Source: Brasil Biodiesel
As world oil reserves dwindle, some say we have reach the dreaded “Peak Oil” syndrome, many new business opportunities take shape as necessity is the mother of invention. Many opportunities to cash in on this high growth market are available ranging from developers with pipelines of refineries to be built, agricultural producers with until now useless land, to independent distributors and exporters.
Biodiesel is not an isolated business in the global economy and many factors contribute to or hinder its development. Therefore, although the Brazilian government has created a very positive regulatory environment, before starting a business involving biodiesel, it is necessary to study the macroeconomic forces that interfere in this business.
The country has great advantages in its geography agronomists, for being in a tropical region, with high solar radiation figures and average annual temperatures. Associated with water availability and regularity of rainfall, it is the country with the greatest potential for renewable energy production.
But biodiesel does not come from treating crops and biomass, new technologies based on Gas Plasma Arc processes and Thermolysis are being used to sole another problem by turning Municipal Solid Waste in biodiesel. Even smaller and remote cities are building plants of this nature to get rid of the waste and make money on the private initiatives investing in building these facilities.
Brazil has explored less than a third of its arable land, which is the greatest frontier for agricultural expansion in the world. The potential is about 150 million hectares, 90 million related to new frontiers, and another 60 related to grazing land that can be converted to agricultural use in the short term. The government Biodiesel Program aims to use only land unsuitable for growing food.
There is also a wide variety of options for biodiesel production, such as the babassu palm and in the north, soy, sunflower and groundnut in the south, southeast and midwest, and castor oil, which besides being the best of the semi-arid northeast, is also presented as an alternative to the other regions of the country.
The synergy between the oilseed complex and the ethanol industry brings the need for increased production of alcohol. Biodiesel production consumes ethyl alcohol by transesterification by ethylic route, which generates increased demand for the product. Consequently, the biodiesel project also encourages the development of this sector, generating new investments, employment and income.
The ANP (Agência Nacional do Petróleo) estimates that the current Brazilian production of biodiesel is the order of 176 million liters annually.
The current level of production is a major challenge to achieving the goals established under the National Program of Biodiesel Production and Use, which will require approximately 750 ML in its initial phase. That is, the current production capacity meets only 17% of demand, considering the mix B2. However, with the approval of plants whose request Moving in ANP, the ability to match production with demand forecast for 2006. This capacity will be tripled by 2012, with the need of adding 5% biodiesel to biodiesel.
In order to give perspective to the prospect of expanding biodiesel production in Brazil, projections were made for the period 2005 to 2035. Considere the following basic official assumptions to make a projection:
- Geometric growth rate of consumption of diesel oil substitutes, or 3.5% pa;
- Blend of biodiesel to diesel by 2% starting and ending at 40%;
- Oil productivity starting at 600 kg / ha and ending in 5000 kg ha-1;
- It was considered that large plant that processes over 100 kt.ano-1;
- Portion allocated to large production plants 80%;
- Crackers installed in small communities or rural properties reaching 100,000 at the end of the period, with average production of 250 L.dia-1;
The figure shows that Brazil could produce only for the internal market, an approximate volume of 50 GL, the largest share being produced by transesterification (80%) and the remainder by cracking. The production by transesterification meet the large wholesale market, intended to blend with biodieseldiesel, the supply of fleet owners or consumers interested in increasing the proportion of biodiesel in biodiesel.
It is estimated that the production of biodiesel for external and internal markets at the end of the period, is equivalent (see graph above). However, in the first 10 years, the market will absorb the entire production. Throughout the domestic and foreign markets, the ethanolic transesterification route account for 90% of biodiesel produced. In this scenario, the end of the period, there will be a demand for 6 GL of ethanol and glycerol production 4mt, highlighting the potential for integration of chains with the production of biodiesel.
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