INTRO
Bioethanol is the most commonly used biofuel to substitute for gasoline. It can be combined with gasoline in any concentration up to pure ethanol (E100). The two most widely used crops for ethanol production are sugarcane and maize. Sugarcane is the main feedstock in Brazil, while the latter in the US. Brazil is the world market leader in ethanol production. The letter ‘E’ is used for fuels which contain ethanol. For example, the term E85 is used to designate a mixture of 85 percent ethanol and 15 percent gasoline.
Production
Ethanol is manufactured from microbial conversion of biomass materials through fermentation. Ethanol contains 35 percent oxygen. The production process consists of conversion of biomass to fermentable sugars, fermentation of sugars to ethanol, and the separation and purification of the ethanol. Fermentation initially produces ethanol containing a substantial amount of water. Distillation removes the majority of water to yield about 95 percent purity ethanol, the balance being water.
Use
Brazil is the biggest producer of bio-ethanol in the world. Between 1975 and 2004, the ethanol program in Brazil substituted about 230 billion liters of gasoline (Nastari 2005a). The Center-South region of Brazil is the lowest-cost sugarcane-producing area in the world.
Ethanol in Europe is produced from sugar beets and wheat, both of which are much more expensive than sugarcane-derived ethanol. In 2003, bioethanol production reached 370 million liters. The corresponding figure in EU-25 in 2003 was 570 million liters. Both
France and Spain have established fuel ethanol industries where ethanol is not used directly but is transformed into ETBE. In 2003, the largest consumers were Spain at 200 million liters, Sweden at 180 million, and France at 100 million. Sweden uses ethanol in both E5 and E85. Poland was closely behind, producing and consuming 80 million liters of bioethanol. The German parliament has exempted all biofuels for heating and transport purposes from the mineral oil tax (till end of 2006). The tax exemption for ethanol, amounting to €0.655 per liter, is substantially larger than those in the Americas and is among the highest in the world (Corre 2004). In contrast, the French Assemblée Générale in 2003 voted to reduce the tax relief from €0.502 to €0.38 per liter (Automotive Environment Analyst 2003a).
Among the three largest consumers, Spain and Sweden grant a 100 percent exemption from gasoline tax to ethanol today, and France 63 and 65 percent exemption (Corre 2004).
Costs
Ethanol from sugarcane grown in the Center-South region of Brazil is by far the cheapest biofuel today. The financial cost of ethanol production in Brazil is estimated to be in the range of US$0.23-0.29 per liter at the exchange rate prevailing in mid-2005 (R$2.40 = US$1.00), with the range largely reflecting the difference in sugar production costs in different regions. Depending on the impact of substituting gasoline with ethanol on vehicle fuel economy, these are equivalent to gasoline prices when crude oil is between US$35 and $50 per barrel. For comparison, during the first eight months of 2005, the OPEC (Organization of Petroleum Exporting Countries) basket price averaged $49 per barrel. The costs of ethanol production in other countries, or using other feedstocks, are significantly higher than from sugarcane in Brazil.
In the European Union, according to one estimate, ethanol production costs range from €0.36 to €0.48 per liter if the feedstock is wheat, and from €0.42 to 0.54 per liter if the feedstock is sugar beet (Enguídanos and others 2002). These cost figures are considerably higher than ethanol production in Brazil or the United States. The production costs in the new Member States are comparably high. A 2003 EU report quotes ethanol production costs of €0.36 per liter in Bulgaria, €0.56-0.57 in the Baltics, and €0.60 per liter in Poland (Kovalov and others 2003).
SUPPLY of Vehicles
The following flexi fuel cars are available on the European market today:
Ford: Focus, C-Max, S-max, Mondeo, Galaxy
Volvo: S40, V50 and C30, S80, V70
Saab: 9-5, 9-3
Reault: Megane
Peugot: 307 Bioflex
Skoda: Oktavia Flexifuel (1.6)
Volkswagen: Golf 1.6
Audi A3, A4, Seat Leon and Altea, Citroen C4 and C5 and many more!
see: www.miljofordon.se
Number of buses running on ethanol, ethanol for diesel engines E95
Stockholm (Sweden) 400 buses
Madrid (Spain) 5 buses.
La Spezia (I) 3 buses
Slupsk (Poland) 5 buses
London (UK) 1 bus
Reading (UK) 10 double deckers
Oslo (N) 15 buses
Milan (I) 5 buses
ENVIRONMENTAL BENEFITS
Ethanol is a renewable, environmentally friendly fuel that is inherently cleaner than gasoline. Using ethanol reduces emissions of carbon monoxide, particulate matter, oxides of nitrogen, and other ozone-forming pollutants. Ethanol blended fuel can reduce carbon monoxide emissions by as much as 25 percent and greenhouse gas emissions by as much as 35-45 percent.
ADVANTAGES:
1. Reduced Green House Gases Emissions.
2. It helps to reduce the exhaust emissions of carbon monoxide (CO) and
hydrocarbons, especially in cold climate.
3. Aiding rural development
4. Increasing jobs in the feedstock sector
DISADVANTAGES:
1. One of the main fears of using biofuels, is the competition with food production (this will decrease with cellulose based ethanol production)
2. This is related to the second problem. Clearance of new land often involves burning which can result in a very large emission of carbon dioxide. This may lead to environmental damage such as deforestation or decline of soil fertility due to reduction of organic matter.
3. A further disadvantage of using ethanol, just as most biofuels is their cost of production. As mentioned previously, apart from Brazil, the world still cannot offer cheap production of ethanol. Production from cellulose will make the ethanol cheaper.
4. Large water requirements.
COUNTRY SPECIFIC INFORMATION
Spain and Sweden are the two biggest ethanol producers in the EU.
Spain
The success of ethanol production in Spain can be explained by the fact that the government does not collect any tax on ethanol. In addition there is an increasing number of plant projects and there is currently a new plant being built that will be operational in 2005. The production capacity of this plant will be 200 million liters per year. The most extended feedstocks for producing Bioethanol in Spain are cereals, mainly wheat and barley.
Spain is the first bioethanol-producing in the EU, with a total productive capacity of 415.000 t/year, divided in 3 production plants.
In 2005, the total production of bioethanol in Spain was estimated about 257.000 t/year, which is less than total production capacity, because one of the three existing plants started to operate at the end of the year.
The major part of the bioethanol produced in Spain is used in ETBE production which is used like additive in petrol.
Sweden
In Sweden ethanol is used as low-blend (5%) in cenventional petrol and high-blend (85%) in flexi fuel vehicles. More ethanol is being used than produced, and there are significant imports. According to the Swedish Energy Agency, the high price on oil and the Swedish tax exemption on ethanol have resulted in that basically all the petrol in Sweden now has a blend of 5 percent ethanol. There are two industrial production plants in Sweden, one uses cereals for the production and the other one uses waste from paper production.
In the 2005 budget decision, the Swedish Parliament set the indicative target for the use of biofuels and other renewable fuels in Sweden. From 2005 onwards, these fuels must make up at least 3% of total petrol and diesel consumption for transport operations, calculated on the basis of energy content.
By the Swedish Parliament’s decision of 16 December 2005, the national target for 2010 has accordingly been set at 5.75 %.
According to the taxation strategy for alternative fuels, exemption from energy tax and carbon dioxide tax is granted for bio-based ethanol when used as a motor fuel.
The best-known crop for heating purposes in Sweden today is Salix. Other crops which nowadays are interesting for energy recovery are straw, grain, hemp and reed canary grass (herbage strain). Oats in particular have been identified as an appropriate energy crop.
In 2005 ethanol accounted for almost 87% of biofuel use, calculated in terms of energy volume. Most bioethanol, around 90%, is used for admixing with petrol, but the volumes used in pure or almost pure form are also increasing. In Sweden ethanol is produced from grain by Agroetanol and from byproducts of paper pulp production by SEKAB in Örnsköldsvik.
During 2005, the number of registered private cars that can be operated using biofuels as a first or second fuel has increased greatly. The sharp increase in imported ethanol already noted in 2003 and 2004 has continued. Imported ethanol constitutes about four-fifths of Sweden’s total use of ethanol in fuels and in 2005 came mainly in the form of sugar-cane ethanol from Brazil. The price of the imported ethanol is between SEK 3-5 including customs duties. The cost of Swedish production, which is based on cereals, is reported to be about SEK 5 per litre.
There were 110 000 Flexible Fuel Vehicles that can run on petrol or E85 in the mid 2008, a sharp increase compared to 2004 when there were 13 300 vehicles.
The number of buses powered by ethanol now totals 500. In 2005, 166 public filling stations for ethanol E85 were created, bringing the total to 297 at the end of the year. In mid 2008 the number is 1100 (the total number of fuel stations are 4000 in Sweden). In 2007 all fuel stations selling more than 2000 m3 and in 2008 all points selling more than 1000 m3 have to offer a renewable fuel.
Poland
The bioethanol sector in Poland, unlike the other CEEC is developed in a significant way. This is probably due to the law on tax exemption for production of ethanol mixed with petrol that was taken in November 2003. The definitive percentages and the size of this exemption are determined on a yearly basis after approval of the annual budget.
Poland together with Spain, France, Sweden and Czech are the main EU countries producing bioethanol. The use of bioethanol as a direct blend in petrol is increasing in Poland. At present, France, Spain and Poland convert most or all their bioethanol production into ETBE, while Sweden and the Czech Republic use their bioethanol production directly. Although bioethanol production is already developed in Poland, until 2004 practically no commercial-scale production of esters was started up. Poland has adopted both EU Directives and has taken measures in order to promote the use of biofuels or other renewable fuels to replace diesel or petrol for transport purposes. Among these measures are tax exceptions and tax relief, as well as financial support for research programmes. According to the Polish Law on biocomponents used in liquid fuels and liquid biofuels, the following biocomponents qualify for exemption from excise duty: bioethanol, including bioethanol contained in ethyl tertiary butyl ether or in tertiary amyl ethyl ether, as well as methyl esters or ethyl esters of all fatty acids obtained from processing oilseed rape or by-products and wastes. The exemption applies to biocomponents intended for use in liquid fuels and liquid biofuels produced from agricultural raw materials, by-products and waste meeting the relevant quality requirements. The polish Law also lays down rules governing exemption from excise duty for liquid fuels containing a specified level of biocomponents.
Number of registered undertakings producing or storing biocomponents
- 27 undertakings producing and storing bioethanol (including 7 undertakings only storing bioethanol); 20 registered undertakings declared annual bioethanol production capacity totaling 618.00 million litres (487.60 thousand tonnes),
- 63 undertakings producing and storing esters (including 18 undertakings only storing esters); 45 registered undertakings declared annual ester production capacity totalling
528.13 million litres (464.75 thousand tonnes), 5 undertakings registered storage of both bioethanol and esters.
Bioethanol production
In 2005 around 54.2 million litres (42.8 thousand tonnes) of bioethanol were placed on the fuel market. Petrol consumption decreased by nearly 400 millions litre compared with the previous year.
Austria
There is currently no large-scale production of bioethanol in Austria. A plant is being built at the moment and will probably produce some 160 000 tonnes a year from October 2007.
Germany
Bioethanol has replaced methanol in the manufacture of the octane enhancer MTBE but is used as a direct additive only in limited quantities.
Since August 2005 some motor manufacturers have been offering flexible fuel vehicles. These can run on bioethanol and petrol in any mixture ratio. E85 in particular is used. So far, however, there are only a few filling stations where cars can be refuelled with E85. The further development of E85 depends in particular on how the funding conditions for this fuel turn out in the future.
Greece
At present bioethanol is produced or imported only for the preparation of alcoholic beverages, and not for use as automotive fuel. Regarding the production of bioethanol there is currently a discussion by the Hellenic Sugar Industry S.A. to convert 2 of its already existing units (in Xanthi and Larissa) to bioethanol production plants. However, the introduction of bioethanol to the Hellenic fuel market is not expected to start before the second half of 2007 at the earliest.
France
Certain tax exemptions are in force in France. These tax exemptions apply to certain maximum volumes of biofuels and are also adjusted each year. For 2004 the maximum volumes were 12,000 tonnes of bioethanol.
Bulgaria
At the moment in Bulgaria there are only experimental and pilot facilities for bioethanol production. A big Bulgarian company plans to built a refinery for bioetanol production in the town of Varna.
There is no refuelling stations with bioethanol or bioetanol mixture with gasoline in Bulgaria.
There is no stimulating laws in Bulgaria for the production of bioethanol.There is only permission for the use of 5 % of biofuels as additives to conventional fuels.
The United Kingdom
A duty differential for bioethanol was introduced in January 2005. These duty differentials will now continue until 2008, consistent with the UK Government's commitment under the Alternative Fuels Framework to provide 3 year rolling certainty on duty differentials.
Hungary
Hungary is unable to sell the exorbitant amount of corn produced each year (Hungary was filling more than 30% of the EU's intervention quota alone). There are not enough processing facilities, but a lot of investments (worth more than 1.7 billion USD last year) have been announced, so this will change soon.
For the production of 1000 liters of bioethanol, 2.6-2.9 tons of crops is needed.
There are two major ethanol production plants, at Győr and at Szabadegyháza. Their combined annual capacity is 60 million liters, of which only 47 was put to use in recent years.
Crop Yield (ethanol l/ha)
Sugar cane 600
Sugar beet 700
Sweet potato 3300
Corn 1200-1700
Sweet sorghum 2500-7000
(Information provided by Gabor Szendro, BUTE Dept. of Environmental Economics)
Portugal
Bioethanol is not being used in Portugal , yet. However, GALP-Energia intends to start blending it with gasoline up to 5% in the next few months.
Slovenia
Not available in Slovenia. There was an initiative for bioethanol production but was abandoned after the financial study proved it wouldn’t be cost effective.
Further reading
Cleanairnet info pool
Educational Curriculum
Ethanol as aviation fuel
All about ethanol buses
BioEthanol for Sustainable Transport, BEST
E20 testing results
BioAlcohol Fuel Foundation
Ethanol fuel producer
Brazil’s ethanol success story
A series of advantages make Brazil the worldwide leader of energy agriculture and the bioenergy market - the biomarket. The first advantage is the possibility of earmarking new lands to energy farming without having to reduce the food-crop farmed area or impose environmental impacts beyond what is socially acceptable. In addition, in many areas of the country it is possible to harvest several times a year without irrigation. With irrigation, the number of harvests increases considerably.
Brazil's location in the tropical and subtropical zones of the world ensures intense solar radiation year-round, the basis of bioenergy production. In addition, the country is blessed with a wide range of climates and an exuberant biodiversity, as well as one-fourth the world's fresh water reserves.
The environmental pressures to replace fossil fuels as the main source of energy will drive the demand for agroenergy. Atmospheric CO2 concentrations in the atmosphere have increased by 31% in the last 250 years. Fossil fuel burning and cement production account for 75% of carbon emissions.
Brazil's comparative advantages enable the country to seek a leading role in the international biofuel market and promote energy products derived from agroenergy. An expansion of exports would bring in hard currency, consolidate the agroenergy sector and provide an added thrust to the development of the country.
The reasons for success in the international biofuel market:
a) Petroleum prices are rising and the petroleum market is prone to uncertainties.
b) The world has become increasingly concerned with the environment, particularly after the Kyoto Protocol went into effect.
c) In view of the increased petroleum prices and the systematic depletion of petroleum reserves, the countries are emphasizing the need to diminish dependency on petroleum in their energy matrixes.
Around 80 percent of Brazil’s ethanol production is used as fuel, whereas 5 percent is used in food industry, perfumes and ethanol-derived chemicals, and 15 percent is exported.
For the 2006/07 crop, approximately 14 billion liters were consumed in the domestic market, and 3.5 billion liters in export markets, more than half of worldwide markets. In Brazil, fuel ethanol replaces over 40 percent of the gasoline that would otherwise be used. By 2013 consumption in Brazil is expected to double. Global ethanol trade could rise 25-fold by 2020.
Sugarcane
Sugarcane plantations in Brazil spread over almost 6-million hectares, of which 85% are located in the Center-South, particularly in the State of São Paulo (60%), and the remaining 15%, in the North and Northeast Regions.
Approximately 380-million tons were milled in the 2004 harvest, and about 48% of them were used for alcohol production. The Brazilian sugar and ethanol industry is a processor of the agricultural product that is sugar-cane. Sugar-cane is a type of grass that, once matured, has a great content of sugars (approximately 1/3 of the dry stalk matter). Sugar-cane is a semi-perennial crop, as it can be harvested with no need for replanting from 5 to 7 harvesting seasons (i.e. 5 to 7 years). Following that period, a rotation can be made by growing a different crop in the land for one crop period (peanuts, for example), whereupon sugar-cane growing is resumed. In Brazil’s Center-South region, the sugar-cane harvesting period extends for 8 months, on average, commencing in April and ending in November. Once it is harvested, sugar-cane cannot be stored; it must be received at the industrial plant within no longer than 72 hours of its harvesting in order to avoid quality losses due to the action of bacteria and yeasts. Sugar-cane harvested more than 5 days earlier is usually not accepted by the plants. For this reason, ethanol is produced from sugarcane during only 8 months of the year, when sugar-cane is available. For the other 4 months, the plant stops and undergoes maintenance procedures.
Since the demand for sugar and ethanol is constant during the 12 months of the year, the amount of ethanol produced during the 8 crop months must be sufficient to supply the market with the fuel all through the year (leading to storage costs).
The National Alcohol Program (PROÁLCOOL)
The National Alcohol Program (PROÁLCOOL) was created by a Presidential
Decree in late 1975, “aiming to meet the requirements of the domestic and international markets, as well as those of the fuel policy for automotive fuels.”
PROÁLCOOL’s driver was an incentive to produce ethanol from sugar-cane, cassava or any other raw material. It is important to point out that Brazil had been gaining experience with the use of ethanol as a fuel since the 1920’s. The basis for the program was an increase in supply: that increase would be stimulated by a greater supply of raw materials, with special emphasis on the expansion of agricultural production, the modernization and expansion of existing distilleries, and the establishment of new production units, which were either independent or annexes to existing facilities and storage units.
The main motivation for the launch of the program was the strong adverse impact of the two “oil shocks”, in 1973 and 1978, on the country’s economy. As a result of the incentives initially provided by the National Alcohol Program, Brazil’s ethanol production increased from 555 million liters in 1975/76 to 17.5 billion liters for the 2006/07 crop.
However, in the 1990’s, the PROÁLCOOL programme ended with a hangover, as oil prices fell and cane growers switched back from ethanol to sugar, infuriating drivers of ethanol-only cars. However, this established system for distributing ethanol to petrol stations suddenly looks like a national treasure, thanks to a recent development- the flex fuel cars.
Flex fuel cars
With higher prices and higher tax load on fossil fuels, alcohol was once again attractive and, consequently, the automobile industry began investing in a new technological standard: the bi-fuel or dual fuel, alcohol-gasoline car, also called by the North American expression, flex fuel.
The refueling flexibility of these vehicles, which have practically eliminated the risk of running out of fuel, combined with attractive alcohol prices has redirected the market: first released in March 2003, approximately 850,000 dual fuel vehicles were circulating in Brazil by late 2005. Six automobile manufacturers installed in the country offer 52 different models. These numbers predict the dawn of a new era in which multi-fuel vehicles will dominate the market almost absolutely, and this should favor enormously the consumption of biofuels.
Can ethanol production lead to difficulties in food production?
With an 850 million hectares (ha) area, Brazil has a large fraction of its territory with the conditions to economically sustain the agricultural production, while maintaining vast forest areas with different biomes. Today, farming areas amount to 60 million ha (just about 7 percent of the territory, 21 million ha of which taken up by soybean crops, and 12 million ha by corn). “Pasture” areas correspond to around 227 million ha, including a portion displaying a certain level of degradation; forest areas (including commercial wood production) total 464 million ha. Estimates by EMBRAPA indicate that there are still 100 million hectares that can support the growing of annual-cycle species. Additionally, an area equivalent to 20 million hectares is expected to be freed up thanks to technological improvements in cattle breeding. The area currently covered with sugar-cane crops represent only 0.6 percent of the country’s territory (0.3 percent for ethanol, which substitutes for 40 percent of the gasoline that would otherwise be used as it is). Therefore, in the case of Brazil there is no conflict between land used for food (of which Brazil is a major exporter) and energy.
The expansion of sugar-cane growing over the past 25 years essentially took place in Brazil’s Center-South region, in areas far away from the current biomes of the Amazon Rain Forest, the Atlantic Forest and the Pantanal. From 1992 until 2003, almost all of the expansion (94 percent) in the Center-South region occurred in existing units; new farming frontiers were involved to a much lesser extent. In São Paulo, the expansion has been based on the replacement of other crops and pastures. Today as well as over the next few years, the expansion will continue to take place in the Center-South region, with an emphasis on the West of São Paulo, in the regions near the state line of Mato Grosso, and some areas in the State of Goiás; and mostly in areas of degraded pastures or fields. In the past, those areas occupied part (over the years, since the discovery of Brazil and, most certainly, much earlier than the introduction of PROÁLCOOL) of the Atlantic Forest and
Savannahs. No expansion to any forest areas or protected biomes is considered, especially because the legislation in force would not allow that to happen.
Sugar cane employment
The sugar-cane industry employs 6 percent of all Brazilian workers in the agribusiness as accounts for 35 percent of São Paulo state’s GDP and rural jobs. Brazil’s sugar-cane growing business is responsible for around one million direct jobs (765,000 direct, formal jobs, RAIS 2002); around 520,000 people were employed in sugar-cane growing alone in 2002 (PNAD, 2003).
Sources: the report of the Ministry of Agriculture, Livestock and Food Supply of Brazil; The Economist; UNECA, the sugar cane industry union of Brazil.
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