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Biofuels at the Centre of Energy- Environmental Efficiency in Mobility – the case of RenovaBio in Brazil Dr. Plinio Nastari President, DATAGRO Civil Society Representative at Brazil’s CNPE – National Council on Energy Policy 17 th International Conference on Renewable Mobility Fuels of the Future 2020 20-21 January 2020 Berlin

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Biofuels at the Centre of Energy-Environmental Efficiency in Mobility – the case of RenovaBio in Brazil

Dr. Plinio NastariPresident, DATAGROCivil Society Representative at Brazil’s CNPE – National Council on Energy Policy

17th International Conference on Renewable MobilityFuels of the Future 202020-21 January 2020 Berlin

Brazil is already substituting 45.9% (2019) of its gasoline with bioethanol,

but there is a need of more Previsibility to drive Investments in

fuels and mobility

Brazil´s Otto cycle fuel consumption in 2019: 51.5 billion litersCAGR (2019): +4.1% p.a.

% of Ethanol in Consumption ofOtto Cycle Fuels, 2019

3Source: DATAGRO, in gasoline equivalent.

9,9%

45,9%

12,0%9,5%

3,5%

10,0%

1,5%

7,2%

25,0%

12,4%8,0%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%

40,0%

45,0%

50,0%In Brazil, based on 27% anhydrous ethanolblended in gasoline + hydrous ethanol used bythe flex fleet (in Dec/19, 80% of light vehicle fleet)

50,0%

49,2%

48,6%

48,5%

47,7%

44,3% 41,8%

38,9%

37,0%

39,2%

38,1%

37,7%

37,3%

40,2%

39,7%

39,4%

31,6%

37,2%

41,5%

45,0%

42,0%

32,3%

30,3%

33,7% 36,2%

42,0%

39,4%

38,2%

43,8%

45,9%

25%

30%

35%

40%

45%

50%

55%

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Source: DATAGRO

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% of Ethanol in Otto Cycle Fuel Consumptionin gasoline equivalent

The Option of Technological Pathwayfor Fuel & Motorization depends on the

method used to measureEnergy Efficiency & Environmental Impact

Cradle-to-Tumb (CtT)or

Well-to-Wheel (WtW)or

Tank-to-Wheel (TtW)5

Comparison of Fuels & Motorization under WtW

6

Source: AEA , Brazilian Association of Automotive Engineering, MAHLE, 2019.

0,30

0,50

0,70

0,90

1,10

1,30

1,50

1,70

1,90

0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160

Ener

gy C

onsu

mpt

ion

(MJ /

km

)

GHG Emissions (gCO2e/km)

ICE E100 / MH

ICEF % RenovaBio (RB)

ICENF E30 (99%) HOF up MH

ICE E27 up MH

Hybrid E100 (96%)

Hybrid % RB

Hybrid E27

Elect. Biomass (2022)

Elect. Brazil

Elétr. Natural Gas

Ethanol Fuel Cell

ICE E0 Europa

Hybrid E0 Europa

Elect. Europe

2017

E27 e E30 (99%) HOF% RENOVABIOETHANOL E100

2022

Beyond 2032

2027

1,82

1,62

Internal Comb. Engines

HybridsFuel Cell

0,822

Electric

Comparison of GHG Emissions under WtW - 2017

7

Source: AEA / MAHLE, 2019.

Total GHG Emissions in gCO2e/km - 2017

145

128 122

92 87

6558

29

0

20

40

60

80

100

120

140

160

Comparison of GHG Emissions under WtW - 2032

8

127

100 98

7464

42 3827 27

0

20

40

60

80

100

120

140

160

Source: AEA / MAHLE, 2019.

Total GHG Emissions in gCO2e/km – estimated in 2032

Other Environmental & Health Benefits

Ethanol, Biodiesel e Biomethane substitute/ reduce emissions of:

• Particulate Matter, MP2.5

• Tetra-ethyl lead• Carcinogenic Aromatics• Carbon Monoxide• Formaldehydes• Volatile Organic Compounds (VOCs) precursors of

photochemical smog

9

Next steps

Optimization of ICE Flex

Hybrid Flex

Electrification using Sustainable Biofuels

10

Automotive Technology• Electrification with biofuels

– “With the current ethanol distribution infrastructure, Brazil has alreadysolved the Hydrogen distribution hurdle” (Nissan, June 2016).

– Electrification with ethanol does not require use of rare metals.– Distribution of ethanol, as a sole or blended fuel in gasoline, is equivalent

to a network of Hydrogen already in place.

11

Automotive Technology

• Electrification with Ethanol– Is an electric car using ethanol, without the problems faced by

Electric Battery Vehicle, taking advantage of the high content ofHydrogen in ethanol.

12

13

Prototype presented at 16th DATAGRO´s Conference in S.Paulo, in October 2016.

Electric Battery Vehicles (EBVs) will fail due to infrastructure challenges, while Fuel Cell Vehicles (FCVs) represent the real advance in electrification in mobility

62% of executives agree totally or partially thatEBVs will fail due to infrastructure challenges

78% of executives agree totally or partially thatFCVs represent the real advance in electrification in mobility

Totally Agree 33%

Partially Agree 45%

Neutral 16%

5% Partially Disagree

1% Totally Disagree

Totally Agree 22%

Partially Agree 40%

Neutral 20%

12% Partially Disagree

6% Totally Disagree

Source: 18th consecutive Global Automotive Executive Survey, Feb 2017

KPMG Global Automotive Executive Survey 2017

Electrification with Ethanol• Takes advantage of high energy density of ethanol• Avoids the trap of fossil-derived electricity (importance of

considering WtW concept)• Electrification with Ethanol has the lowest GHG emission• Uses existing liquid fuel distribution infrastructure• Avoids concerns over:

– Availability and sourcing of lithium-ion and cobalt– Life-span of batteries– Discart of batteries and the pollution it generates

• Is the option that promotes development (jobs and income) and the simultaneous integration of energy, agricultural, industrial & environmental public policy objectives.

15

Strategic Vision for the Future of Mobility in Brazil & Selected Countries

It is possible to enlarge the use of high-density low-carbon liquid fuels, stimulating higher energyefficiency and lower environmental footprint,Complementing in a virtuous way renewable andtraditional fuels,Using the existing infrastructure, andPromoting local technologies in fuel production andin automobile technology for local use and exports.

16

Brazil´s New National Biofuels Plan (RenovaBio), designed by CNPE and enacted into

Law in December 2017, is a relevant strategy to reinforce policy towards

Biofuels and the achievement of Brazil´s commitments before

the Climate Agreement

17

• Innovation and efficiency in biofuel production and use is at center of Brazil´s strategy for the use of low carbon sources of energy.

• RenovaBio is not subsidy, nor carbon tax.

18

RenovaBio is a regulation based on 2 pilars:

– Induction of energy efficiency in production and use ofbiofuels;

– Recognition of the capacity of each biofuel to promotecarbon reduction.

19

Target:

• Market-driven mechanism to promote expansion of biofuel/bioenergy in final energy demand (including in sea and air transport) based on sustainable practices, and increased energy-environmental efficiency.

20

Mechanism: • Voluntary certification of biofuel producers for their

energy-environmental efficiency, based on life-cycle assessment (LCA), which will determine ability to request issuance of Decarbonization Credits (CBios);

• Financial institutions will issue Carbon Reduction Credits (CBios) to be freely negotiated at public exchange;

• Definition of long term country carbon reduction target for the fuel sector, leading to individual fuel distributor carbon reduction targets, to be met with acquisition of CBios.

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• Market-driven carbon pricing mechanism (endogenous, not exogenous determination), rewarding achievement of individual efficiency, not a common or equal coverage.

• Unleash market forces to implement and drive innovation for increased competitiveness in biofuel/bioenergy production.

• Stimulates continued demand growth, independent of government mandate.

• RenovaBio does not elect/predefine champions – expansion of bioenergy will be driven by energy-environmental efficiency and sustainable production.

22

Elegibility criteria:

• Zero deforestation: biofuel production cannot be based on feedstocks coming from deforested areas.

• All area under cultivation must be registered under CAR System (Brazil´s Forestry Code).

23

Is based on the belief that market forces should drive the choice

for the most efficient option towardsincreased energy-environmental efficiency

in fuel production & use.

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Relevance of the distribution system

• Brazil can take advantage of its fuel distribution system for:– Hydrous Ethanol used as sole fuel, in fleet which is already over 80% flex

and growing, – Anhydrous Ethanol blended at 27% v/v in all gasoline nationwide (E27) –

Brazil has been using “mid-level blends” for a long time,– Biodiesel blended in all fossil-based diesel Nationwide (B11), going to B12

in March/2020, and B15 in March/2023.

• Biofuel is SOLAR ENERGY captured, stored anddistributed in an efficient, economical & safe manner.

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Relevance of the distribution system

• Brazil can take advantage of its fuel distribution system for:– Hydrous Ethanol used as sole fuel, in fleet which is already over 80% flex

and growing, – Anhydrous Ethanol blended at 27% v/v in all gasoline nationwide (E27) –

Brazil has been using “mid-level blends” for a long time,– Biodiesel blended in all fossil-based diesel Nationwide (B11), going to B12

in March/2020, and B15 in March/2023.

• Biofuel is HYDROGEN captured, stored and distributedin an efficient, economical & safe manner.

26

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222 biofuel producers are under RenovaBiocertification

Source: DATAGRO, www.datagro.com

222 biofuel-producing units are in the process ofcertification under RenovaBio, of which 138 havecompleted, or are under public consultation period. These136 units (8 biodiesel, 1 biogas and 129 ethanol producers)represent potential generation of 22.95 mm CBIOS (mmtCO2e), or 80% of the national target of 28.7 mm CBIOs for2020 (updated 13 Jan 2020).

RenovaBio – a model for expansion of clean energy solution in mobility

-10.1% Reduction in C I

2018 2028Otto Cycle (gas eq)* 56,0 69,5

Gasoline A (pure) 31,1 30,0Anhydrous Ethanol 11,5 11,1

Hydrous Ethanol 15,2 36,0Total Ethanol 26,7 47,1

Diesel Cycle 57,0 73,9Diesel A (pure) 51,2 62,8

Biodiesel 5,7 11,1CNG (gas eq)* 2,5 2,5Biomethane 0 0,25Jet Fuel 7,2 9,5Bio Jet Fuel 0 0,36* Values in Gasoline Equivalent

Target Considered

Demand (million m3)

COP23-Fiji in Bonn

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Declaration of Vision, by 19 Nationsrepresenting over 50% of world population, 37% of world GDP + IEA + IRENABonn, November 16, 2017

Target for 2030 (to achieve the 2-Degree Scenario) • % of Bioenergy in world energy demand must double.• % of sustainable low carbon Biofuels in transport fuels,

including sea and air transport, must triple.

Scaling up the bioeconomy is possible, given smart agricultural practices, better use of rural and urban waste, and proper policies.

30

“Beyond 2025, IRENA’s Renewable Energy Roadmaps (ReMap) scenarioforesees that a global output of 500 billion liters of biofuels would beneeded by 2030 (of which 124 billion liters in advanced biofuels) and1,120 billion liters per year by 2050 to most cost-effectively contributeto the achievement of the Paris Agreement’s goals (IRENA, 2017).”

In Creating the Biofuture: A Report on the State of the Low Carbon Bioeconomy, 2018, pp.23-24.

Nastari, P., Eletrificação com Biocombustíveis, ANP, Fev 2019.

Biofuels Solve The Two BiggestChallenges For Humanity

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With biofuels we can solve the 2 biggest problems facing Humanity:

• Global Warming and• The Refugee crisis

Nastari, P., Eletrificação com Biocombustíveis, ANP, Fev 2019.

We are moving towards the Age of Hydrogen

Not Hydrogen captured and stored in high-pressure, costly and risky Titanium tanks,

but Hydrogen represented by high-density, low carbon footprint, sustainably produced

Advanced Biofuels such as

Ethanol, Biogas & Biomethane

RenovaBio: model for expansionof clean & efficient energy solution for mobility

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T +55 11 4133.3944F +55 11 4195.6659

[email protected]

www.datagro.com