Tuesday 6 April 2010

Worried about sustainability? Get a Brazilian

Given the ongoing debate over the sustainability of biofuels, I was keen to hear for myself the story that is the Brazilian ethanol economy. Hence, Abchapess finds herself at the “Brazilian Cleantech Breakfast” on the 11th March in Rosenblatt’s offices mulling over how to both communicate and eat a bowl cereal while holding a cup of coffee, a handful of business cards as well as managing the usual female trappings of handbag and coat in a room the size of a two man tent containing a not inconsiderable number of overly familiar Brazilians and excited greenies. Despite the general melee, the crowd finally managed to squeeze itself into the limited chairs to the clutter of breaking plates and falling cutlery at which point the speakers had their opportunity to sell the class-leading benefits of the renewable energy market in Brazil.

For those who aren’t aware of the powerhouse that Brazil is in the alternative fuel world here are a few facts. The first car to ever run on ethanol was produced in Brazil in 1979 having been experimenting with the liquid since the 1930’s. This legacy has resulted in Brazil now consuming more ethanol than petrol. Moreover, around 45% of all energy produced in Brazil comes from renewable sources. Unsurprisingly, a number of entrepreneurs, small companies and multinational corporations have been jumping onto the Brazilian bandwagon over the last few years.

The Energy Revolution
Paolo Wrobel, of the Brazilian embassy, kicked off the proceedings by setting the scene for the energy revolution that is happening in Brazil. Huge revenues of oil and gas have been discovered off the coast of Brazil, in particular natural gas. This relatively clean and abundant resource allows for a number of opportunities for British companies to provide anything from services to machinery. On their biofuels strategy, the market has been boosted by the Environmental Protection Agency classifying ethanol from sugarcane, an area in which Brazil is world leader, as an “exceptional fuel”. This is due to the complete avoidance of “food vs fuel” and the fact that nothing is wasted. The leftover bagasse is used to produce electricity which powers the plant, even providing excess electricity for the grid. Most importantly sugarcane from ethanol is easily scalable and competes very favourably in financial terms with fossil fuels. A no-brainer it seems.

Up to the Challenge?
The final word at the Breakfast was left to Olivier Mace Head of Biofuel Strategy and Regulatory Affairs at BP. As a global fossil fuel giant, BP’s commitment to dedicating time and money to renewable energy has been impressive. They see two big challenges facing them: energy security (we will double our primary energy requirements by 2050) and climate change. Nothing new there. He discussed four criteria for biofuels which would allow them to compete with traditional fossil fuels in transport; cost, low carbon, sustainability and scalability. If biofuels could beat other types of fuels, including fossil fuels, in all four categories, it would be one of the only viable options for mass market use; the other of course being electric vehicles. His personal opinion (obviously) was that the most economically sensible option would be the combination of energy efficient internal combustion engines with the use of low carbon fuels. Working to that belief, BP Biofuels invested in Brazil’s sugarcane ethanol market in 2008 through acquiring 50% of an integrated facility, consisting of an ethanol production factory on a sugar cane estate. Brazil has attracted a number of other international investors similar to BP in the recent years, including Shell which has recently announced its intention to tap into a market which was once dominated by wealthy local families.

The conclusion that can be drawn from this may seem surprising. First generation biofuels may actually negate the need for second generation biofuels in much of the world. In fact many methods are well established, hence low-risk technologies, non-competitive with food crops and applicable on an industrial scale. We have to bear in mind however, that sadly the British climate and environment is not comparable to Brazil’s. We are in fact 35 times smaller and considerably wetter meaning the requirement to invest in second generation methods such as using municipal waste as a feedstock is crucial if we are to secure our own ongoing fuel supply.


Photo courtesy of ozjimbob on Flickr, through a Creative Commons License
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