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INSTITUTE FOR SUSTAINABLE FUTURES

Biofuel Production:

INSTITUTE FOR SUSTAINABLE FUTURES Biofuel Production: THINK. CHANGE. DO considerations from Brazil

THINK.

CHANGE.

DO

considerations from Brazil

INSTITUTE FOR SUSTAINABLE FUTURES Biofuel Production: THINK. CHANGE. DO considerations from Brazil

Biofuels- transforming Timor-Leste?

Timor-Leste may soon need to

confront issues

associated with biofuel production

need to confront issues associated with biofuel production Photo: Road in Covalima District (Sarina Kilham )

Photo: Road in Covalima District (Sarina Kilham)

appropriate time to reflect on the global scene for biofuels

Biofuel Overview

Biofuels: liquid or gaseous fuels derived

from organic matter such as plant material

or animal waste.

Also known as agrofuels, reflecting the

current situation where the majority of

biofuel is produced from agricultural commodities

Ethanol and biodiesel

Ethanol

liquid fuel generated from converting bio-mass into sugar and then fermenting the sugar

Common feedstock is sugar cane or corn

Most widely used and traded

internationally

USA and Brazil biggest

producers and consumers

Biodiesel

biodiesel is produced from organically-derived oils or fats

Common feedstock is soy bean, palm oil, jatropha

Limited international trade

Indonesia and Malaysia biggest producers, EU biggest

consumer

World Biofuel consumption projection

World Biofuel consumption projection International Energy Agency World Energy Outlook 2008 p172

International Energy Agency World Energy Outlook 2008

p172

191 million people

Producing

since 1970s

Biggest

consumer

until 2004

Brazil

million people Producing since 1970s Biggest consumer until 2004 Brazil Photo Source: http://news.mongabay.com/bioenergy /

Photo Source: http://news.mongabay.com/bioenergy/

1975- ‘PROALCOOL’ - Promoted production and domestic consumption of ethanol by policy measures

Quotas

subsidies to bioethanol producers

fixed purchasing price

government control

distribution by monopolistic agent (Petrobras)

installation of bioethanol bowsers at every Petrobras Fuel Station

tax incentives for car owners

soft loans

• installation of bioethanol bowsers at every Petrobras Fuel Station • tax incentives for car owners

‘PROALCOOL’ in 2009

Liberalised but policy measures remain

(e.g. Mandated 20-25% mix, FFV) Industry is thriving and Brazilian remains the world’s largest exporter BUT

development and benefits have

remains the world’s largest exporter BUT • development and benefits have not been uniform across the

not been uniform across the nation

2005-‘PROBIODIESEL’

2005- ‘PROBIODIESEL’ Small farmers Regional development Images from Biofuel Watch Center and Government of Brazil

Small farmers

2005- ‘PROBIODIESEL’ Small farmers Regional development Images from Biofuel Watch Center and Government of Brazil

Regional

development

Images from Biofuel Watch Center and Government of Brazil

Small farmers Regional development Images from Biofuel Watch Center and Government of Brazil positive environmental impact

positive

environmental

impact

PROBIODIESEL

PROBIODIESEL Social Fuel Stamp Aims to promote social inclusion. Producers receive ‘stamp’ when they meet minimum

Social Fuel Stamp

PROBIODIESEL Social Fuel Stamp Aims to promote social inclusion. Producers receive ‘stamp’ when they meet minimum

Aims to promote social inclusion. Producers receive ‘stamp’ when they

meet minimum social inclusion criteria. Industrial producer must:

purchase a minimum percentage of feedstock from family farmers

located at different geographical points in Brazil

enter into a legally binding agreement with family farmers to establish specific income levels and deadlines and conditions of delivery of feedstock

guarantee technical assistance and training

Challenges

Costs for the technical assistance are often

higher than Social Fuel Stamp tax exemptions

operational costs of managing thousands of

contracts with geographically dispersed small

farmers was difficult.

Research is showing patterns of biodiesel production and processing are similar to that of

ethanol, despite policy measures

Global Policy context

The biggest producers and users of biofuels at a global

level are interested in quite different aspects of biofuels (e.g. Some for climate change mitigation, some for political influence)

multilateral rules that govern biofuels are neither unified nor consistent- bioethanol and biodiesel are classified

differently under World Trade Organisation rules

Ethanol and biodiesel are subject to very different permitted tariff and subsidy rules (more refined = higher tariff).

Governance of Biofuel is complex

In Brazil, at least 6 of 24 government Ministries

involved:

Ministry of Agriculture, Livestock and Supply: responsible for large-scale industrial farming and the development of

agricultural technologies

Ministry of Science & Technology: supports research in advanced agricultural technologies such as biotechnology

Ministry of Development, Industry & Trade: export development

Ministry of Mines and Energy: supports the development of biofuels

Ministry of Agrarian Development: responsible for small scale, family and subsistence farming and social inclusion issues.

Ministry of Social Development & the Fight against Hunger: has a poverty reduction mandate

Policy in Timor will also involve several Ministries

the road ahead for Timor

Demand: big BUT the global context is changing

Timor-Leste would be ‘price-taker’

Benefits: possible benefits for rural development

if focused on local consumption; needs

Policy:

to be part of a diverse farming system

social + environmental + economic

Specific measures to address equity.

Government needs to be involved

farming system social + environmental + economic Specific measures to address equity. Government needs to be

Sarina Kilham

Thank You

Institute for Sustainable Futures

www.isf.uts.edu.au

Thank You Institute for Sustainable Futures www.isf.uts.edu.au 96091436@uts.edu.au Skype: sarinakilham Tlp: 745 9909

Skype: sarinakilham

Tlp: 745 9909