Sugarcane Harvest in Brazil up by 25% with Plenty of Food and Fuel.

The Sugarcane Blog, 15/07/09.

The Brazilian Sugarcane Industry Association (UNICA) just released their bi-monthly sugarcane harvest update for Brazil’s center-south region, which represents 90% of the country’s production, which is turn is about 20% of global sugar production. According to UNICA’s press release, during the 2009/10 (April-March) harvest, sugarcane crush totaled 176.2 million metric tons, an increase of 25% over the same period last year.

Sugarcane crushing in the second half of June totaled 33.2 million metric tons, down 0.6% from the 33.4 million tonnes the same period a year ago due to excessive rains, UNICA said in its latest crop report. The region produced 8.7 million metric tons of sugar by June 30, up 33% from the 6.5 million metric tons a year ago. Ethanol output reached 7.5 billion liters (about 2 billion gallons), up by 20% from last year, though the increase has been for hydrous ethanol, which is used to supply flex-fuel cars in Brazil. The sale of flex-fuel cars is booming in Brazil, with 92% of new cars sold as FFVs, totalling 1.2 million new cars just in the first half of 2009.

As this blog has noted, Brazilian sugarcane mills have been increasing the share of the crop directed to sugar production this season due to higher returns than those with ethanol. Ironically, countries that shunned sugarcane ethanol are now running out of sugar for human consumption and are calling on the world’s largest ethanol exporter (i.e. Brazil) to bail them out!

Brazilian ethanol attracts bioplastics investors.

The Sugarcane Blog, 15/07/09.


Brazil’s highly developed sugarcane-based ethanol industry is attracting investments in bioplastics, and second-generation technologies are growing strongly too. Yet ethanol makers are grappling with market instability, says Carlos Coutinho, PricewaterhouseCoopers in a report in ICIS, a must read for the chemicals industry.

Alternative energy sources have undergone a renaissance in recent years. Ethanol has started to attract greater attention from governments and policymakers, not only as a source of biofuel, but also as a feedstock for a number of chemicals usually derived from oil.

Ethylene, in particular, has gained attention, for use in its raw form and as a resin, as well as the basis for a host of products. Brazil’s tropical climate gives the country a natural advantage in producing biofeedstocks, and Brazilian companies are at the forefront of efforts to develop and produce green plastics.

Ethanol from sugarcane is a first-generation biofuel, and has been subject to some of the same concerns facing other first-generation biofuels. Some critics say that increasing Brazil’s production of sugarcane could have negative social and environmental consequences, with land use a prime concern.

Others have vigorously defended the sustainability of first-generation ethanol production in Brazil. Ethanol produced in Brazil uses sugarcane as a raw material, unlike the corn-based ethanol produced in the US. The Wharton School of the University of Pennsylvania, US, published an analysis in its Knowledge@Wharton series of articles asserting that land is plentiful in Brazil, with ethanol production occupying only 1% of the country’s arable land. The authors point out that nearly two-thirds of recent sugarcane expansion has taken place in mostly degraded pastures. They also believe that improvements in the productivity of land used for cattle grazing should free up land for other uses. Brazil’s technologically advanced production techniques have resulted in high yields, and the production of other foodstuffs has also grown steadily in recent years, they note.

Preharvest burning activities, which release carbon dioxide (CO2) into the atmosphere, and difficult working conditions for cane cutters are two additional sustainability concerns. New technology to convert sugarcane waste into energy and increasingly mechanized harvesting techniques are likely to reduce burning significantly. Brazil’s Sugar Cane Industry Union, UNICA, signed an agreement with the Environment Secretariat for the State of Sao Paulo in 2007 to bring forward from 2021 to 2014 the end of sugarcane burning – as well as the end of manual cutting – in the majority of plantations. UNICA has also launched an initiative to help retrain unemployed cane cutters.

While many in Brazil remain committed to first-generation biofuels, and indeed the United Nations Food and Agriculture Organization has described Brazil as the only location in the world where these are being produced cost-competitively, efforts are underway to develop commercially viable second-generation fuels. Novozymes, a Danish enzyme producer, has received funding from the EU for a cooperative project with Brazilian private sugarcane technology firm CTC to develop technology for converting sugarcane by-products into ethanol. Novozymes says it intends to launch commercially viable technology by 2010. Using sugarcane by-products would mean that production of first and second-generation ethanol could take place in parallel, using existing infrastructure.

PLANNED EXPANSIONS
US cellulosic technology company KL Energy has also announced a planned expansion into Brazil. The company plans to tailor its existing cellulosic technology to produce second-generation ethanol from sugarcane by-products and straw. It intends to cooperate with add blue, a Brazilian company specializing in business development in Brazil’s renewable energy industries, which will also offer ethanol plant process optimization technologies.

Whether green plastics producers will be able to take advantage of these developments in second-generation biofuels remains to be seen. Plastics manufacturers depend on long-term contracts, and some ethanol supply contracts are short-term. Further, plastics makers looking to use ethanol may have to compete to secure sufficient supplies if global demand for biofuels continues to surge.

Some industry players are confident that biofeedstocks have a promising future. One of the largest polyethylene (PE) producers in Latin America, Braskem, is aggressively pursuing the development of green plastics. In December 2008, Braskem said its board approved the company’s proposed green PE project requiring an investment of reais 500m ($211.5m). Braskem plans to produce ethylene and PE from sugarcane ethanol in a new facility to be built in the Triunfo petrochemicals complex, in Rio Grande do Sul, southern Brazil (see Braskem feature, page 26). The company laid the cornerstone in April 2009. Braskem has already successfully piloted the production of bio-based PE, garnering accolades from the US’s Society of Plastics Engineers.

Braskem views its green plastic as extremely sustainable. The company ­estimates that the production of each kilogram of recyclable PE made from biofeedstocks results in the absorption of 2.5kg of CO2 through the growing process. The company expects to garner a price premium from customers seeking more sustainable products. The export potential looks to be high, with major companies including car manufacturer Toyota and cosmetics company Shiseido, both Japanese, already expressing interest in the new resin. Braskem has also announced that it will cooperate with another Brazilian player, Cromex, to develop a range of colors for the new plastics, as well as additives to optimize resin processing and final product performance.

In addition to its initiative around PE, Braskem announced in June 2009 that it is planning additional investment in research around further development of green propylene for the production of polypropylene (PP) based on 100% renewable raw material.

Another important Latin American PE producer,Quattor, a new entity created in June 2008 as part of a major restructuring of Brazil’s chemical sector, also has plans to develop green plastics. Quattor is pursuing a licence for ethanol dehydration to produce ethylene and is looking to produce propylene from glycerin, a by-product of biodiesel production. It has applied for a patent for the proposed technology for the latter process.

Among other companies using Brazilian ethanol as a feedstock are French chemical firm Rhodia, which makes ethanol-based solvents in Brazil, and Solvay Indupa, a subsidiary of Belgium’s Solvay, which is planning to produce polyvinyl chloride (PVC) using ethylene from ethanol feedstocks in Santo Andre, in the Southeast of the country. Solvay Indupa expects to start up the 120,000 tonne/year plant by the beginning of 2011.

IMPACT OF CRISIS
The ongoing financial crisis has had a clear impact on plastics production in the region. According to the American Chemistry Council (ACC’s) March and provisional April 2009 Global Chemical Industry Production Index, overall chemical production in Latin America was down by 11.8% in the first four months of 2009, compared with 2008.

Nonetheless, Brazilian companies are not backing away from their investment in green plastics. They continue to anticipate robust demand for the new green materials as consumer products makers respond to growing sustainability awareness on the part of end-users, so green plastics should remain competitive, even given lower oil prices.

For Brazilian companies, the current shift to ethanol and other biofeedstocks is not just a stopgap solution to high oil prices. They are firmly convinced that alternative sources of raw materials, such as sugarcane, will have an important role to play in the overall product mix of a chemical industry that is sustainable for the future.

Carlos Coutinho is a tax partner at global consultancy PricewaterhouseCoopers and serves as the firm’s chemicals industry leader for South America.

ETHANOL MAKERS GRAPPLE WITH INSTABILITY
William Lemos/Houston

The Brazilian ethanol industry has expanded and attracted significant foreign investment in the past three years, but a number of mills are struggling to stay afloat because of volatility caused by the financial crisis.

“This is a complicated moment for the ethanol industry and the main obstacle continues to be lack of credit,” says Luciano Almeida, an official with the Sao Paulo state department of development. According to Almeida, the Brazilian ethanol industry became highly leveraged following a rapid expansion that took place in the past three years. But when credit markets suddenly froze in late 2008, a number of mills were left hanging by a thread.

The slowdown in the economy dealt a huge blow to some of the units that had just begun operating, said Jose Vaz, general manager of SIMTEC, an annual sugar and ethanol industry technology conference in Piracicaba, Sao Paulo.

On the sidelines of the 7th edition of SIMTEC, which took place in the first week of July, Vaz said that some investors, from Brazil and abroad, poured a lot of money into the Brazilian ethanol industry without really knowing what they were getting into. “Ethanol can be a quite volatile market,” he said, adding that some of the most successful Brazilian sugarcane groups have been in business for several decades. “Now it is all about a search for stability.”

Vaz was critical of the way Brazil is tackling the global financial crisis, saying that the government is stifling growth by reducing taxes on the wrong side of the economy. The government is trying to stimulate the economy by cutting sales taxes, but it would be more beneficial for the country to reduce taxes on the production side, he said. The tax burden on Brazilian businesses is estimated at more than 30%, according to Vaz.

“But a tax break for businesses will not get you as many votes,” Vaz said, implying that the government was not willing to sacrifice political capital under its economic plan. “If you reduced taxes for businesses it would have the same effect as cutting sales taxes, except that it would add more jobs to the economy and generate more investment.”

The financial crisis is also blamed for triggering a sharp drop in Brazilian ethanol prices, further compounding the problem for the sector.

Cash-strapped mills began to sell ethanol at reduced prices in the first quarter in a desperate bid to service debt and meet operational cash needs. Adverse market conditions forced Brazil’s second-largest sugarcane group, Santelisa Vale, to seek a partner earlier this year to escape going into bankruptcy.

The financial crisis left the industry with at least one black eye after high-flying ethanol maker Infinity Bio-Energy filed for bankruptcy protection in late May.

Market sources expect the industry to go through a phase of intense consolidation as a result of the latest crisis.

“Consolidation, not bankruptcy, seems poised to be the name of the game from now on,” an industry consultant says.

Açúcar via Santos.

Valor Econômico, 15/07/09.

As exportações de açúcar pelo porto de Santos (SP), o maior da América Latina, devem totalizar 73% do total embarcado pelo país na safra 2009/10, segundo informações da Companhia Docas do Estado de São Paulo (Codesp). Se confirmadas as estimativas, será um crescimento de 30% sobre o ciclo anterior.

Cana mais produtiva com adubação intensiva.

O Estado de São Paulo, 15/07/09.

Conduzida no Centro de Solos e Recursos Ambientais do Instituto Agronômico (IAC-Apta), em Campinas (SP), uma pesquisa sobre a adubação de cana-de-açúcar com micronutrientes deve ajudar a elevar a produtividade da cultura no País e a melhorar a eficiência do sistema agroindustrial. Segundo o pesquisador Estêvão Vicari Mellis, a produtividade média obtida hoje - 80 toneladas/hectare - é baixa e pode ser melhorada. "Um dos fatores que contribuem para essa produtividade é a expansão da cultura para áreas com solos pouco férteis, que exigem manejo intensivo", afirma.

A pesquisa avalia a resposta da cultura à adubação com boro, cobre, manganês, molibdênio e zinco, em solos paulistas de baixa fertilidade. De 2006 a 2008, 15 ensaios com variedades tardias de cana foram instalados. Por hectare, foram aplicados 10 quilos de zinco, 10 quilos de manganês, 10 quilos de cobre, 3 quilos de boro e 2 quilos de molibdênio.

GANHOS

Na média dos resultados, independentemente do solo e da variedade cultivada, houve ganhos expressivos de produtividade. O zinco proporcionou o maior ganho, de 17%. Para o molibdênio e o manganês os ganhos médios foram de 14% e 12%, respectivamente. "Além dos ganhos na produção, a adubação com micronutrientes é vantajosa para o produtor porque pode ser feita junto com a adubação de plantio, sem custo adicional de operação."

Os experimentos são monitorados por análises de solo e de folhas, que avaliam as produções de colmos e o total de açúcar recuperável (ATR) na cana planta e na primeira soqueira. "O efeito da adubação é obtido por meio da comparação dos ensaios que receberam micronutrientes com a testemunha, que não recebeu aplicações. Já os efeitos na qualidade industrial são determinados nos laboratórios das usinas parceiras", explica Mellis.

No IAC, a pesquisa é coordenada por Mellis e pelo pesquisador José Antonio Quaggio. "O projeto Micronutrientes em cana-de-açúcar faz parte dos estudos feitos pelo Grupo Nutricana, que pesquisa fertilidade do solo, adubação e nutrição da gramínea", diz Mellis, acrescentando que um estudo como esse, que envolve um grande número de ensaios, jamais foi feito no País. "Os resultados finais da pesquisa serão obtidos no ano que vem."

Gazprom negocia com Petrobras a contrução de alcoolduto.

Relatório Reservado, 15/07/09.

A Gazprom negocia com a Petrobras um acordo para a construção de um alcoolduto no Brasil. Os russos estão dispostos a investir US$ 500 milhões, com a contrapartida de garantir parte do combustível para comercializá-lo na Europa. O etanol será produzido pela própria Petrobras Biocombustíveis.

Alexandre Cesar sugere adaptar usina de Cuiabá para álcool e gás.

Assessoria de Comunicação do Deputado Alexandre Cesar, 14/07/09.

O deputado estadual Alexandre Cesar (PT) apontou a necessidade em adaptar a usina termoelétrica de Cuiabá – Mário Covas - para funcionar tanto a gás quanto a álcool. A indicação da “usina flex” foi aprovada em Plenário e encaminhada ao diretor presidente da empresa Pantanal Energia (EPE), Fábio Garcia.

Segundo Cesar as termoelétricas podem ser movidas por diferentes fontes de energia como: carvão, óleo diesel ou combustível nuclear. “A grande novidade é o uso do álcool. Em uma termoelétrica convencional, movida a gás natural, o gás chega à usina por tubos subterrâneos e dos compressores vai direto para a turbina, onde é queimado. O calor provocado pela queima aciona um gerador produzindo eletricidade e que, por sua vez, entra diretamente no sistema através dos transmissores. Na ‘usina flex’, o álcool chega por caminhões e é armazenado em tanques. De lá é bombeado para a turbina, onde acontece um processo semelhante ao do gás. A diferença está em um equipamento modificado chamado combustor. Como o próprio nome diz, ele é responsável por acionar a queima do combustível e permitir a produção de energia”, explica o parlamentar.

O deputado justifica ainda que o modelo é de maior confiabilidade e segurança energética pelo fato de utilizar duas fontes de energia diferente: o gás e o álcool. Ele afirma que isso garante grande flexibilidade, ao permitir a escolha do combustível de melhor preço no momento. “A utilização do álcool ao invés do diesel trará ainda redução significativa nos valores compreendidos, além de diminuir o impacto ambiental”, afirma.

A experiência já está sendo aplicada em Minas Gerais, na usina de Juiz de Fora que passa por adaptações para receber o novo combustível. O projeto inédito promete produzir energia de forma mais limpa. O término das obras está previsto para dezembro, quando começam os testes operacionais. Foram investidos R$ 11 milhões na troca dos equipamentos que permitem o recebimento, o armazenamento e a movimentação do etanol. Conforme Cesar o valor é considerado pequeno diante dos ganhos ambientais e econômicos.

Energia para mover o mundo.

Zero Hora, 15/07/09.

O empenho do governo em acelerar o crescimento do Brasil traz a promessa de muito trabalho para os engenheiros. E, quando o assunto é a matriz energética, um novo profissional está entrando em campo: o engenheiro de energia, que estuda cinco anos com foco nas formas e nos métodos de conversão, levando em conta o ganho e as perdas de cada opção para obter energia.

Nos planos de desenvolvimento, a biomassa (para a produção de etanol e outros biocombustíveis) está em alta. Mas o potencial (hídrico, solar, eólico e outras) para a produção de eletricidade de cada região também precisa ser explorado de maneira sustentável e eficiente, e abre campo de atuação e pesquisa. Os maiores empregadores são Petrobras, Eletrobras, usinas de etanol e biodiesel e companhias de transporte de distribuição de gás natural como a Gasbol e a Congás.

O curso de engenharia focado em energia oferece poucas vagas. Mas o Rio Grande do Sul está na ponta. Os primeiros oito profissionais foram graduados em março do ano passado, na Universidade Estadual (Uergs). A graduação também passou a ser oferecida na Unipampa, em Bagé, e está pronta para iniciar na Universidade Federal do Rio Grande do Sul (UFRGS). O curso foi criado no departamento da Engenharia Mecânica da universidade e aguarda aprovação dos conselhos superiores da instituição para abrir vagas no vestibular 2010.

– Identificamos a demanda desse profissional pelo mercado e esperamos aprovar o currículo. Esse engenheiro também pode trabalhar em empresas com uso intenso de energia, para buscar a economia. Na Itália, eles chamam de Energia Energética e já há um mercado definido. No Brasil, quem busca a especialização encontra boa colocação – diz a pesquisadora de energia eólica da UFRGS, Adriane Prisco Petry.

Na Uergs, o curso atrai jovens que desejam experimentar novos processos e apostar alto na eficiência energética (economia para a indústria), como Natália Weber, 24 anos. Ainda no primeiro ano, a estudante não esconde a empolgação:

– Quero mudar o mundo. Estudei Administração por um tempo, mas não gostei. O curso de Engenharia em Energia está dentro do que eu esperava. Já tivemos uma disciplina de fontes de energia e deu para ter ideia do que vai ser a graduação. Os professores são muito bons, todos doutores – diz a estudante, já torcendo para embarcar para as primeiras visitas técnicas a Itaipu e ao parque eólico do Estado, previstas para a turma em outubro.

Francine Nachtigall, coordenadora da graduação, conta que os oito formados na Uergs atuam em São Paulo e a maioria seguiu para o pós-graduação. E para quem pensa em ocupar uma vaga, adianta:

– O curso dá uma visão abrangente. Trabalhamos com toda a matriz energética brasileira, com ênfase em bioenergia e disciplinas químicas voltadas ao biodisel e biogas. Planejamento e gestão energética também são áreas fortes no curso.

Cosan na Austrália?

Folha de São Paulo, 15/07/09.

Circula na imprensa da Austrália que a brasileira Cosan é uma das possíveis compradoras do ramo de açúcar do conglomerado CSR. Outras três empresas estão no páreo. Consultada, a Cosan diz que não comenta especulações.

Unfavorable weather hurts Brazil’s sugarcane crush in second half of June.

UNICA, 07/15/2009.

Rains during much of June in the sugarcane growing areas of South-Central Brazil led to a number days where cane crushing was suspended in several mills, reducing both the available days for harvesting as well as the sucrose content of the harvested cane. As a result, there was less time for the harvest in June compared to the month before as well as the month of June a year before.

The state that was most affected was Parana, where only 61.3% of the available harvest days were utilized, resulting in about 11.5 days stopped. The utilization rates were also low in Mato Grosso do Sul, which came in at 68.9% during the month. In Sao Paulo state, utilization was 79.5%, similar to the average for the South-Central region, which accounts for 88% of Brazil’s total sugarcane harvest.

In the second half of June, the harvest reached 33.23 million tons of sugarcane, 0.74% less than in the same period a year before. The reduction in harvesting would have been even greater during the two-week period if not for the entry of 10 mills that began production in the current harvest. Of these, three are new mills making their very first harvest. In all, four new mills started production in June and another two in the first half of July. Among previously operating mills, twenty have yet to begin their harvest in the 2009/10 crop year.

Volumes

As for maturation of the cane in the second half of June, the total recoverable sugars obtained per ton of sugarcane (known as ATR in Portuguese) reached 133.03 kg per ton of cane crushed, which is 1.61% lower than in the same period last year. The total accumulated since the beginning of the crop year is 123.98 kg per ton of cane crushed, 0.01% more than the accumulated amounts in the same period last year. Since the beginning of the harvest, the total sugarcane crush stood at 176.22 million metric tons on June 30, a 24.77% increase compared to the same period in the previous harvest.

Of the total sugarcane harvested in the second half of June, 44.91% was utilized to make sugar, with production reaching 1.89 metric tons in the period, a 6.6% increase compared to the same period in the last crop year. Since the beginning of the current harvest, the South-Central region has produced 8.67 million metric tons of sugar, 33.67% above last year’s total at this time. Up to now, 41.63% of the sugarcane harvest in South-Central Brazil this year went to sugar production.

Ethanol & Sugar

Ethanol production in the second half of June reached 1.424 billion liters, 8.2% below the same period in the last crop year. Of this total, ethanol production was divided in 359 million liter of anhydrous ethanol and 1.065 billion liters of hydrous ethanol. From the beginning of this harvest to the end of June, anhydrous ethanol production totaled 1.532 billion liters, down 23.84% from the same period a year before. Hydrous ethanol, used to fuel the growing fleet of flex-fuel vehicles in Brazil, reached 5.950 billion liters, up 40.29% from the same period in last year’s harvest.

Sugar exports in the entire country during the first three months of the harvest (April through June) reached 5.69 million tons, compared to 4.23 million tons during the same period last year. Of the total sugar exports, 74% was of the VHP type, compared to 68% during the same period last year.

Total ethanol exports since the beginning of the harvest totaled 985 million liters, compared to 1.1 billion liters in the same period last year. There has been a significant reduction in exports of anhydrous ethanol to the United States, which totaled only 22.3 million liters during the first three months of the harvest, compared with 376.2 million liters of anhydrous ethanol shipped to the U.S. during the same period last year. Exports to Caribbean countries and to Europe remain at about the same levels as last year. The reduction in direct exports to the United States has been offset by a large increase in exports to India, Japan and South Korea.

In the Brazilian market, demand for anhydrous ethanol has been stable, even with increased sales of flex-fuel cars. As for hydrous ethanol, in the first three months of the harvest (April, May and June) sales have increased 25% compared to the same period a year before, with shipments by producing mills totaling 1.92 billion liters, up 1.5% from the previous month (May).

Prices

Despite the slight improvement observed in prices paid to producers, ethanol prices remain below production costs. Three factors explain the increase in ethanol demand in the domestic market:

· The expanding flex-fuel vehicle fleet in Brazil, which now accounts for over one-third of the country’s entire light vehicle fleet;

· Competitive ethanol prices at the pump, as compared to the price of gasoline; and,

· On the supply side, a harvest that is surpassing expectations, particularly in June, both from the standpoint of quantity of sugarcane processed as well as the volume of recoverable sugars per ton of cane crushed.

It is important to note that despite better prices paid to ethanol producers, as observed in the wholesale market in the last few weeks, prices for consumers at the pump remain competitive with gasoline.