. 38 44. What are Petrobras’ targets for the biofuels market in the coming years? ................ 38 45. Are biofuels competitors for fossil fuels? ............................................................................ 39 46. How do biofuels contribute to reducing global warming? .............................................. 39 47. As well as producing energy can biofuels be used for producing

other materials? ........................................................................................................................ 40
48. How do biofuels contribute to generating employment and distributing

income in Brazil? .................................................................................................................... 41
49. Does the biofuel program prejudice the supply of food when it uses

agricultural land for producing ethanol and biodiesel? ................................................ 42
50. How can the export of biofuels stimulate the Brazilian economy? .............................. 43

SOURCES .................................................................................................................................. 44

About

BIOFUELS

[ chapter

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What are biofuels? hey are fuels produced from biomass (organic matter), i.e. renewable sources – vegetable matter or animal compounds. The best known sources in the world are sugar cane, corn, soya, sunflower seeds, wood and cellulose. From these sources it is possible to produce biofuels, such as ethanol and biodiesel. Biofuels are biodegradable – therefore have less impact on nature.

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Soya: raw material for biodiesel

t is energy obtained from renewable sources, i.e. sources that can renew themselves at a rate to support their use without restrictions or risk of exhausting supplies.

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What is renewable energy?

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Are biofuels and biomass the same thing?
o. Biomass is organic vegetable matter that stores energy from the sun in the form of chemical energy. It is also the quantity of living material that exists in a determined area, at a determined moment, generally expressed in units of energy or in the dry weight of nonfossil organic matter. It originates from plants (aquatic or land), forest residues and from farming (sugar cane pulp, manure), vegetable oils (buriti palm, babassu palm, castor beans, oil palm, etc.), urban waste (landfills, sewage sludge) and some industrial waste (from the timber, food and drink, paper and cellulose and grain industries). Biomass for energy purposes includes the use of these various waste products for generating alternative energy sources. Brazil is a large producer of agricultural products, which in turn generate an enormous – and continuous – quantity of biomass. In Brazil and various countries in the world, this chemical energy stored in liquid fuels is converted by industrial processes. For example, it is possible to ferment sugars from corn, wheat or sugarbeet plantations and convert them into ethanol. Or make use of vegetable oils, such as palm heart, soya, castor bean, palm oil, babassu palm, rapeseed and peanut to substitute for diesel oil as an energy source.

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Castor bean cultivation: biomass for energy purposes

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What types of biofuels for transport purposes are produced in Brazil?

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ydrous ethanol, anhydrous ethanol, biodiesel and diesel produced by the H-Bio process.

What is the current role of biofuels in the world’s energy matrix?

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ABOUT THIS NEW MARKET

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iofuels are energy sources that do not contribute to the accumulation of greenhouse gases in the atmosphere. This is their principal role in the energy matrix. As the gases generated when they are used are reabsorbed during the growing of the next harvest, there is a balance between the emission and absorption of pollutants. Additionally, biofuels that contain oxygen in their composition, such as ethanol and biodiesel, help reduce the emissions of carbon monoxide (CO) when added to fossil fuels. Reducing these emissions represents less pollution in the local atmosphere, principally in big cities.

Part of the Petrobras biodiesel laboratory

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What is the current participation of renewable energy sources in the Brazilian and world energy matrix? ccording to data from the Energy Research Company (Empresa de Pesquisa Energética – linked to the Ministry of Mines and Energy) of the Ministry of Science and Technology and the International Energy Agency (Key World Energy Statistics - 2006), the renewable energy sources – hydraulic, biomass, solar, wind and geothermal – amount to a participation of slightly more than 14% of the world energy matrix. Among the countries that make up the OECD – Organization for Economic Co-Operation and Development (The United States, Japan, Germany, France, Italy, The United Kingdom, Canada, as well as Australia, Austria, Belgium, Spain, Norway, The Netherlands, Portugal, Sweden and Switzerland), this participation is 6%. In Brazil, however, renewable energy has a much bigger presence: 45% of the country’s energy matrix. There are still no exact statistics on the participation of biofuels in the Brazilian or world energy matrix.

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Wind power

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Do biofuels represent almost half of the Brazilian energy matrix?

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o, because as well as biofuels there are other renewable energy sources being used in Brazil. For instance, the electricity generated by the hydroelectric power plants, which have a large share of the country’s energy matrix.

BRAZILIAN ENERGY MATRIX
Wood and other Biomasses 13,1% Hydroelectric 15,0% Sugar Cane 13,9% Others Renewable Sources 2,7%

Renewable 44,7%
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Coal 6,4%

Natural Gas 9,3%

WORLD ENERGY MATRIX
Uranium 6,5% Hydroelectric 2,2% Coal 23,2% Traditional Biomass 9,5% Oil 35,3%

Modern Biomass 1,7% Others 0,5% Renewable 2,2%
Source: Ministério de Minas e Energia

Natural Gas 21,1% Renewable 2,2%

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Uranium 1,2%

Oil Derivatives 38,4%

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What is the role of Petrobras in the production and distribution of biofuels?

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urrently Petrobras produces biodiesel in two pilot plants in Guamaré, in the state of Rio Grande do Norte. The company’s first three industrial scale plants will be inaugurated in 2008. Petrobras can also produce diesel oil partly originating from vegetable oils, by the H-Bio process, in the company’s refineries, and is studying the possibility of participating in projects to produce fuel ethanol for export. For national distribution, Petrobras is represented by its subsidiary Petrobras Distribuidora (BR). Another subsidiary, Transpetro, is in charge of pipeline and marine logistics.

Petrobras ethanol tanks and pipelines: production also aimed at exports

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What is the importance of CENPES in the biofuel production process?

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CENPES: Biofuels research and tests line

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ENPES, The largest energy technology center in Latin America, has for many years developed various permanent research lines and tests with biofuels. Among the research in progress, one of the highlights is, for example, H-Bio, a new technology to include vegetable oil in diesel production and an innovative process for producing biodiesel. Additionally, there is research in to producing ethanol from cellulose, tests with vehicles with new fuel formulas containing biofuels in their composition, and tests to study the effects – and the possible solutions – of spillages of these fuels on the ground.

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What are the benefits and advantages of biofuels (for the consumer, for the environment, for Brazil’s economy and for vehicles)?

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Biodiesel production chain generates new rural jobs

nlike oil and natural gas, biodiesel and ethanol are fuels produced from renewable sources. That means their production can be controlled: more can be planted, in the event of higher demand, or less at times of oversupply. Oil – in deposits found underground and undersea – is becoming ever more scarce and its price tends to rise; this factor, among others, means that biofuels became more competitive on the global energy market. According to various scientific researches, the plants used to make biofuels absorb carbon gas from the air, thereby reducing the “greenhouse effect” and, also, compensating for the carbon gas that will be emitted when the fuel is used. In relation to biodiesel, the product will generate large savings on the importation of oil and, consequently, for the country’s trade balance. In logistics and infrastructure terms, biodiesel can substitute for traditional diesel oil in the generation and supply of electricity to remote communities, which are currently dependent on mineral diesel oil generators.

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A natural and biodegradable product, which generates less emissions of carbon monoxide, particles and other pollutants.

ABOUT

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A renewable energy source, an ecological fuel using various raw materials.

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For the population, the biodiesel production chain generates an impressive number of new jobs in the countryside –planting the raw material – and, therefore helps promote social inclusion. The commercial use of biodiesel also drives the improvement of new technologies, and this accelerates the learning curve and strengthens national industry and agriculture. For the environment, the advantage can be seen in the reduction of emissions that cause the greenhouse effect: biodiesel helps preserve the environment and contributes to improving the air quality in large urban centers. For automotive vehicles, biodiesel has greater lubricity and, therefore increases the useful life of engines. With a higher flash point and cetane number, the fuel also prolongs the useful life of the exhaust system catalyzer. Additionally, it is important to point out that biodiesel is:

Greater lubrication capability and longer life for engines: advantages for the consumer

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How many vehicles are powered by biofuels in Brazil? ccording to the Brazilian Automotive Vehicle Manufacturers Association (ANFAVEA - Associação Nacional dos Fabricantes de Veículos Automotores), more than 4.2 million vehicles circulating in Brazil in September 2007, were equipped with flex fuel engines. In 2013, the number of vehicles powered by biofuels will reach 15 million.

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Gas station: number of flex fuel powered vehicles may reach 15 million in 2013

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About

BIODIESEL

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B I O F U E L S

What is biodiesel?

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iodiesel is a biodegradable fuel derived from renewable sources, which totally or partially substitutes for mineral diesel oil in diesel internal combustion engines, such as in trucks, tractors, buses and other vehicles, or in stationary engines, such as those used for generating electricity.

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Does biodiesel have the same characteristics as diesel made from oil? o, biodiesel is an ester (a product of the reaction of an acid, generally organic, with an alcohol) while diesel is an n-paraffin (or normal paraffin, a subproduct of oil processed at the refineries).

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What are the ingredients used in the production of biodiesel?

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egetable oils or animal fats, ethanol or methanol and catalysts.

What are the raw materials used in the production of biodiesel?

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Peanuts

Sunflower seeds

C OTTONSEED P EANUTS B ABASSU P ALM B URITI P ALM R APESEED P ALM
OIL SEEDS SEEDS OIL

O ILSEED
RADISH

Castor seeds

P EQUI

OIL

J ATROPHA S OYBEAN T UCUMA
WASTE PALM

Jatropha

S ESAME

S UNFLOWER J OJOBA L INSEED C ASTOR

I NDUSTRIAL
SEEDS

T ALLOW
SEEDS

OR

Soybean

ANIMAL FATS

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OIL

P ALM

KERNEL OIL

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What are the mixtures of biodiesel with diesel oil called?

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or a 2% mixture the denomination is B2 (2% biodiesel and 98% diesel oil); a 25% mixture is called B25 (25% biodiesel and 75% diesel oil); A 36% mixture is known as B36 (36% biodiesel and 64% diesel oil); and so on, including B100 (100% biodiesel).

BIODIESEL VARIANTS

B2 B25 B36 B100

2% 25% 36% 100%

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Is there a difference in performance of biodiesel powered vehicles? n the case of B5 (5% biodiesel and 95% diesel oil), for example, CENPES research proves that it is practically impossible to observe engine performance differences when compared to pure diesel oil.

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What will be the cost of biodiesel to the consumer?

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s the production of biodiesel is still low, currently its cost is high. To have the same price as diesel oil, there will need to be government incentives, large scale production and improvement of the process.

Can any vehicle use biodiesel?

o, only vehicles with diesel engines.

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egulations obligatorily establish a mixture, creating a “captive market” for biodiesel, replacing part of the diesel oil consumed in the country. It is important to remember that diesel consumption is growing, but Brazil still imports this product. Therefore, biodiesel will help to lessen Brazil’s foreign exchange expenditure.

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Will the growing use of biodiesel affect the diesel consumed and produced in Brazil?

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What is the estimate for Brazilian biodiesel production in the short, medium and long terms?

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rom January 2005 up to the end of 2007, the country will have produced approximately 840 million liters of biodiesel. From 2008 to 2012, the forecast is for a firm market of one billion liters of biodiesel B2 per year; from 2013, the demand will rise to 2.4 billion liters annually.

2400

2000

1500

MILLION LITERS

1000 840 500

2005-2007

2008-2012

2013

PRODUCTION PROSPECTS

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How is biodiesel distributed in Brazil?

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iodiesel reaches all states in Brazil by an extensive distribution network. Petrobras Distribuidora, for example, has the product on offer at all of its approximately 5,500 gas stations in the country.

Petrobras Distribuidora has approximately 5,500 gas stations throughout Brazil

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n the Petrobras Strategic Plan for 2011, the annual biodiesel production target is 885 thousand cubic meters.

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What is the projection for biodiesel production in the next years?

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What are the biodiesel auctions, how are they carried out and why?

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he public auctions of the National Petroleum, Natural Gas and Biofuels Agency (ANP - Agência Nacional do Petróleo, Gás Natural e Biocombustíveis) were created by the National Council for Energy Policy (CNPE - Conselho Nacional de Política Energética) as a method to stimulate biodiesel production in Brazil. The auctions are held by ANP itself, which accepts the best bids to sell the volumes of fuel. In the first five auctions held, Petrobras was compulsorily obliged to purchase 93% of the biodiesel auctioned, the remaining 7% went to the Alberto Pasqualini Refinary – known as REFAP.

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About

H-BIO

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B I O F U E L S

What is H-Bio?

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t is a process for producing diesel oil from vegetable oils. It consists of the hydrogenation of a gasoil stream mixed with the vegetable oil by a hydrotreatment unit (HDT).

Petrobras H-Bio process plant

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What is the difference between H-Bio and biodiesel? Are they competing?
-Bio is a process for producing diesel oil (n-paraffins), while biodiesel is a product in itself (ester). As regulations will make it obligatory to add biodiesel to diesel oil sold throughout Brazil, and as the final product of H-Bio is diesel oil itself, there is no competition between them, they are complementary.

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Is H-Bio already being used in the production of diesel oil at Petrobras refineries? he H-Bio process is used in the production of diesel oil in accordance with the refining opportunity criteria established by Petrobras. Five refineries are already adapted to use this process, and the production from the first tests was all sold on the Brazilian market.

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H-Bio: Petrobras has five refineries already adapted

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ot yet. But there is interest from other companies in importing the Petrobras H-Bio technology.

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Is H-Bio already available on the international market?

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What is Petrobras’ H-Bio production capacity?

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y the end of 2007, the company will have the capacity to produce up to 270 thousand cubic meters per year of vegetable oils. It is being distributed like any other diesel produced by Petrobras units.

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Petrobras will be able to process more than one million cubic meters of diesel oil per year with H-Bio technology

What is Petrobras’ projection for H-Bio production in the coming years? he company forecasts that, up to 2012, it will have the capacity to process 1.05 million cubic meters of diesel oil per year using H-Bio technology.

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About

ETHANOL

[ chapter four ]

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Alcohol: pure and added to gasoline

B I O F U E L S

What is ethanol?

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thanol is an alcohol, an organic oxygenated compound, also known as ethyl alcohol, and its chemical formula is C2H5OH. In Brazil ethanol is used as an automotive fuel in two forms: hydrous alcohol, for alcohol or flex fuel powered cars, and anhydrous alcohol, which is currently added to gasoline in the proportion of 25%. The difference between the two is the water content present in the product: Hydrous alcohol has around 7% water, while anhydrous alcohol has only a maximum of 0.7%.

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Are ethanol and methanol the same thing?
o. Methanol is also an alcohol, an organic oxygenated compound, but it is known as methyl alcohol and has a different chemical formula: CH3OH. However, both can be obtained from fossil sources (natural gas) or renewable sources (biomass). Methanol has greater calorific power than ethanol, but it is more reactive and, therefore, more toxic to humans – which requires more care in its handling. Another relevant difference is that the use of methanol as a fuel is being discontinued throughout the world, whereas the use of ethanol is clearly growing.

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Is ethanol production increasing in Brazil?

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Machine harvests sugar cane

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es. Between 2005 and 2006 the increase was 10.8%.

How is ethanol produced in Brazil and the world? n Brazil ethanol is produced by fermenting, with fermentation agents, the liquid extracted from sugar cane. In other parts of the world, corn, cassava and beetroot, for example, are also used as raw materials. However, in these examples the starch present in the raw material has to be transformed in to sugar before fermentation. This additional stage increases costs and reduces the quantity produced, when compared to the direct fermentation of sugar cane. After fermentation, the product passes through various stages, culminating in its distillation to remove excess water and make it suitable for use as a fuel. Latin America, part of Africa, India and Southeast Asia produce ethanol from sugar cane. Production in the United States and China is, mainly, with the use of corn. In Europe, the most common raw material is beetroot, but grapes are also used.

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How is ethanol distributed in Brazil? thanol produced by the plants is acquired by the fuel distributors and taken to their distribution bases, from where it is sold to gas stations in a pure state (hydrous alcohol) or mixed with gasoline (anhydrous alcohol). Transport is normally by road, although in some cases railways or pipelines are used.

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Petrobras’ ethanol tanks

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How many liters of ethanol are consumed in Brazil and how many liters are exported to other regions? n 2006, Brazil produced 17.7 billion liters of ethanol (hydrous and anhydrous) and exported 3.3 billion liters. Of the amount that remained in Brazil, around one billion liters were used for industrial and food purposes; a little over 13 billion liters were used effectively as automotive fuel.

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What are the official projections for ethanol production in the coming years?

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Brazil will double its ethanol production by 2015

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ccording to the Ministry of Agriculture, Husbandry and Supply, Brazil will reach a production level of around 37 million cubic meters in 2015, more than double current production.

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How much will be invested in ethanol production in the medium and long terms?

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ccording to the Sugar Cane Agroindustry Union (UNICA - União da Indústria de Cana-de-Açúcar), investments in new mills and enlarging alcohol plants in the next five years will total more than R$ 17 billion.

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Alcohol plant: there may be 410 units in Brazil by 2012

How many alcohol plants are operating in Brazil? here are currently 336 units. The forecast is that by the 2012/2013 harvest there will be more than 410 plants in operation.

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Is it possible to produce ethanol from other sources? es. It is technically possible to produce ethanol from cellulose on an industrial scale. The main restraint is its cost, still high, but developed countries have invested large sums in new technology to reduce the cost.

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Ethanol: occupies only 3.3% of Brazil's agricultural area

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he Amazon region is not suitable for producing sugar cane. In fact the new ethanol frontiers are still a long way from there, so far sugar cane occupies extensive agricultural or scrub land areas in the SouthCentral region of the country. To double current production of ethanol, Brazil requires three million hectares, that is, only 3.3% of its agricultural area. Brazil already has 90 million hectares of agricultural land and this total, obviously, does not include the Amazon, the Pantanal and native forests.

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Is the use of agricultural land for growing sugar cane a threat to the land in the Amazonian region?

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Estimates show that in 2010 a volume of seven billion liters of ethanol will be exported

What are the prospects for exporting Brazilian ethanol? enerally, the prospects for exporting ethanol are very positive – although it depends on the speed at which the international market develops. In 2010, according to the Ministry of Development, Industry and Trade, Brazil will export around 7 billion liters of the fuel.

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Social, environmental, economic and regulatory aspects

[ chapter five ]

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Which bodies regulate and inspect the biofuel market in Brazil? he Ministry of Agriculture, Husbandry and Supply is responsible for monitoring agricultural production and for regulating industrial production, using the plants and distilleries register. Those registered with the National Petroleum, Natural Gas and Biofuels Agency (ANP) can sell the fuel to the distributors – which in turn are also regulated by the ANP.

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Sugar cane plant

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What are Petrobras’ targets for the biofuels market in the coming years?

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n its Strategic Plan, the company, has a target to be the largest biodiesel producer in Brazil by 2011, and intends to act selectively in the ethanol value chain and to increase it exports of this product to 3.5 billion liters annually.

Are biofuels competitors for fossil fuels?
o. The future for biofuels is to be used as additives and to complement fossil fuels. Some countries, such as Brazil, already add ethanol to its gasoline, and biodiesel to diesel oil, not only as a way to minimize air pollution, but also to improve fuel quality.

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How do biofuels contribute to reducing global warming?

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s biofuels represent renewable energy sources, the gases generated in their use are reabsorbed during the growing of the next harvest, there is a balance between the emission and absorption of greenhouse gases in the atmosphere. Additionally, biofuels that contain oxygen in their composition, such as ethanol and biodiesel, help reduce the emissions of CO2 when added to fossil fuels.

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As well as producing energy can biofuels be used for producing other materials? here already exists a very well developed chemical alcohol technology for producing substitutes for petrochemical products – such as for ethane alcohol and biodegradable plastics, among others. The strongest existing barrier against its large scale adoption is the price, generally higher than oil derivatives.

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Technology allows plastic to be produced from ethanol

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How do biofuels contribute to generating employment and distributing income in Brazil? he construction of new sugar cane and biodiesel plants generate direct and indirect jobs and contribute to keeping workers in the rural areas. The workers can obtain an income from agriculture, which reduces the exodus from the countryside.

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Castor seeds industry creates more direct and indirect jobs
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49

Does the biofuel program prejudice the supply of food when it uses agricultural land for producing ethanol and biodiesel? here is no truth in the argument that there is a shortage of food in the world or, in particular in Brazil; what is missing is income for the poorer members of the population to buy the food which, often, is destroyed by the producer or left unharvested, due to low market prices. With the expansion of the biofuels industry, new jobs will naturally be created and, consequently, income generated for the worker to sustain his family. In Brazil, areas previously not used for agriculture, or not adequate for growing food crops due to low rainfall levels, are those most used for the expansion of the process of growing the raw materials for producing biofuels. This is the case in large regions of the dry Northeast, in which, despite the lack of rain, some oilseed plants manage to produce their fruit.

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Biofuel industry generates more income for workers and their families

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How can the export of biofuels stimulate the Brazilian economy?

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grobusiness has contributed very positively to Brazil’s large trade balance. This market earns Brazil foreign exchange and, particularly in the case of biofuels, attracts direct, long-term investments to the interior of the country. This in turn, promotes continuing rural employment and economic and social development of urban areas, as well as generating thousands of jobs in the base industries that support this activity in Brazil and, increasingly more, also abroad.
Cultivation of oilseed plants, such as castor beans, helping to keep workers in rural areas

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Sources

Petróleo Brasileiro S.A. – Petrobras Ministério de Minas e Energia Ministério da Agricultura, Pecuária e Abastecimento Ministério de Ciência e Tecnologia Ministério do Desenvolvimento, Indústria e Comércio Empresa de Pesquisa Energética – EPE/MME Empresa Brasileira de Pesquisa Agropecuária – Embrapa União da Indústria de Cana-de-Açúcar – Unica Sindicato Nacional das Empresas Distribuidoras de Combustíveis e de Lubrificantes – Sindicom F.O. Licht IDB-OMC Icone The Economist Toepfer Institute Associação Nacional dos Fabricantes de Veículos Automotores – Anfavea International Energy Agency [Key World Energy Statistics/2006]

Editorial Board

This booklet is produced by Institutional Communications of the Petrobras Supply Division
DITORIAL PROJECT, RESEARCH AND EDITION:

Newsday Consultoria de Comunicação e Marketing
GRAPHIC PROJECT:

Mello & Mayer Design
PHOTOS:

Petrobras' images database
PRINT:

Setprint Gráfica e Editora Printed on recycled paper

Final edition date: 09/30/07

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50 QUESTIONS AND ANSWERS
ABOUT THIS NEW MARKET