university of campinas school of agricultural … · university of campinas school of agricultural...

89
UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL ENGINEERING NARIÊ RINKE DIAS DE SOUZA TECHNO-ECONOMIC AND ENVIRONMENTAL EVALUATION OF BEEF PASTURE INTENSIFICATION WITH SUGARCANE ETHANOL AVALIAÇÃO TECNO-ECONÔMICA E AMBIENTAL DA INTENSIFICAÇÃO DE PASTAGENS E ETANOL DE CANA-DE-AÇÚCAR CAMPINAS 2017

Upload: others

Post on 28-May-2020

0 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

UNIVERSITY OF CAMPINAS

SCHOOL OF AGRICULTURAL ENGINEERING

NARIÊ RINKE DIAS DE SOUZA

TECHNO-ECONOMIC AND ENVIRONMENTAL EVALUATION OF BEEF PASTURE

INTENSIFICATION WITH SUGARCANE ETHANOL

AVALIAÇÃO TECNO-ECONÔMICA E AMBIENTAL DA INTENSIFICAÇÃO DE

PASTAGENS E ETANOL DE CANA-DE-AÇÚCAR

CAMPINAS

2017

Page 2: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

NARIÊ RINKE DIAS DE SOUZA

TECHNO-ECONOMIC AND ENVIRONMENTAL EVALUATION OF BEEF PASTURE

INTENSIFICATION WITH SUGARCANE ETHANOL

AVALIAÇÃO TECNO-ECONÔMICA E AMBIENTAL DA INTENSIFICAÇÃO DE

PASTAGENS E ETANOL DE CANA-DE-AÇÚCAR

Dissertation presented to the School of Agricultural

Engineering of the University of Campinas in partial

fulfillment of the requirements for the degree of Master

in Agricultural Engineering in the Area of Rural

Constructions and Environment.

Dissertação apresentada à Faculdade de Engenharia

Agrícola da Universidade Estadual de Campinas como

parte dos requisitos exigidos para obtenção do título de

Mestra em Engenharia Agrícola na Área de Construções

Rurais e Ambiência.

Supervisor: Luis Augusto Barbosa Cortez

Co-supervisor: Juliana Aparecida Fracarolli

This exemplary corresponds to the final version of

the Master’s thesis defended by the student Nariê

Rinke Dias de Souza, with Prof. Dr. Luis Augusto

Barbosa Cortez as supervisor and Prof. Dr. Juliana

Aparecida Fracarolli as co-supervisor.

CAMPINAS

2017

Page 3: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

3

Page 4: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation
Page 5: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

DEDICATION

I dedicate my dissertation and all the hard work I have had so far to my beloved father (in

memoriam) who has taught me everything I know including how to be as strong as I was to fulfill

my Master’s obligations while I lost my world and a piece of my heart.

Page 6: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

ACKNOWLEDGMENT

I would like to express my deepest gratitude to my advisor Professor Dr. Luis Cortez for the

opportunity and patience to teach me important lessons;

To my co-advisor Professor Dr. Juliana Fracarolli for her dedication;

To the Brazilian Bioethanol Science and Technology Laboratory (CTBE) Biorefinery team:

Antonio Bonomi, Tássia Junqueira, Mateus F. Chagas, Terezinha F. Cardoso, Marcos D. B.

Watanabe, Otávio Cavalett, Isabelle L. M. Sampaio, Vera Gouveia and Bruno C. Klein for the

uncountable help;

To Solismar Venzke from Rotar, Antony Sewell from Boviplan, Sergio R. de Medeiros and Luis

G. Barioni from EMBRAPA, professor Manoel Regis Lima Verde Leal from NIPE, professor

Bruce Dale from Michigan State University and Ricardo Baldassin for all the attention and

meetings;

To professor Dr. Galen Erickson from University of Nebraska and Prof. Dr. Dan Loy from Iowa

State University, for all knowledge shared and for having received me so well;

To the Zootechnical team from Vale do Rosário for having received me and having shared their

experience in sugarcane-livestock integration;

To FEAGRI for having accepted me as a student and to supply me with incredible moments and

friends;

To Coordination for the Improvement of Higher Education Personnel - CAPES for my master

scholarship;

To my family and friends that have always supported and loved me, specially my mother Marilda,

whom I love so much;

And finally, to God for letting me experience this, learn a lot and meet all these amazing people.

Page 7: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

ABSTRACT

There is a world concern about greenhouse gases (GHG) emission and it was established on the

21th Climate Conference in Paris that the global temperature cannot increase above 2°C. Due to

climate change concern, there is a growing demand for bioenergy to replace fossil fuels. However,

the advantages of bioenergy decrease if it leads to deforestation and/or indirect land use change

(ILUC). Considering that, new models for renewable energy production are needed to

simultaneously decrease GHG emissions, use land more efficiently and replace large amounts of

fossil fuel. Ethanol and livestock integration as happens in the United States (USA) might be a

possible solution for a new model of production. Brazil, the second largest ethanol and beef cattle

producer in the world, can modify the USA model of corn ethanol and cattle integration for its own

circumstances. Brazil uses about 168 million hectares as extensive pasture and about 9 million

hectares for sugarcane production. These two products are pillars of the country’s economy. This

work evaluates the techno-economic and environmental feasibility of sugarcane ethanol and cattle

integration, thereby avoiding pasture displacement by sugarcane expansion and the ILUC. Cattle

before finished in pasture land can be finished in feedlots fed with sugarcane ethanol by-products

(in natura bagasse, hydrolyzed bagasse, molasses, wet yeast plus grains). Intensification of cattle

production by integration with sugarcane releases pasture area to produce more sugarcane, without

needing more land for cattle production. For this study, six different scenarios were assessed

varying relation between sugarcane and cattle area from 0 to 1. System-wide simulations were

performed using the Virtual Sugarcane Biorefinery (VSB) model developed by the Brazilian

Bioethanol Science and Technology Laboratory (CTBE). Data for the models were obtained from

literature and current actual cases of beef cattle/sugarcane integration. The calculated economic

parameters are internal rate of return (IRR), net present value (NPV) and payback time (PT). GHG

emissions were assessed via Life Cycle Assessment using ReCiPe Midpoint (H) method and the

Climate Change impact category. As result, integration decreases overall GHG emissions

compared to non-integrated systems and techno-economic feasibility is achieved considering

revenues from rental of released pasture area and from carbon credit.

Key-words: integration, sugarcane-cattle integration, ILUC, pasture intensification, sustainability,

life cycle assessment

Page 8: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

RESUMO

Há uma preocupação mundial com a emissão de gases de efeito estufa (GEE) e durante a 21ª

Conferência do Clima em Paris, foi acordado que o aumento da temperatura global não pode

crescer mais que 2°C. Devido à preocupação com a mudança climática, há um crescimento na

demanda de bioenergia para substituir os combustíveis fósseis. No entanto, as vantagens da

bioenergia podem ser reduzidas se levar ao desmatamento e/ou à mudança indireta do uso da terra

(ILUC). Nesse contexto, novos modelos de produção são necessários para diminuir as emissões de

GEE, usar a terra mais eficientemente e substituir as grandes quantidades de combustíveis fósseis.

A integração de etanol e gado como acontece nos Estados Unidos pode ser uma resposta viável

para um novo modelo de produção. O Brasil, segundo maior produtor mundial de etanol e bovino

de corte, pode adaptar esse modelo Estadunidense de integração para a realidade brasileira. O Brasil

tem cerca de 168 milhões de hectares utilizados como pastagens extensivas e cerca de 9 milhões

de hectares para a produção de cana-de-açúcar. Estes dois produtos são pilares para a economia do

país. Este trabalho avalia a viabilidade tecno-econômica e ambiental da integração de etanol de

cana-de-açúcar com gado de corte, assim evitando o deslocamento de pastagens pela expansão da

cana-de-açúcar e o ILUC. O gado antes terminado em pastagens pode ser terminado em

confinamentos com ração contendo bagaço in natura, bagaço hidrolisado, melaço, levedura, grãos

de milho e farelo de soja. A área liberada pela intensificação das pastagens é usada para produzir

mais cana-de-açúcar, sem precisar de mais terra para a produção de gado. Para este trabalho foram

avaliados seis cenários diferentes variando a relação de área de cana-de-açúcar e de pastagem de 0

a 1. As simulações foram realizadas na Biorefinaria Virtual de Cana-de-Açúcar (BVC) do

Laboratório Nacional de Ciência e Tecnologia de Bioetanol (CTBE). Os dados para simulações

foram obtidos em literatura e casos reais de integração. Para a avaliação econômica os parâmetros

são taxa interna de retorno (TIR), valor presente líquido (VPL) e tempo de retorno do investimento.

As emissões de gases de efeito estufa são avaliadas com Avaliação do Ciclo de Vida usando o

método ReCiPe Midpoint (H) e a categoria de impacto Mudanças Climáticas. Como resultado, a

integração diminui as emissões de GEE em relação aos sistemas não integrados e a viabilidade

tecno-econômica é atingida quando consideradas as receitas com aluguel da área de pastagem

liberada e também das receitas geradas pelos créditos de carbono.

Page 9: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

Palavras-Chave: integração, integração cana-pecuária, mudança indireta de uso da terra,

intensificação de pastagens, sustentabilidade, avaliação de ciclo de vida

Page 10: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

LIST OF FIGURES

Figure 1: World Agricultural Land in 2013 in billion hectares .................................................... 22

Figure 2: Land use in Brazil ......................................................................................................... 23

Figure 3: Brazilian CO2 eq emission by sector ............................................................................ 24

Figure 4: Representation of possible ILUC caused by sugarcane expansion on pasture land .... 26

Figure 5: Sugarcane production in Brazilian Center-South region and in São Paulo State ......... 29

Figure 6: Brazilian annexed sugarcane plant diagram flow ......................................................... 30

Figure 7: Brazilian ethanol and sugar production ........................................................................ 31

Figure 8: Brazil and the world’s largest cattle producers in 2016 (thousand heads) ................... 32

Figure 9: Largest states in Brazil considering cattle herd (million heads), pasture land (million

hectares) and slaughter (million heads) in 2015 ............................................................................ 33

Figure 10: Corn ethanol and livestock integrated production in the US ...................................... 37

Figure 11: US corn ethanol and DGS production along years ..................................................... 38

Figure 12: Dry-grind process for corn ethanol production ........................................................... 40

Figure 13: Wet-grind process for corn ethanol production .......................................................... 41

Figure 14: Production model of sugarcane ethanol and cattle integration ................................... 44

Figure 15: Location of Amazon forest, cattle herd and sugarcane plants in Brazil ..................... 47

Figure 16: São Paulo State mapping of sugarcane plants............................................................. 48

Figure 17: São Paulo State mapping of cattle herd ...................................................................... 48

Figure 18: Sugarcane agricultural steps diagram ......................................................................... 50

Figure 19: Ethanol plant industrial steps diagram ........................................................................ 50

Figure 20: Scenario 0.................................................................................................................... 52

Figure 21: Scenario 1.................................................................................................................... 52

Figure 22: Scenario 2.................................................................................................................... 52

Figure 23: Scenario 3.................................................................................................................... 53

Figure 24: Scenario 4.................................................................................................................... 53

Figure 25: Scenario 5.................................................................................................................... 53

Figure 26: Life Cycle Assessment Methodology ......................................................................... 59

Figure 27: Sugarcane ethanol and cattle integrated chain for LCA ............................................. 60

Figure 28: Total tCO2 eq emissions per scenario assessed........................................................... 70

Figure 29: Comparison of CO2 eq emissions per kilogram of meat produced in pasture and in

feedlot ............................................................................................................................................ 70

Figure 30: Sensitivity of gCO2 eq per MJ of ethanol ................................................................... 71

Figure 31: Total CO2 eq emissions (Mt) for the ethanol plant per scenario with “avoided ILUC”

sensitivity ....................................................................................................................................... 72

Page 11: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

LIST OF EQUATIONS

Equation 1: Relation between cattle area and sugarcane area ....................................................................51

r = Ac/Api

Equation 2: Net Present Value ....................................................................................................................56

NPV = ∑Cn

(1 + r)n

n=N

n=0

Equation 3: Internal Rate of Return ............................................................................................................56

0 = ∑𝐶𝑛

(1+𝐼𝑅𝑅)𝑛𝑛=𝑁𝑛=0

Page 12: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

LIST OF ACRONYMS AND ABBREVIATIONS

1G First generation ethanol

2G Second Generation Ethanol

ABIEC Brazilian Association of Meat Exporting Industries/Associação Brasileira das

Indústrias Exportadoras de Carne

ABNT Brazilian Association for Technical Standards/Associação Brasileira de

Normas Técnicas

ADF Acid Detergent Fibers

ADG Average Daily Gain

BNDES The National Bank for Economic and Social Development/ Banco Nacional de

Desenvolvimento Econômico e Social

CGEE Center for Strategic Studies and Management Science, Technology and

Innovation/Centro de Gestão e Estudos Estratégicos

CTBE Brazilian Bioethanol Science and Technology Laboratory/ Laboratório

Nacional de Ciência e Tecnologia de Bioetanol

CO2 Carbon Dioxide

CO2 eq Carbon Dioxide equivalent

CONAB National Supply Company/Companhia Nacional de Abastecimento

COP 21 21th Conference of Parties

CP Crude Protein

CTM Clean Trade Mechanism

CWE Carcass Weight Equivalent

DGS Distillers Grains with Solubles

DDGS Dried Distillers Grains with Solubles

DM Dry Matter

EMBRAPA Brazilian Agricultural Research Corporation/ Empresa Brasileira de Pesquisa

Agropecuária

EPA Environmental Protection Agency

EPE Energy Research Company/Empresa de Pesquisa Energética

FAO Food and Agriculture Organization of the United Nations

GHG Greenhouse Gases

Page 13: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

GPD Gross Domestic Product

GTPS Brazilian Roundtable On Sustainable Livestock/Grupo de Trabalho da

Pecuária Sustentável

GWh Giga Watt hour

ha Hectare

hd/ha Heads Per Hectare

IBC Iowa Beef Center

IBGE Brazilian Institute of Geography and Statistics/Instituto Brasileiro de

Geografia e Estatística

IGPM General Price Index – Market/ Índice Geral de Preços – Mercado

ILUC Indirect Land Use Change

IPAM Amazon Environmental Research Institute/Instituto de Pesquisa Ambiental

da Amazônia

IPCA Broad National Consumer Price Index/Índice Nacional de Preços ao

Consumidor Amplo

IRR Internal Rate of Return

ISO International Organization for Standardization

kg/hd.day-1 Kilograms per head per day

kg/hd.y-1 Kilograms per head per year

LCA Life Cycle Assessment

LUC Land Use Change

LW Live Weight

MAPA Ministry of Agriculture, Livestock and Supply/ Ministério da Agricultura,

Pecuária e Abastecimento

MDGS Modified Distillers Grains with Solubles

Mha Million Hectares

MJ Mega Joule

MOG Material Other than Grain

MR$ Million R$

Mt Million tons

Page 14: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

NDF Neutral Detergent Fibers

NPV Net Present Value

PT Payback Time

RFA Renewable Fuel Association

SEEG System for Greenhouse Gas Emissions and Removals Estimates/Sistema de

Estimativas de Emissões de Gases de Efeito Estufa

t/y Tonne per Year

tc Tonne of Sugarcane

t/ha.y-1 Tonne per Hectare per Year

TDN Total Digestible Nutrients

UNICA Brazilian Sugarcane Industry Association/União da Indústria de Cana-de-

Açúcar

USDA United States Department of Agriculture

USGC United States Grain Council

VSB Virtual Sugarcane Biorefinery

WDGS Wet Distillers Grains with Solubles

Page 15: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

LIST OF TABLES

Table 1: Brazilian cattle management .........................................................................................................35

Table 2: Sugarcane and dry-grind corn ethanol by-products ......................................................................45

Table 3: Scenarios definition .......................................................................................................................54

Table 4: Ethanol plant parameters ...............................................................................................................54

Table 5: Feed formulation for feedlot managements ..................................................................................55

Table 6: Assumptions for economic evaluation ..........................................................................................57

Table 7: Estimate of feed final price ...........................................................................................................58

Table 8: Production results of scenarios simulation ....................................................................................61

Table 9: Total investments for each scenario ..............................................................................................62

Table 10: Investments for ethanol plant ......................................................................................................62

Table 11: Economic results – ethanol plant ................................................................................................63

Table 12: Products participation on total revenue of ethanol plant .............................................................63

Table 13: Allocation costs for ethanol plant products .................................................................................64

Table 14: Economic results – cattle production considering land rental revenue of released pasture area

for sugarcane production ..............................................................................................................................64

Table 15: Economic results – cattle production considering land rental revenue of released pasture area

for sugarcane production and C credits revenue ..........................................................................................65

Table 16: Economic results - cattle production considering the cattle manager owns the land plus revenue

from land rental for sugarcane production ...................................................................................................66

Table 17: Economic results - cattle production considering the cattle manager owns the land and revenue

from land rental for sugarcane production plus carbon credits ....................................................................66

Table 18: Participation on cattle production total cost ................................................................................67

Table 19: Economic sensitivity for cattle production (IRR) .......................................................................68

Table 20: Results of Climate Change emissions .........................................................................................69

Table 21: Economic and environmental results for sugarcane ethanol and pasture intensification ............73

Page 16: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

SUMMARY

1 INTRODUCTION .....................................................................................................................................17

2 OBJECTIVE .............................................................................................................................................19

2.1 Specific Objectives .............................................................................................................................19

3 LAND USE AS A MAJOR ROLE IN THE FUTURE SCENARIOS OF FOOD AND ENERGY

PRODUCTION IN THE WORLD ..............................................................................................................20

3.1 Environmental Aspects of Biofuel Production ...................................................................................21

3.2 Possible ILUC Caused by Sugarcane Expansion ...............................................................................25

4 BRAZILIAN MODEL OF SUGARCANE ETHANOL PRODUCTION ................................................28

5 BRAZILIAN BEEF CATTLE PRODUCTION........................................................................................32

5.1 Other Cattle Producing Countries ......................................................................................................36

6 INTEGRATION MODEL: THE UNITED STATES ...............................................................................37

6.1 Corn Ethanol Production in the US ....................................................................................................38

7 REAL CASES OF ETHANOL-CATTLE INTEGRATION IN BRAZIL ................................................42

7.1 Potential of Sugarcane Ethanol By-Products as Cattle Feed ..............................................................44

7.2 Sugarcane Ethanol and Beef Cattle Integration in Brazil ...................................................................45

8 METHODOLOGIES .................................................................................................................................49

8.1 Data Collection ...................................................................................................................................49

8.2 Scenarios Definition ...........................................................................................................................51

8.3 Economic Evaluation .........................................................................................................................55

8.4 Life Cycle Assessment .......................................................................................................................58

9 RESULTS AND DISCUSSION ...............................................................................................................61

10 CONCLUSIONS .....................................................................................................................................75

REFERENCES .............................................................................................................................................77

ANNEX 1 – Cattle Production and Economic Evaluation ...........................................................................86

Page 17: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

17

1 INTRODUCTION

The world is worried about Climate Change mainly due to greenhouse gases emissions

(GHG) from fossil fuel energy, agriculture-livestock production and land use change (LUC).

Countries have signed the COP 21 agreements to decrease GHG emission, replace fossil fuel

energy and established goals and mandates to achieve these purposes.

Bioenergy production is increasing mainly due to the environmental concern;

according to Food and Agriculture Organization of the United Nations (FAO, 2012), not only the

world energy demand will increase until 2050, but also the demand for food, feed and fiber.

However, international environmental and climate change agencies started accounting

indirect land use change (ILUC) emissions for biofuels, which can cancel bioenergy advantages if

considering it leads to deforestation. Sugarcane expansion is constantly blamed of been one of the

reasons for Amazon forest deforestation due to ILUC from pasture land displacement.

Many authors have different perspectives about ILUC and biofuels leading to

deforestation. Regions as São Paulo State had large cattle herds before sugarcane expansion and

due to land price increase, the herd were pushed to cheaper areas, such as Amazon forest areas.

But, nowadays there are many and complex factors responsible for Amazon forest deforestation

such as illegal logging, lack of land tenure, indigenous and rural settlements and agricultural

expansion (GTPS, 2016).

Regarding world demand increase, land use plays a major role in this situation. The

world future trend is to intensify pasture land use to release area for crops production and then

achieve future demand of food and bioenergy sustainably. Currently, 26% of the global land use is

dedicated to pastures and meadows and only 1% used for crops. This is also observed in Brazil,

which has around 168 million hectares of pasture, 20% to 25% of the country’s total area, while

sugarcane occupies only 1% (9 Million hectares).

In order to dismiss the arguments that Brazilian sugarcane ethanol cause ILUC, its

production needs to expand without increasing area. For that, there are genetics improvement, 2G

ethanol production from bagasse and straw and also adaptation of the integrated model of the

United States.

Page 18: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

18

In the United States the corn, ethanol and livestock sector have cooperated with each

other in a well-succeed integration for more than one decade. Most cattle are fed with corn ethanol

by-products and finished in feedlots.

Regarding Brazil, the country is currently the second largest ethanol and beef producer

in the world, with sugarcane and cattle sectors representing important economic roles. Ethanol is

mostly produced annexed to sugar mills and cattle are mostly produced in extensive pastures using

a huge amount of land with low costs of production. Although sugarcane ethanol represents a

considerable decrease of GHG emissions compared to gasoline, this difference can be reduced due

to ILUC emissions. In addition, livestock production is the largest source of GHG emissions inside

the agricultural sector.

Sugarcane area should expand on degraded pasture, with improvement in cattle

management. New models of food and fuel production must meet both demand increase and the

COP 21 agreements, without causing deforestation. Sugarcane ethanol and cattle integration can

help decrease GHG emissions and avoid ILUC. This integrated model can sustainably increase

bioenergy production through intensification of cattle production.

Page 19: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

19

2 OBJECTIVE

The objective of this project is to assess the techno-economic and environmental

feasibility of sugarcane ethanol and cattle integration.

2.1 Specific Objectives

• Scenarios definition of sugarcane ethanol and beef cattle integrated systems

• Virtual simulation of sugarcane agricultural steps

• Virtual simulation of cattle production

• Virtual simulation of ethanol plant industrial steps

• Techno-economic evaluation of integrated scenarios

• Life Cycle Assessment of integrated scenarios to assess GHG emissions

Page 20: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

20

3 LAND USE AS A MAJOR ROLE IN THE FUTURE SCENARIOS OF FOOD AND

ENERGY PRODUCTION IN THE WORLD

Global warming is a worldwide discussed issue and during the 21st Climate Conference

– COP 21, which happened in Paris, 2015, representatives from all over the world committed to

decrease GHG emissions until 2050 to slow down temperature increase. Each country established

domestic goals to achieve the greater cause.

World population will achieve 9 billion people in a few decades, mainly in developing

countries with higher population density. This population growth will be concentrated in urban

areas (70% of population) with higher income levels, which helps increase consumption patterns

of food and energy (FAO, 2009). The global demand increase of food, fiber, feed and energy will

pressure land use and consequently environmental issues (POPP et al., 2016).

Part of the world’s action to decrease GHG emissions is replacing fossil fuel by

renewable energy and bioenergy. However, the world still is most dependent on fossil fuel energy

sources as coal, oil and natural gas. Bioenergy from biological sources is growing and nowadays

bioenergy represents the largest share in the renewable energy matrix (IEA; FAO, 2017).

Bioenergy plays a major role on the decarbonization needed to achieve COP 21

agreements. Its growth is a trend and will keep increasing to replace fossil fuels. Regarding

bioethanol production, the United States are the largest ethanol producer, followed by Brazil

(CORTEZ, 2010). In 2016, Brazil produced 28 billion liters of ethanol, behind 58 billion liters

produced by the United States (RFA, 2016). Most of this ethanol is blended to gasoline in Otto

cycles vehicles (CORTEZ, 2010).

According to the Center for Strategic Studies and Management Science, Technology

and Innovation (CGEE, 2009b) gasoline demand worldwide will increase around 48% until 2025

from 1.2 trillion liters to 1.7 trillion liters. Adopting the 5% of Brazilian sugarcane ethanol blend

in gasoline in global scale, considered in CGEE (2012), there would be a 102 billion liters demand

of ethanol. To meet this demand, additional 17 million hectares would be necessary to produce

sugarcane in Brazil (CGEE, 2012). Adopting 10% mandatory ethanol blend for global gasoline,

there would be the necessity to increase sugarcane additional area to 24 million hectares

considering currently technology and yields of production (CGEE, 2009b).

Page 21: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

21

Other studies estimate ethanol demand increase considering integrated production

and/or pasture intensification as potential alternatives. Cortez (2016) states bioenergy production

is increasing in order to meet COP 21 agreements and pasture land use intensification is releasing

area for food and energy production, through cattle stocking rate intensification.

3.1 Environmental Aspects of Biofuel Production

Land use management can play a major role in the GHG mitigation and an established

carbon market could decrease LUC (BERNDES et al., 2016). Currently land use and land use

change are responsible for around 25% of global GHG emissions (POPP et al., 2016).

Biofuels are expected to contribute to decrease GHG emissions and replace fossil fuel.

However, its production can lead to LUC and ILUC due deforestation (VALIN et al., 2015).

According to the author, this ILUC conversion can release CO2 to the atmosphere since each crop

has a different carbon stock on the soil, and these emissions started to be included in GHG balance

of biofuels.

According to the European Commission (2015a), biofuels must decrease GHG

emission in 35% to be considered sustainable; this target rises to 50% in 2017 and rises again to

60% in 2018. This sustainability includes life cycle since cultivation, processing and transport; in

addition, biofuels cannot be planted in areas with high carbon stock, with high biodiversity land

and cannot be produced from raw materials obtained from land with high biodiversity such as

primary forests or highly biodiverse grasslands (EUROPEAN COMMISSION, 2015a).

The Environmental Protection Agency – EPA affirmed sugarcane decreases 61% of

GHG emission compared to gasoline (CORTEZ et al., 2016) against 90% reduction reported by

Sousa and Macedo (2010). This difference is because EPA accounts LUC and ILUC emissions.

However, even if ILUC factor is calculated, Brazilian sugarcane ethanol still is the only one which

meets RFS criteria of “Advanced Biofuel” (CORTEZ et al., 2016).

Regarding land use trends, some studies under development funded by FAPESP (São

Paulo Research Foundation) are evaluating potential and available areas to produce biofuels

without compromising food production: LACAf (potential areas in Latin America, Caribbean and

Africa to produce sugarcane ethanol) coordinated by Luis Augusto Barbosa Cortez, from School

of Agriculture Engineering – FEAGRI/UNICAMP; and Global Sustainable Bioenergy Initiative:

Page 22: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

22

Geospatial & environmental analysis of pastureland intensification for bioenergy (pasture

intensification) coordinated by John Sheehan from Colorado State University. Most of available

land to produce biofuels are in degraded pastures or low stock rates pastures and, in Brazil, most

of the sugarcane expansion had already happened in pasture lands (CORTEZ, 2010).

In general, the future trend is to recover pasture land and intensify cattle stocking rate

to release area to crops production (GTPS, 2016). From the 13 billion hectares of land in the world,

around 26% are pasture and meadows and only 1% are crops. Total agriculture area represents 4.9

billion hectares divided as Figure 1.

Figure 1: World Agricultural Land in 2013 in billion hectares

Source: WORLD BIOENERGY ASSOCIATION (2016)

Berndes et al. (2016) state that the released pasture area from intensification could

accommodate expansion of crops production and decrease deforestation. According to the authors,

pasture intensification is possible with improvement in land productivity; the improvement in meat

and dairy production is essential to release area for bioenergy crops since most of available land

for bioenergy production is currently used as extensive pasture.

Using pasture land to plant bioenergy crops has the advantage of emitting less GHG

emissions than forest conversion for crops, however it can lead to more ILUC if no pasture

improvement occurs to support higher cattle stocking rates capacity (BERNDES et al., 2016).

Page 23: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

23

In Brazil, the Energy Research Company (EPE, 2016) estimates food production will

increase more than area increase due to new models of production, crop productivity and cattle

stocking rate increase; pasture area will decrease, releasing land to food and bioethanol production.

According to Vale (2014) and Latawiec et al. (2014), pasture intensification in Brazil is a viable

way to increase agriculture production and spare land, and consequently causing no deforestation

or ILUC.

Brazil is the 5th largest country considering territorial extension, with 851 million

hectares or 8,515,767 km2 (IBGE, 2013). The area is divided in forests, legal reserves, permanent

preservation, urban and agriculture areas (Figure 2).

Figure 2: Land use in Brazil

Source: EMBRAPA (2016)

After forests, pasture area represents the largest amount of land used in Brazil. Close

to 20% of Brazilian territory is used as pasture and only 1% for sugarcane. Sugarcane is the third

largest crop area in Brazil, with around 9 million hectares (CONAB, 2017).

According to Alkimim; Sparovek; Clarke (2015), Brazil has nearly 112 million

hectares of cultivated pastures, from which 24 million hectares are conditionally suitable, 37

million hectares has low suitability, 14 million hectares are moderately suitable and 36 million

Page 24: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

24

hectares are highly suitable for sugarcane production. These moderately and highly suitable areas

are located in Goias, Mato Grosso, Pará, Paraná, São Paulo, Mato Grosso do Sul and Minas Gerais

States and represent 50 million hectares, about five times more than the current sugarcane area.

Sugarcane expansion on pasture land has a huge role in GHG mitigation in Brazil. If

the country had an improvement in cattle stocking rate, a lot of pasture land would be available to

additional crop production without causing deforestation and ILUC emissions (ALKIMIM;

SPAROVEK; CLARKE, 2015).

Regarding GHG emissions, Brazil emitted around 2.3 billion tons of CO2 eq in 2016

(SEEG, 2017). The highest emissions come from forest and land use change (Figure 3), followed

by agriculture emissions, both led by Mato Grosso State, and energy sector emissions led by São

Paulo State.

Figure 3: Brazilian CO2 eq emission by sector

Source: SEEG (2017)

Energy emissions due to fuel combustion represented 17.5% of total emissions, while

livestock emissions, due to enteric fermentation plus manure management emissions, represented

15.2% of total emissions (SEEG, 2017). Considering that, sugarcane-ethanol and cattle integration

can increase biofuel production without pasture displacement, without ILUC while also

contributing with Brazilian obligations in the COP 21 agreements.

Page 25: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

25

In the COP 21 agreements, Brazil established a 43% decrease of GHG by 2030 and

incorporating 45% of renewable fuels in the energy matrix (year 2005 as baseline); also, to decrease

illegal deforestation in the Amazon forest; recover 12 million hectares of deforested areas; recover

15 million hectares of degraded pasture and insert 5 million hectares of livestock-crop-forest

integration.

Taking this into account, sugarcane ethanol and beef cattle integration can help

decrease emissions from the 3 largest sectors of GHG emissions in Brazil (forest and land use

change, agriculture and energy). With integration, less land is used to finish cattle (in feedlots) and

sugarcane production can increase over pasture land without compromising beef production. Also,

the integration can decrease enteric fermentation emissions, due to the reduction of finishing cattle

cycle from around 12 months to 3 months; and as already stated, bioethanol decreases GHG

emission compared to gasoline.

3.2 Possible ILUC Caused by Sugarcane Expansion

According to Marin et al. (2016), 88% of the sugarcane expansion has occurred due to

frontier expansion and only 12% is related to yield increase. This expansion has occurred mainly

in pasture land (CORTEZ, 2010). However, using the Sugarcane Agroecological Zoning, it was

concluded Brazil has 64.7 hectares available to produce sugarcane and 37.2 million hectares to

expand on current pasture lands, without compromising native vegetation and forests areas

(MAPA, 2009). Sugarcane production increased land price, mainly in São Paulo State and pushed

cattle to other areas with lower land prices such as North region (CEDEBERG; MEYER; FLYSJO,

2009). When cattle production changes to Amazon forest areas, the so called ILUC occur (Figure

4).

The ILUC is a complex and highly debate topic, which is driven by different

approaches and methodologies that are not well established and totally accepted yet. ILUC

explanation relies on European Commission definition:

When biofuels are produced on existing agricultural land, the demand for food

and feed crops remains, and may lead to someone producing more food and feed

somewhere else. This can imply land use change (by changing e.g. forest into

agricultural land), which implies that a substantial amount of CO2 emissions are

released into the atmosphere (EUROPEAN COMISSION, 2012a, p.1).

Page 26: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

26

Figure 4: Representation of possible ILUC caused by sugarcane expansion on pasture land

Source: Elaborated by the author based on European Commission (2012b)

Cattle expansion in Brazil happened mainly in North and Midwest region, been one of

the causes of Amazon forest deforestation (IPAM, 2016). However, according to Martha Jr; Alves;

Contini (2012), frontier expansion to increase beef production happened only from 1950 to 1975;

expansion of extensive pasture occurred due to low opportunity costs and Governmental incentives

to develop the Cerrado biome and parts of Amazon forest, plus the need to secure land property.

Since 1975, the cattle production has increased due to productivity and genetic improvement, better

animal health and forage quality, better animal management practices and improved nutrition, but

without causing pasture land expansion. Currently, Amazon forest deforestation is driven by illegal

logging, lack of land tenure, deforestation of small area plots and deforestation due to indigenous

and rural settlements, with only relatively small part due to livestock and agricultural expansion

(GTPS, 2016).

Amazon forest deforestation is decreasing and compared to 1996-2005 period it

decreased in 75% due to surveillance, networking of civil society and government plus actions of

Page 27: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

27

stakeholders in agriculture (BERNDES et al., 2016). These stakeholders’ action in agriculture has

the demand certification for sustainable agriculture as incentive, which is growing in Brazil

(BERNDES et al., 2016). The increase in cattle productivity saved 525 million hectares from 1950

to 2006 (MARTHA JR; ALVES; CONTINI, 2012).

Brazil still has great potential to improve beef production even more adapting the

ethanol-livestock integration that happens successfully in the United States.

Page 28: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

28

4 BRAZILIAN MODEL OF SUGARCANE ETHANOL PRODUCTION

Sugarcane has been cultivated in Brazil since the colonial period, for over five

centuries. It was introduced in São Paulo State, but developed in the Brazilian Northeast region to

export sugar to Europe (CORTEZ et al., 2016). After coffee crisis in 1929, sugarcane was back to

São Paulo State.

Brazil was the first country to use ethanol in large scale. Primarily, gasoline was

blended to 2% of ethanol; after 1930 until 1975 this blend was 5% to 7%; and with the Proálcool

program (Brazilian program to decrease oil dependence in the 70s), the mandatory blend increased

to 10% plus hydrous ethanol vehicles development (CORTEZ et al., 2016). Nowadays ethanol

mandatory blend in gasoline is 27% according to Portaria nº 75 from March 5th 2015 from Ministry

of Agriculture, Livestock and Supply (BRASIL, 2015a).

Until 2007 Brazil was the world’s largest ethanol producer, being overpast by the

United States and its corn ethanol and livestock integrated way of production (RFA, 2016a).

Currently, Brazil is world reference in sugarcane technology (EPE, 2016). The country

is the largest sugarcane producer (657.18 million tons), the largest sugar producer (38.69 million

tons), second largest ethanol producer (27.9 billion liters) and exports about 50% of all sugar

consumed in the world (CONAB, 2017). Sugarcane is produced in majority in Center-South region

(São Paulo, Rio de Janeiro, Espírito Santo, Minas Gerais, Mato Grosso, Mato Grosso do Sul, Goiás,

Paraná States) (Figure 5). In Center-South region, sugarcane is harvested without burning (green

cane) and mechanically, straw is mostly left in field and bagasse is used mainly to produce

bioelectricity (CARDOSO et al., 2018; CAVALETT et al., 2012). Before Law N° 11.241, from

September 12th, 2002 (ASSEMBLEIA LEGISLATIVA DE SÃO PAULO, 2002), which prohibits

sugarcane burning, straw was burned.

São Paulo State is responsible for 56.3% of the Brazilian production of sugarcane,

62.4% of sugar and 49.5% of ethanol (CONAB, 2017). Furthermore, the State stands out in terms

of technology and investments in sugarcane-ethanol sector (CORTEZ, 2010).

Page 29: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

29

Figure 5: Sugarcane production in Brazilian Center-South region and in São Paulo State

Source: CONAB (2017)

Brazilian model produces both sugar and ethanol in annexed mills (Figure 6) in the

majority, with one of the lowest production costs in the world (CAVALETT et al., 2012; CORTEZ,

2016). According to Cortez (2010), 65-68% of costs come from sugarcane agricultural steps, 20-

25% from industrial steps and the other part comes from administrative costs.

9.0

72.6

657.2

38.7 27.85.7

76.5

436.0

28.1 16.54.8

77.5

369.9

24.1 13.7

Brazil Brazilian Center-South São Paulo State

Area (Mha) Productivity (t/ha) Sugarcane (Mt) Sugar (Mt) Ethanol (bi L)

Page 30: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

30

Figure 6: Brazilian annexed sugarcane plant diagram flow

Source: Adapted from Bonomi et al. (2016)

This model diverts 50-60% of sugarcane to sugar and 40-50% to ethanol production

(SALLES-FILHO, 2015), having 64% of mills annexed (produces ethanol and sugar) and only

38% producing only ethanol, which makes ethanol being generally dependent on sugar production

(CORTEZ, 2010). Ethanol and sugar prices are connected and varies according to international

market of sugar and gasoline; in 62% of annexed mills cases, sugar is more economically attractive

than ethanol (SALLES-FILHO, 2015).

Still according to Cortez (2010), a rapid expansion in ethanol production would need

to overcome this dependent sugar-ethanol model, which have worked up until now to meet

domestic market. Until now, sugar and ethanol production are growing together (Figure 7),

however if future demand of ethanol production achieves the predicted in CGEE (2009b) and sugar

Page 31: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

31

demand keeps growing only 2-3% a year (CORTEZ, 2010), how will ethanol production increase

without sugar following the same growth rate? What would be the new model of ethanol

production?

To meet global demand, a new model of ethanol production must be developed that

grows more than 2-3% a year that does not necessarily increase sugar production. The ethanol –

cattle integration could diversify the mixed model (sugar-ethanol) which has a trend to grow

together (Figure 7) and decrease the huge gap between the future prediction of sugar and ethanol

demand.

Figure 7: Brazilian ethanol and sugar production

Source: Adapted from UNICA (2016), CGEE (2009b) and Cortez (2010)

0

50

100

150

200

250

Ethanol (billion liters) Sugar (million tons)

Future prediction

Page 32: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

32

5 BRAZILIAN BEEF CATTLE PRODUCTION

Cattle were first introduced in Brazil in the 16th century. Later it started being raised to

produce beef, which continues until nowadays. Brazil is the second largest beef producer in the

world (Figure 8 ) (USDA, 2016a).

Currently, according to the Ministry of Agriculture, Livestock and Supply Brazil has

the second largest cattle herd in the world with 213 million heads (BRASIL, 2015b) and cattle

stocking rate of around 1.2 heads per hectare. The cattle sector is one of the main pillar of Brazilian

economy and has important economic role in exportation. In 2015, Brazilian Gross Domestic

Product (GDP) reached R$5.9 trillion, agribusiness represented 21% of GDP and livestock

represented 30% of agribusiness (BEEFPOINT, 2016).

Figure 8: Brazil and the world’s largest cattle producers in 2016 (thousand heads)

Source: USDA (2016a)

*India includes buffalo

In Brazil, Nelore breed is mostly used for beef production and the management system

varies among the regions (EMBRAPA, 2005). But it is usually predominantly extensive pasture

grazed all year long with a small fraction of beef finished in feedlots (FAO, 2006). Due to extensive

management with no advanced technology or proper management, Brazilian beef production has

one of the lowest costs (FERRAZ; FELICIO, 2010), but also lowest productivity rates per hectare

9284

11389

69007850

4250

26002075

Brazil US China Europe Union India Argentina Australia

Page 33: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

33

in the world (BOVIPLAN, 2015). Moreover, EMBRAPA (2014) estimates 50% of pasture land in

Brazil is hardly degraded, which means around 85 million hectares needs intervention.

Brazilian Midwest region (Mato Grosso, Mato Grosso do Sul and Goiás States) has the

largest pasture areas, cattle herds and slaughter rates (Figure 9). However, São Paulo State is also

important, being responsible for 13.4% of slaughtered heads in 2015 (IBGE, 2016b). The State also

has 4.8% of the Brazilian total herd (MAPA, 2015), and 3.1% of total Brazilian pasture area

(BEEFPOINT, 2016). Most of cattle is São Paulo is raised in semi-intensive systems and finished

in feedlots (EMBRAPA, 2011a).

Figure 9: Largest States in Brazil considering cattle herd (million heads), pasture land (million

hectares) and slaughter (million heads) in 2015

Source: BRASIL (2015b), IBGE (2016) and BeefPoint (2016)

There are 3 types of cattle enterprises in Brazil: cow-calf, backgrounding and stocker,

and finishing. It is possible to have the complete cycle that includes those 3 enterprises. Usually

calves and heifers are raised in pasture and fattening can occur in pasture or feedlots. In complete

cycle, cows represent 35% of the herd and calves 20% of the herd. The higher herd productivity,

the higher calves representation will be (EMBRAPA, 2011a).

Brazil has different types of climate and soil and the 3 enterprises mentioned before

can be managed in different systems: extensive, semi-intensive and intensive, which can also be

intensive-irrigated.

29.2

22.4

4.5

20.4

14.4

3.4

23.9

14.7

2.8

21.8

15.1

3.0

20.8 20.7

2.6 3.0

Cattle Herd (Mhds) Pasture Land (Mha) Slaughter (Mhds)

Mato Grosso Mato Grosso do Sul Minas Gerais Goiás Pará São Paulo

Page 34: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

34

One important point to consider about the decision for the management system is the

forage stocking capacity. Forage is a grassy, which can be native or planted in pasture land to feed

cattle. Forage ingestion per animal per day is around 2.5 to 3.0% of their live weight (EMBRAPA,

2011a). The forage quality impacts cattle stocking rate and it also varies significantly between wet

and dry seasons. Tropical forages produce 75% of their total stocking capacity during wet season

(November until April) and 25% during dry season (May until October) (EMBRAPA, 2011a).

Andropogon gayanys cv. Planaltina forage can handle 1.6 animals per hectare during wet season

and 0.5 per hectare during dry season. In the soils of the Cerrado biome, during dry season,

Brachiaria humidicola, Brachiaria decumbes and Brachiaria brizhanta cv. Marandu species of

forage handle 1 animal per hectare (EMBRAPA, 2011a).

Usually, in São Paulo State, forage can handle 2.8 animal units (450 kg of live weight)

per hectare during the wet season with an average daily gain (ADG) of 0.8 kg/hd; and 1:1 during

the dry season, with ADG of 0.4 kg/hd (EMBRAPA, 2011a). During dry season, cattle need feed

supplementation to avoid losing weight, or can be finished in feedlots.

Extensive management is characterized by native or cultivated pastures as exclusive

feed; almost no management; natural reproduction; low birth rate (SALOMONI, 1983). Semi-

Intensive management has a better productivity per hectare compared to extensive system. And

intensive management has technologies application; higher productivity and usually finish cattle

in feedlots.

According to EMBRAPA (2011a), in feedlots, the feed costs must be economically

feasible and feed formulation must respect 1.5 kg of fat or 60% grain maximum, due to Zebu breed

restriction to high grain diet formulation. Feedlots average size varies from 100 to 3,000 animal,

but “cattle hotels” can feed 70,000 heads per year (EMBRAPA, 2005b). “Cattle hotel” is a feedlot

business that charges daily rates according to initial weight and animal sex, in exchange of cattle

fattening.

In feedlots, finishing time varies from 60 to 110 days (240 days in premature system)

(EMBRAPA, 2005b). Average initial weight is around 350 kg (220kg premature system) and final

weight around 470 kg, aging 24 to 36 months (only 12 months in premature system) (EMBRAPA,

2011a). Cattle finished in feedlots are increasing year after year; from 2001 to 2015, there was an

Page 35: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

35

increase from 2.06 to 5.05 million heads (ABIEC, 2016), which represent 13% of total heads

slaughtered (BEEFPOINT, 2016). In Table 1 there is a summary of Brazilian cattle management.

Table 1: Brazilian cattle management

Parameters Extensive Semi-Intensive Intensive Finished

Feedlot

Daily Intake (% LW) 2.0 – 2.5 2.0 – 2.5 2.0 – 2.5 2.0 – 2.5

Slaughter Age (months) 42 32 – 36 14 –24 12 – 24*

Daily Gain (kg/hd) 0.2 – 0.4 0.4 – 0.6 0.6 – 1.0 1.0 – 1.8

Stocking Rate (hd/ha) 0.3 – 1.0 1.0 – 2.0 2.0 < 4.0 –

Carcass Yield (%) 52.3 – 55.0 52.3 – 55.0 52.3 – 55.0 52.3 – 55.0

Productivity (kg/ha.y-1) 60 –120 240 – 600 600 –1200 <1200

Pasture Management Almost none Fertilization Fertilization,

irrigation –

Feed Pasture, Mineral

Salt Pasture, Feed Pasture, Feed Feed

Source: BOVIPLAN (2015), BeefPoint (2016) and EMBRAPA (2005b).

*Depending on initial age.

According to EMBRAPA (2011a), the majority of Brazilian cattle is born during dry

season, mainly in August and September and weaning happens from 6 to 7 months beginning in

March and April. The reproduction season is during rainy months from November to December,

ensuring best forage qualities for pregnant and weaning cows. Reproduction is mainly natural,

however there isn’t the genetic improvement provided by artificial insemination. Being born during

dry season avoids diseases as pneumonia and parasites such as infestation of ticks, flies and worms.

Brazilian slaughter age is decreasing. In 1997, 52.18% of cattle were slaughtered after

36 months, in 2007 this number decreased for 11.30% and in 2015, it was only 6.94% (ABIEC,

2016). Most of cattle have been slaughtered from 15 to 36 months, weighting 250kg of carcass

weight equivalent (CWE) (IBGE, 2016b).

According to BeefPoint (2000), until the year 2000, cattle production was losing space

for sugarcane due to lack of profitability, low stocking rate (around 0.7 animal units per hectare)

and low land remuneration mainly in São Paulo State.

Page 36: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

36

5.1 Other Cattle Producing Countries

The United States, Argentina and Australia are among the largest beef producers in the

world and have integrated production systems with grain fed diets.

The United States has the largest beef and veal production in the world (USDA, 2016a).

There are around 48.7 million hectares used as pasture (USDA, 2013), which is always the primary

feed (FAO, 2011). Cattle is raised in extensive pastures in South and integrated to corn-ethanol

chain and finished in feedlots in the Midwest. The majority breed is British breeds (Bos Taurus)

and beef production is divided into three main enterprises: cow-calf, back grounding and stocker

and finishing (FAO, 2011a). The country production meets domestic consumption, with only 10%

of total production to exportation (USDA, 2016c). Among the largest beef producers, the country

has the highest slaughter weight: about 620 kg of live weight or 379 kg of CWE (USDA, 2017).

Australian beef production is divided in extensive pastures in the North, with Brahman

and derived breeds; and more intensified pastures in the South, using British breeds (USDA,

2016c). About 2/3 of Australian cattle is finished in pasture, because it is more economically

feasible than feedlots with grains. However, finishing in feedlots is a growing trend to meet Asian

demand for marbled meat (USDA, 2016b). Only 1/3 of cattle production is for domestic demand

and the rest is exported (USDA, 2016b). Slaughter weight is about 320-350 kg CWE; in the South

(intensive) it takes 2.0 to 2.5 years to achieve the slaughter weight and in the North (extensive) 4.0

to 4.5 years (FAO, 2009b).

In Argentina, both grass fed (pasture) and grain fed (feedlots) management are

common, however, finishing in feedlots is becoming more popular, representing about 70 to 80%

of slaughtered heads in 2015 (USDA, 2015). British breeds are common in the Central area of

Argentina and Brahman breeds in warmer areas (USDA, 2016b). Slaughter weight is around 320-

380 kg and production costs are 15% higher than Brazilian costs (USDA, 2016b). In Argentina,

85% of beef production is to meet the domestic demand. The country has one of the highest red

meat consumption of the world, 56 kg per capta per year (USDA, 2016b).

Page 37: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

37

6 INTEGRATION MODEL: THE UNITED STATES

There is an integrated system working in synergy among corn, ethanol and cattle

producers (Figure 10) in the United States. The three markets are independent but have been

cooperating for more than a decade (CONROY et al., 2016a).

Figure 10: Corn ethanol and livestock integrated production in the US

Source: Elaborated by the author

The US meet their local demand of animal feed, the Distillers Grains with Solubles

(DGS), and also export. About 50% of DGS are produced for local demand, 25% exported to China,

Japan, South Korea and others and the other 25% to feed poultry and hog (IBC, 2014). Corn ethanol

and DGS production are connected and have experienced a significant growth since 2000.

However, the growth rate decreased after 2011 (Figure 11) maybe due to livestock saturation for

feed demand. Considering a future prediction, what happens if livestock sector gets completely

saturated of corn-ethanol by-products? What will be the new model for the United States?

Page 38: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

38

Figure 11: US corn ethanol and DGS production along years

Source: RFA (2016a)

The integration with cattle production is possible because of corn ethanol by-products

nutritional value as animal feed, which have energy value 30% higher than corn grain (ERICKSON

et al., 2005).

DGS represent up to 40% (DM) of feed composition and provides higher daily gains

than diets with only corn (CONROY et al, 2016b). The proportion of DGS on cattle feed is defined

based on its price, which is influenced by corn price, transportation costs, domestic and

international demand (WATSON; LUEBBE; ERICKSON, 2016).

6.1 Corn Ethanol Production in the US

Ethanol market started in 1990 in the United States because of the Clean Air Act

Amendment (when ethanol should be blended to gasoline), plus tax reduction and credits to

producers (SPAROVEK, 2009).

Nowadays, the US is the largest ethanol producer in the world with 57.9 million liters

produced in 2016 (RFA, 2016a) and exports 5.4% to more than 50 countries (RFA, 2016b). The

ethanol industry is responsible for a great part of global animal feed, producing around 50 million

tons of feed annually (RFA, 2016b).

0

10

20

30

40

50

60

70

80

DGS (million tons) Ethanol (billion liters)

Future prediction

Page 39: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

39

Ethanol and by-products are produced from corn through dry-grind and wet-grind

processes, being the first one more commonly used (USGC, 2012). In dry-grind, each corn bushel

(25.4 kg) produces about 10.5 liters of ethanol, 7.7 kg of DGS and carbon dioxide (IBC, 2014).

The whole corn grain is ground, ethanol is the main product and DGS are co-products. Corn goes

through moisture and contaminant analysis at the plant, grinding, slurry and liquefaction (Figure

12). The fermentation can happen through batch or continuous process. The two products of

distillation are anhydrous ethanol and whole stillage, that is centrifuged. In centrifugation, the

solids, fibers, proteins and fats are separated resulting in coarse solids and thin stillage. Coarse

solids are dried in different percentages according to market demand resulting in Distillers Grains;

the thin stillage is evaporated resulting in the Solubles. Mixing both Distillers Grains and Soluble

it is obtained the Distillers Grains with Solubles DGS, thereby used as animal feed (USGC, 2012).

According to the University of Nebraska and the Iowa State University Animal Science

Departments, DGS from dry-grind are divided in three types, varying moisture content:

Wet Distillers Grains with Solubles (WDGS): 30-35% DM, 130% energy content

compared to corn. The best co-product to feed cattle and it has the highest energy content among

the others. Mostly used in the United States, having better animal performance. However, it is too

perishable, hard to handle and store and it is not feasible to export.

Dried Distillers Grains with Solubles (DDGS): 90% DM, used mainly to feed dairy

cattle, poultry, swine and to exportation. It has more protein compared to Wet Distillers Grains

with Solubles (WDGS).

Modified Distillers Grains with Solubles (MDGS): 45-55% DM, less expensive than

DDGS, less perishable than WDGS.

Other by-products from corn such as stover, MOG (material other than grain) are used

as fiber source to animal feed during growth period.

Page 40: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

40

Figure 12: Dry-grind process for corn ethanol production

Source: Adapted from Erickson et al. (2005)

In wet-grind (Figure 13), corn grain is separated in different fractions and there are

other products besides ethanol, such as corn oil and corn sugar. Co-products from wet-grind are

also used as animal feed, however in different composition and fat content than DGS (IBC, 2014).

Page 41: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

41

Figure 13: Wet-grind process for corn ethanol production

Source: Adapted from Erickson et al. (2005)

According to IBC (2014), corn oil was not extracted some years ago, nowadays, about

85% of ethanol plants are extracting oil for the production of biodiesel and for the food industry.

This oil extraction decreases energy and fat content of corn ethanol by-products, which decreases

cattle performance.

Page 42: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

42

7 REAL CASES OF ETHANOL-CATTLE INTEGRATION IN BRAZIL

Sugarcane ethanol and cattle integration using ethanol by-products as cattle feed was

common in Brazil during the 1980s and 1990s, primarily in São Paulo State, usually with feedlots

annexed to ethanol plants; there were around 120 cases (SPAROVEK; MAULE; BURGI, 2008).

Nowadays, due to competition for bagasse to bioelectricity production, this integrated system is

not so common as it used to be, however there are successful cases of integration still operating.

Vale do Rosário Mill and Usina Estiva mill are two real cases of integration still functioning in São

Paulo State.

The Vale do Rosário mill belongs to BIOSEV group, one of the largest sugarcane

processing plants in Brazil, and it is located in Morro Agudo city in the State of São Paulo. The

plant has an annual processing capacity of 6.5 million tons of sugarcane (BIOSEV, 2015). Their

feedlot functions as a hotel to finish cattle from other properties around the plant, properties which

are rented to produce more sugarcane. In 2010, 163 cattle producers finished about 20,000 heads

in this feedlot and, in 2008, it had been better: 30,000 heads (PORTALDBO, 2011). The feed using

80% of sugarcane by-products (in natura bagasse, hydrolyzed bagasse, molasses and wet yeast) is

about R$ 100 cheaper (per tonne) and more efficient than traditional ones, with an ADG of 1.6 kg

(BIOSEV, 2014). According to technical visits to Vale do Rosário plant, they have been doing this

integration for more than 25 years.

Usina Estiva mill has been integrating for about 18 years (USINA ESTIVA, 2015a).

The plant has an annual processing capacity of 2.8 million tons of sugarcane (USINA ESTIVA,

2015b) and the feedlot created in 1999 has 11,000 heads of static capacity and about 20,000 heads

per year. Integration happens by using feed to finish cattle composed by 50% of sugarcane by-

products: in natura bagasse, hydrolyzed bagasse, molasses and wet yeast, and using the manure as

crop fertilizer. Through this production model they have a better cattle performance (better average

daily gain), which is 15% higher than the national average, less 20% of the total cost and avoid

expanding 12,000 hectares per year necessary to produce the same amount of cattle without

integration. This extra area is used to produce more sugarcane (USINA ESTIVA, 2015a).

Besides real cases of integration, there are some studies regarding this integrated model

using ethanol by-products (molasses, dry or wet yeast, in natura and hydrolyzed bagasse) as cattle

feed.

Page 43: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

43

Taube-Netto et al. (2012) optimized integrated production using mathematic models

based on data from real cases of integration and considering sugarcane ethanol by-products as cattle

feed. The study considers a 2-million-tonne capacity mil which used 10% of bagasse (in natura

and hydrolyzed) plus soybean and corn to feed cattle. There were 28,000 hectares to sugarcane

production used to restore degraded extensive pastures, with corn and soybean crop rotation and

29,988 hectares as pasture. The integration increased 51% meat production compared to non-

integrated system and improved profitability. In their study, 18 million hectares of degraded pasture

could be released to agriculture.

Sparovek (2009) considered different managements (beef and dairy cattle) and

different feed composition, mainly composed by sugarcane ethanol by-products (hydrolyzed

bagasse, in natura bagasse, vinasse, yeast, molasses, filter cake, molasses) and grains. In his study,

even considering a 25% net revenue of the sugarcane plant, the feed production was economically

feasible. In the Sparovek (2009) study the models considered a plant with 1 million tonne capacity

and 15,000 hectares of sugarcane. The investments to produce cattle feed were two bagasse

hydrolyzers and one feed mixer. The plant produces 40,000 tons of feed per year, around US$ 38

per tonne. According to his study, using bagasse to produce feed is more viable economically than

to produce energy. The limitations are feed market, plant capacity and feed perishability, having a

viable distance around 30 and 40km radius from ethanol plant to feedlot.

In the sugarcane ethanol-cattle integration model, not only biofuel is produced

(ethanol) but also feed (by-products for cattle), food (sugar for humans) and energy (electricity)

(Figure 14).

Page 44: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

44

Figure 14: Production model of sugarcane ethanol and cattle integration

Source: Elaborated by the author

7.1 Potential of Sugarcane Ethanol By-Products as Cattle Feed

As in the United States, the sugarcane ethanol-livestock integration is only possible

due to ethanol by-products nutritional value and capacity to digest cellulose and hemicellulose of

ruminant animals. Bovine can digest and convert not only forage into nutrient, but also crop

residues, by-products from food, fiber and fuel production (NATIONAL ACADEMIES OF

SCIENCES, ENGINEERING AND MEDICINE, 2016). Considering this, cattle can be fed with

sugarcane-ethanol by-products.

Among potential sugarcane ethanol by-products to compose cattle feed are: bagasse,

yeast and molasses. Bagasse is a fiber source and has a proportion of 280 kg per tons of sugarcane

(CHIEPPE JR., 2012). In Brazil, sugarcane bagasse is burnt to produce electricity and it started

being used to produce second generation ethanol (BNDES; CGEE, 2008). To compose cattle feed,

bagasse needs to be pretreated to increase digestibility (BNDES; CGEE, 2008). Yeast is a protein

source, composed by 62% of protein; and molasses, which has high energy content, is produced in

a proportion of 40 to 60 kg per tonne of sugarcane (CHIEPPE JR., 2012). Cattle producers have

been using sugarcane, sugarcane silage and ethanol by-products to supplement cattle during dry

season for a long time (EMBRAPA, 2002). Their nutritional value have been studied for many

authors: Sparovek; Maule; Burgi (2008), Lacorte; Bose; Ripol (1989), Magalhães; Vasquez; Silva

(1999); Ezequiel; Galati; Mendes (2006) and EMBRAPA (2002). In Table 2 the average nutritional

values of ethanol by-products from sugarcane and corn are presented.

Page 45: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

45

Table 2: Sugarcane and dry-grind corn ethanol by-products

Source: CQBAL (2017) database, National Academies Of Sciences, Engineering And Medicine

(2016) and EMBRAPA (2011b)

7.2 Sugarcane Ethanol and Beef Cattle Integration in Brazil

Brazil can follow and adapt the United States integration model regarding ethanol and

cattle production. According to Sparovek; Maule; Burgi (2008), the integration is possible with

small adaptation in plants to hydrolyze bagasse and to fractionate part of sugarcane ethanol by-

products (bagasse, yeast, molasses) to compose the animal feed . The author also states this model

needs public intervention to support ethanol plants adaptation and collaboration, and acceptance

from cattle and sugarcane parts. The integration could provide feed during the dry season, thereby

increasing the stocking rate and land use intensification (SPAROVEK, 2009).

Sugarcane ethanol and cattle integration can avoid ILUC emissions linked to biofuels

production because of its potential as cattle feed. The integration allows feeding cattle heads in

feedlots, thereby avoiding pasture displacement to other areas. The released pasture area is used to

Feed DM

(%)

TDN

(%)

FAT

(%)

CP

(%)

NDF

(%)

ADF

(%)

Lignin

(%)

Sugarcane Ethanol By-Products

Hydrolyzed

Bagasse 40.32 54.62 0.61 1.37 60.48 55.53 12.88

In Natura Bagasse 57.17 42.89 1.19 2.14 85.22 58.02 12.65

Dry Yeast 89.00 80.00 1.50 34.00 1.00 - -

Wet Yeast 23.00 80.00 1.50 34.00 1.00 - -

Molasses 74.00 5.00 72.00 - 80.00 - -

Corn Ethanol By-Products

MDGS 47.83 93.0 10.22 29.08 28.73 14.81 -

WDGS 31.44 98.0 10.84 30.63 31.52 15.27 4.70

DDGS 89.99 89.0 10.73 30.79 33.66 16.17 -

Solubles 30.89 98.0 16.85 18.94 4.71 3.81 -

Page 46: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

46

produce additional sugarcane. Integration can also be a new option for the sugar industry,

diversifying its product portfolio.

Considering its distance from the Amazon, São Paulo State in particular is well-

positioned to apply this integrated model (Figure 15) to decrease pressure on the forest from cattle

production. In addition, the State is the largest sugarcane producer in the country, 52.3% of the

Brazilian production in 4.5 million hectares (CONAB, 2017); and already has an improved cattle

management with 10.3 million cattle heads in 5.2 million hectares (BEEFPOINT, 2016), so it is

possible to integrate both systems in a sustainable way. Both sugarcane plants and cattle herd

location are feasible for the integration (Figures 16 and 17). In Figure 17, the cattle herd location

is divided in EDAs (Office of Agricultural Defense of São Paulo) and not per municipality,

according to the methodology used by the Institute of Agricultural Economics (IEA).

According to Cortez (2016), this integrated model could also participate of a Clean

Trade Mechanism with Low Carbon Footprint, where products with higher GHG emission would

have a higher tax.

Page 47: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

47

Figure 15: Location of Amazon forest, cattle herd and sugarcane plants in Brazil

Source: Made by the author based on CTBE (2017) and IBGE (2015)

Page 48: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

48

Figure 16: São Paulo State mapping of sugarcane plants

Source: (BRASIL, 2015c)

Figure 17: São Paulo State mapping of cattle herd

Source: (IEA, 2016a)

Page 49: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

49

8 METHODOLOGIES

RESEARCH SUPPORTED BY CTBE – BRAZILIAN BIOETHANOL SCIENCE

AND TECHNOLOGY LABORATORY, CNPEM/MCTIC THROUGH UTILIZATION OF THE

VIRTUAL SUGARCANE BIOREFINERY (VSB) FACILITY.

To analyze possible integrated scenarios it is necessary to simulate them using models

(POPP et al., 2016). For the sugarcane ethanol and beef cattle integrated scenarios studied here,

simulations were performed with the Virtual Sugarcane Biorefinery (VSB) (BONOMI et al., 2016).

The VSB was developed by Brazilian Bioethanol Science and Technology Laboratory (CTBE), a

framework to simulate the agricultural, industrial and use phases of sugarcane production chain as

well as to perform economic, environmental and social assessment of biorefinery alternatives

(BONOMI et al., 2016).

The VSB was used to generate data from agricultural and industrial steps. The

agricultural steps include types of harvesting and planting, transport stages, agricultural operations,

machinery, implements, labor, agrochemicals, and fertilizers, among others. The industrial steps

include mass and energy balances to evaluate different technologies inside the biorefinery.

8.1 Data Collection

Data were collected from literature and from real cases of integration in São Paulo State

to define the scenarios simulated.

For the agricultural (Figure 18) and industrial steps (Figure 19) of sugarcane

production, data are from VSB database (BONOMI et al., 2016). For the cattle production, data

are from Anualpec 2015 (2015) and BOVIPLAN (2015). The cattle emissions data are from IPCC

(2006), Figueredo et al. (2016) and Ecoinvent database. More details of economic and

environmental inputs for cattle production are in Annex 1.

Page 50: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

50

Figure 18: Sugarcane agricultural steps diagram

Source: Bonomi et al. (2016)

Figure 19: Ethanol plant industrial steps diagram

Source: Bonomi et al. (2016)

Page 51: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

51

8.2 Scenarios Definition

Boundary Conditions:

All scenarios consider the same 200,000 hectares of production in São Paulo State

(legal reserve and sugarcane seedlings area were not included).

➢ Sugarcane: all scenarios consider 4Mt sugarcane milling capacity and 1G ethanol production

in annexed plants, inside 50,000 hectares. The plants use 50% of sugarcane juice for sugar

production and 50% of sugarcane juice plus molasses for ethanol production. The industrial

and agricultural steps are the same, varying only by-product’s splits in the plants with feed

production. The agricultural scenarios consider 50% of straw recovery (CARDOSO et al.,

2018) that is burnt together with bagasse to produce electricity. Sugarcane productivity

considered is 80 t/ha.y-1 and 200 days of season. The plant without feed production produces

53.5 l ethanol/tc and 51.4 kg sugar/tc. The plant with feed production produces 53.2 l

ethanol/tc and 51.4 kg sugar/tc. For feed production, hydrolysis of bagasse is steam

explosion, carried out at 200°C and 10 minutes of residence time.

➢ Cattle: Nelore breed, considering only fattening management. Initial weight is 360kg and

final weight is 480kg. When in pasture, the same stocking rate of 1 animal per hectare is

considered, ADG is less than 0.4 kg/hd.day-1 (BOVIPLAN, 2015) and slaughter time of 365

days. When in feedlots, it is considered 500 heads per hectare, with ADG around 1.0

kg/hd.day-1, ADI of 21.9 kg/hd.day-1 (CGEE, 2009a) and slaughter time of 120 days. The

feed is composed by ethanol by-products and others according to CGEE (2009a). Stocking

rate capacity is represented by “d” in Figures 20, 21, 22, 23, 24 and 25. Pasture area after

intensification is given by “Ap”. The relation between cattle area and sugarcane area is given

by the equation 1:

Equation 1: Relation between cattle area and sugarcane area

r = Ac/Api (1)

where:

Ac = Sugarcane Area

Api = Initial Pasture Area

Page 52: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

52

Scenario 0 (Without sugarcane): It is defined as basis for comparison. Cattle is raised on an

extensive management, in 100% of the area (Figure 20), grazing all year, with mineral salt

supplementation.

Figure 20: Scenario 0

Scenario 1 (With sugarcane and ILUC): Sugarcane is introduced in 25% of area (Figure 21), and

25% of cattle heads are displaced for forest area. Considers ILUC emissions for 50,000 hectares,

accounted for ethanol plant. Cattle management keeps the same as in Scenario 0.

Figure 21: Scenario 1

Scenario 2 (1st step of integration, without ILUC): Those 50,000 heads displaced in Scenario 1

are back inside the 200,000 hectares (Figure 22) and finished in feedlot with feed composed by

ethanol by-products. Feedlot area represents only 0.05% of total area.

Figure 22: Scenario 2

Scenario 3: 50% of the total area is for sugarcane (Figure 23), now there are two ethanol plants

with 4Mt milling capacity each. The number of heads that would be displaced (100,000 heads) are

finished in feedlots with feed composed by ethanol by-products. Feedlot still is relatively small,

representing only 0.10% of total area.

Page 53: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

53

Figure 23: Scenario 3

Scenario 4: 75% of the total area is for sugarcane (Figure 24) and there are three ethanol plants

with 4Mt of milling capacity inside the 100,000 hectares. The 150,000 heads that would be

displaced are finished in feedlots with ethanol by-products feed. Feedlot area represents 0.15% of

total area.

Figure 24: Scenario 4

Scenario 5: 100% of pasture area is used for sugarcane production (Figure 25). All cattle heads

are finished in feedlots with feed composed by ethanol by-products. There is no more pasture land.

Even with all cattle heads finished in feedlots, feedlot area represents only 0.20% of total area.

Figure 25: Scenario 5

Table 3 presents a summary of the 6 scenarios defined according to the specification

reported above.

Page 54: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

54

Table 3: Scenarios definition

Scenario

0

Scenario

1

Scenario

2

Scenario

3

Scenario

4

Scenario

5

Number of plants - 1 1 2 3 4

Milling capacity (Mt) - 4.0 4.0 4.0 4.0 4.0

Straw Recovery (%) - 50 50 50 50 50

Total Sugarcane

Area (10³ha) - 50 50 100 150 200

Pasture heads 200,000 200,000 150,000 100,000 50,000 -

Stocking Rate (hd/ha) 1.0 1.0 1.0 1.0 1.0 1.0

Pasture Slaughter

time (days) 365 365 365 365 365 -

Mineral Salt (%LW) - 0.1 - - - -

Feedlot heads - - 50,000 100,000 150,000 200,000

Feedlot slaughter

time - - 120 120 120 120

Feed (kg/hd.day-1) - - 21.91 21.91 21.91 21.91

Carcass Yield (%) 53 53 53 53 53 53

LW: Live Weight

The ethanol plants of this work are based on an optimized distillery used as a baseline

in the VSB (Table 4) and adapted to separate a portion of the by-products (bagasse, molasses and

bleed yeast) to produce animal feed in scenarios 2, 3, 4 and 5. Hydrolyzed bagasse is obtained

using steam explosion with 200°C and 10 minutes of residence time.

Table 4: Ethanol plant parameters

Parameter Optimized Distillery (VSB base)

Operation (days) 200

Processing capacity (106 TC. y -1) 4

Sugarcane cleaning Dry

Mill engines Electric

Surplus bagasse use Burnt for electricity

Straw recovery (bale) (%) 50

Fermentation efficiency (%) 90

Wine ethanol content (g.L-1) 80

Dehydration Molecular sieves

Source: Bonomi et al. (2016)

Page 55: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

55

Cattle feed composition considered in this study is presented in Table 5. This feed is

used to finish cattle in the scenarios with feedlots.

Table 5: Feed formulation for feedlot managements

Ingredients %DM Daily Consumption* (kg/hd)

Hydrolyzed bagasse 50.47 11.93

In Natura bagasse 4.23 0.90

Wet yeast 10.58 4.89

Molasses 2.75 0.39

Corn grain 20.95 2.53

Soybean bran 7.61 0.91

Urea 0.77 0.08

Mineral salt 2.64 0.28

Rumensin 0.00 0.00

Total 100.00 21.91

Source: (CGEE, 2009a)

*wet basis

8.3 Economic Evaluation

The economic evaluation considers a greenfield project (when the project starts from

scratch, with no previous constructions, buildings, investments) using as reference data December

2016, considering a depreciation of 10 years linear, 25 years of expected lifetime and discount rate

of 12% per year (Table 6). Products costs and prices are calculated based on IPCA of December

2016, considering moving average of the market prices from the last 10 years; equipment costs are

updated based on IGPM. The employees are an estimative based on VSB database, real cases of

integration and on the Anualpec 2015 (2015) approach. The capital and operating costs are based

on VSB approaches for ethanol production; based on the Anualpec 2015 (2015) for cattle

production and based on Sparovek; Maule; Burgi (2008) data for feed production. Pasture land

rental cost was estimate based on CONAB (2010) approach for rental, which considers 3% of land

price. Sugarcane land rental cost was estimate based on IEA (2017).

The economic parameters of evaluation are the internal rate of return (IRR), net present

value (NPV) and payback time (PT). These approaches rely on cash flow analysis, which depends

on the data collection on capital expenditures (investment in buildings, equipment, land, herd,

working capital, etc.); on revenues (prices of main outputs such as ethanol, sugar, electricity, beef

Page 56: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

56

cattle, milk and others); and on operating costs (expenditures associated with feedstock, labor,

maintenance, chemicals, utilities, feed, etc).

Net present value (Equation 2) is the difference between cash inflows and the present

value of cash outflows. It indicates how much the investment adds to the business, if the NPV is

negative, the project is not feasible (BONOMI et al., 2016).

Equation 2: Net Present Value

NPV = ∑𝐶𝑛

(1+𝑟)𝑛𝑛=𝑁𝑛=0 (2)

Where:

n = number of time periods

r = discount rate

Cn = net cash inflow during the period n

Payback time is the period which is necessary for the profits to ‘pay’ the investment

costs (BONOMI et al., 2016). And the IRR is calculated with the Equation 3 and it is defined as:

IRR is the average interest rate paid per year by the evaluated project. The IRR of

an investment is the discount rate at which the NPV of costs (negative cash flows)

of the investment equals the NPV of the benefits (positive cash flows) of the

investment. In other words, IRR can be found when NPV equals zero (BONOMI

et al., 2016, p.159).

Equation 3: Internal Rate of Return

0 = ∑𝐶𝑛

(1+𝐼𝑅𝑅)𝑛𝑛=𝑁𝑛=0 (3)

Where:

n = number of time periods

r = discount rate

Cn = net cash inflow during the period n

Page 57: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

57

Table 6: Assumptions for economic evaluation

Feed prices are estimated based on costs of external ingredients (corn grain, soybean

bran, mineral salt, urea and rumensin) and ethanol by-products. These costs rely on historical

market prices of the ingredients; for the by-products costs it was assumed the same cost of

sugarcane (Table 7).

Item Value Reference

Expected plant lifetime 25 years Assumption

Discount rate 12% per year Assumption

Reference date December 2016 Assumption

Depreciation 10 years, linear Assumption

Anhydrous ethanol price 1.696 R$ per L (CEPEA, 2017a)

Sugar price 1.263 R$ per kg (CEPEA, 2017b)

Electricity price 193.95 R$ per MWh (BRASIL, 2016) (CGEE, 2017)

Feed price 225 R$ per tonne Assumption

Unfinished meat price 4.73 R$ per kg (AGROLINK, 2017a)

Finished meat price 4.40 R$ per kg (AGROLINK, 2017b)

Sugarcane land rental

price 998.50 R$ per ha (IEA, 2017)

Pasture land rental price 514.37 R$ per ha (ANUALPEC, 2015)

1 US$ (December 2016) 3.38 R$ (UOL Economy, 2017)

Page 58: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

58

Table 7: Estimate of feed final price

Ingredients kg/season R$/kg Description Reference

Total Cost (R$) % of total

price

Hydrolyzed

Bagasse 71,580,000.00 0.08

Sugarcane

cost

Assumption 5,726,400.00 19.36

In Natura

Bagasse 5,400,000,00 0.08

Sugarcane

cost

Assumption 432,000.00 1.46

Wet Yeast 29,340,000.0 0.08 Sugarcane

cost

Assumption 2,347,200.00 7.93

Molasses 2,340,000.00 0.08 Sugarcane

cost

Assumption 187,200.00 0.63

Corn

Grain 15,180,000.00 0.60

Historical

price

(MERCADO,

2017a) 9,108,000.00 30.79

Soybean

Bran 5,460,000.00 1.18

Historical

price

(MERCADO,

2017b) 6,442,800.00 21.78

Urea 480,000.00 3.34 Historical

price

(IEA, 2016a) 1,603,200.00 5.42

Mineral

Salt 1,680,000.00 2.21

Historical

price

(IEA, 2016b) 3,712,800.00 12.55

Rumensin 17,400.00 1.30 Historical

price

Assumption 22,620.00 0.08

Total 131,477,400.00 0.22 - 29,582,220.00 100.00

8.4 Life Cycle Assessment

The Life Cycle Assessment is a methodology to evaluate environmental impacts of a

production chain or a product using the pre-defined steps of production (Figure 26). More details

are found in the 14040 and 14044 ISO standards (ISO, 2006). Moreover, in Brazil, there is also

ABNT standards for LCA: ABNT NBR ISO 14040 (ABNT, 2009) and ABNT NBR ISO 14044

(ABNT, 2009b).

Page 59: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

59

Figure 26: Life Cycle Assessment Methodology

The goal of this assessment is to evaluate the CO2 eq emissions of the integrated

scenarios using MJ of ethanol as functional unit, considering agricultural and industrial steps and

emissions (Figure 27). The system has a cradle to gate approach. Economic allocation was

considered for the products of the sugarcane plant based on market prices of ethanol, sugar,

electricity and opportunity costs of feed ingredients. Meat is the only product of cattle production

chain, so there was no need of economic allocation. The Climate Change category from ReCiPe

Midpoint (H) method was assessed for all outputs.

Page 60: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

60

Figure 27: Sugarcane ethanol and cattle integrated chain for LCA

SOURCE: (BONOMI et al., 2016)

LCA Details

Sugarcane and ethanol plant inputs and emissions are from VSB database. Cattle

emissions were from IPCC (2006) divided as following: enteric fermentation: 56 kg/hd.y-1;

manure: 1 kg/hd.y-1; manure management: 0.59 kg/hd.y-1. Dolomite emissions were included

according to IPCC (2006) for lime and urea application.

The results for sugarcane production considers LUC emissions of 100% expansion on

pasture land, using 0.17 tCO2 eq/ha.y-1 (CHAGAS et al., 2016). Scenario 1 considers an addition

of 11.8 gCO2 eq/MJ ethanol, accounted as ILUC emissions based on European Commission

(2015b) methodology.

Page 61: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

61

9 RESULTS AND DISCUSSION

The results for the scenarios production of meat, ethanol, sugar, electricity and feed are

summarized in Table 8. Scenario 5 presents the highest production values for ethanol, meat, sugar,

and bioelectricity all inside 100,000 hectares. The ethanol plants from Scenario 1 and from

Scenario 2 are different. This difference is due to feed production in Scenario 2; this scenario uses

7.3% of bagasse, plus steam for hydrolysis, thereby decreasing bioelectricity production 45.84

GWh per year, or 6.2% of the annual bioelectricity production in Scenario 1. Also, 1.8% of

molasses is used in Scenario 2 to produce cattle feed, which decreases annual ethanol production

by 806.4 tons. In Scenario 3, Scenario 4 and Scenario 5 the ethanol plants are the same from

Scenario 2, the only difference is the number of plants in each scenario.

Cattle finished in feedlots emit less CO2 eq compared to extensive management. This

difference in CO2 eq emissions between extensive management and feedlots generates carbon

credits for the cattle sector.

Table 8: Production results of scenarios simulation

Description Meat LW

(t/y)

Ethanol

(t/y)

Sugar

(t/y)

Electricity

(GWh/y)

Feed

(t/y)

Carbon

Credits (t/y)

SCENARIO 0 96,000 - - - - -

SCENARIO 1 96,000 169,176 205,536 741 - -

SCENARIO 2 96,000 168,370 205,536 696 137,134 45,676

SCENARIO 3 96,000 336,739 411,072 1391 274,268 91,352

SCENARIO 4 96,000 505,109 616,608 2087 411,403 137,028

SCENARIO 5 96,000 673,478 822,144 2783 548,537 182,704

Total capital investments for each scenario are in Table 9. For cattle production, the

necessary investments are fences, concrete troughs and other infrastructure (Table 9). Investment

in cattle production decreases from Scenario 0 to Scenario 5 because there are less land area in

feedlots, consequently fewer fences and concrete trough.

Page 62: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

62

Capital investments for ethanol plant with integrated feed production (Scenarios 2 to

5) and without animal feed production (only Scenario 1) are detailed in Table 10. The difference

between capital investments for ethanol plant with and without animal feed production are due to

higher investments costs with generation and distribution of steam and electrical energy in the one

without animal feed production. When 7.3% of bagasse is split for feed production, less energy and

steam is produced, consequently there are less investment costs. Furthermore, investment for feed

production is only 0.26% of the total ethanol plant investment.

Table 9: Total investments for each scenario

Description Ethanol Plant

(MR$)

Feed

Production

(MR$)

Pasture

(MR$)

Feedlot

(MR$)

SCENARIO 0 - - 104 -

SCENARIO 1 1,185 - 104 -

SCENARIO 2 1,163 3 78 11

SCENARIO 3 2,326 6 52 22

SCENARIO 4 3,489 9 26 33

SCENARIO 5 4,652 12 - 44

Table 10: Investments for ethanol plant

Description With feed – MR$ Without feed – MR$

Auxiliary buildings, urbanization and general 156 156

Reception and preparation of sugarcane 42 42

Juice extraction 83 83

Juice treatment and concentration 70 70

Sugar production 60 60

Fermentation (C12 / C6) 44 44

Ethanol production 106 107

Generation and distribution of steam 323 336

Generation and distribution of electrical energy 214 223

Water and compressed air system 64 64

Animal Feed 3 -

Total 1,166 1,185

Page 63: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

63

For economic evaluation, the results are presented separately for the ethanol plant and the

cattle production operation.

For the ethanol plants, the plant with integrated feed production (Scenario 2) gave similar

results compared to the plant without feed production (Scenario 1). For better economic results,

more attractive feed prices than those considered in this study (R$ 225.0 per tonne of feed) would

be required. Total NPV and total annual profit for Scenarios 2 to 5 increases proportionally to the

number of plants in each scenario (Table 11), considering the ethanol plants are the same.

Table 11: Economic results – ethanol plant

Description NPV (MR$) IRR (%) PT (Years) Annual Profit (MR$)

Scenario 1 544.3 17.6 8.5 369.5

Scenario 2 537.6 17.7 8.3 369.0

Scenario 3 1,075.2 17.7 8.3 738.0

Scenario 4 1,612.8 17.7 8.3 1,107.1

Scenario 5 2,150.4 17.7 8.3 1,476.1

The revenue from ethanol plant with integrated feed production (MR$ 785.7) is higher

than the revenue from the plant without animal feed production (MR$ 766.8). Feed is an additional

product and has a participation of 3.8% of total ethanol plant revenue (Table 12). This participation

could increase if considering the production of feed for more than 50 thousand heads (number of

cattle heads considered in this study).

Table 12: Products participation on total revenue of ethanol plant

Description Without Feed Production With Feed Production

Sugar (%) 33.9 33.0

Feed (%) - 3.8

Ethanol (%) 47.4 46.0

Electricity (%) 18.8 17.2

Page 64: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

64

In Table 13 it is presented the allocated costs of production for each ethanol plant’s

products. The integrated feed production keeps the costs of ethanol and sugar constant and

increases the costs of electricity production compared to the plant without animal feed production.

Table 13: Allocation costs for ethanol plant products

Description Ethanol (R$/kg) Sugar

(R$/kg) Electricity

(R$/MWh) Feed

(R$/kg)

Scenario 0 - - - -

Scenario 1 1.25 0.93 142.52 -

Scenario 2 1.25 0.93 143.12 119.34

Scenario 3 1.25 0.93 143.12 119.34

Scenario 4 1.25 0.93 143.12 119.34

Scenario 5 1.25 0.93 143.12 119.34

Economic results for cattle production are presented in Table 14. The area released

from pasture intensification can generate extra revenue for cattle sector. In this study, land rental

price considered is R$ 484.13/ha. This value is the difference paid by the cattle sector for land

rental and the price sugarcane plants pay for released area, considering the land owner is a third

individual. The NPV is only economic feasible in Scenario 4 and Scenario 5. The last one is totally

integrated and presents the best economic feasibility.

Table 14: Economic results – cattle production considering land rental revenue of released

pasture area for sugarcane production

Description NPV

(MR$)

IRR

(%)

Payback

(Years)

Annual

Profit

(MR$)

Annual

Revenue

(MR$)

Annual

Costs

(MR$)

Meat

(R$/kg)

Scenario 0

and 1 -390.49 * > 100.00 -46.11 422.40 468.51 5.03

Scenario 2 -224.57 * > 100.00 -21.94 446.61 468.55 5.00

Scenario 3 -58.64 -1.59** > 100.00 2.23 470.81 468.58 4.99

Scenario 4 74.47 24.51 5.28 26.40 495.02 468.62 4.97

Scenario 5 199.30 47.59 1.83 50.57 519.23 468.66 4.95

*The IRR is not calculated because the cash flow starts negative (due to investments costs) and remains

negative in the following years of the project (due to costs higher than revenues).

Page 65: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

65

**The IRR is calculated and it is negative because the cash flow starts negative and changes to positive

during the following years of the project. However, the positive flows are small and do not pay the initial

investments.

With integration, it is also possible to have extra revenue from carbon credits generated

by cattle finished in feedlots. The carbon credits revenue is assumed to be US$ 90/tonne of CO2 eq

according to Low Carbon Fuel Standard for the State of California for December 2016

(CALIFORNIA ENVIRONMENTAL PROTECTION AGENCY, 2017). The carbon credits

revenue increases the economic feasibility of integration (Table 15).

Table 15: Economic results – cattle production considering land rental revenue of released

pasture area for sugarcane production and C credits revenue

Description NPV

(MR$)

IRR

(%)

Payback

(Years)

Annual

Profit

(MR$)

Annual

Revenue

(MR$)

Annual

Costs

(MR$)

Meat

(R$/kg)

Scenario 0

and 1 -390.49 * > 100 -46.11 422.40 468.51 5.03

Scenario 2 -137.19 * > 100 -7.96 460.58 468.55 5.03

Scenario 3 79.68 22.89 5.93 30.18 498.77 468.58 5.00

Scenario 4 269.54 47.75 1.82 68.33 536.95 468.62 4.99

Scenario 5 459.40 77.48 0.84 106.47 575.13 468.66 4.97

*The IRR is not calculated because the cash flow starts negative (due to investments costs) and remains

negative in the following years of the project (due to costs higher than revenues).

After these economic evaluation, it was noticed that scenarios with higher pasture area

are not feasible (Scenario 0, Scenario 1 and Scenario 2). That happens due to land rental costs

which are too high in São Paulo State and due to relatively low carbon credit revenues.

In Anualpec 2015 (2015) and in Barbieri; Carvalho; Sabbag (2016) pasture land rental

is not considered a cost. In this approach, the cattle owner can also own the land. With pasture

intensification the area released can be rented for the sugarcane plant and, then, generate extra

revenue for the cattle manager. Considering this approach of no land rental costs plus the revenue

of land rental for sugarcane plant, thereafter, better results were obtained for cattle production

(Table 16), when compared to the results considering land rental costs.

Page 66: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

66

Table 16: Economic results - cattle production considering the cattle manager owns the land plus

revenue from land rental for sugarcane production

Description NPV

(MR$) IRR (%) PT (Years)

Annual

Profit

(MR$)

Annual

Revenue

(MR$)

Annual

Costs

(MR$)

Meat Cost

(R$/kg)

Scenario 0

and 1 178.57 28.19 4.18 56.76 422.40 365.64 3.96

Scenario 2 263.28 37.33 2.67 472.33 400.02 72.31 4.30

Scenario 3 396.43 52.31 1.58 522.25 423.99 98.26 4.52

Scenario 4 529.58 70.83 0.97 572.18 447.95 124.22 4.75

Scenario 5 662.72 95.62 0.60 622.10 471.92 150.18 4.98

In Table 17 the results for the economic evaluation considers the same approach from

Table 16, but including carbon credits revenue. The considered carbon credits revenue is US$

90/tonne of CO2 eq.

Table 17: Economic results - cattle production considering the cattle manager owns the land and

revenue from land rental for sugarcane production plus carbon credits

Description NPV

(MR$) IRR (%) PT (Years)

Annual

Profit

(MR$)

Annual

Revenue

(MR$)

Annual

Costs

(MR$)

Meat Cost

(R$/kg)

Scenario 0

and 1 178.57 28.19 4.18 56.76 422.40 365.64 3.96

Scenario 2 328.31 42.20 2.21 486.30 400.02 86.29 4.30

Scenario 3 526.48 61.75 1.22 550.20 423.99 126.22 4.52

Scenario 4 724.65 84.96 0.73 614.11 447.95 166.15 4.75

Scenario 5 922.82 115.04 0.44 678.01 471.92 206.08 4.98

Nonetheless, the costs of meat production in Scenarios 3 to 5 are higher than the meat

selling price (R$ 4.40), which turns the integrated system economically unfeasible if there is no

extra revenue from rental of released land area for additional sugarcane production or extra revenue

provided by carbon credits.

Page 67: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

67

After purchase of unfinished heads, land and feed costs (mainly corn and soybean bran)

are important factors for economic feasibility of cattle production in São Paulo State. In Table 18

the results are based on the approach of pasture land rental as a cost (R$ 514.37/ha).

Table 18: Participation on cattle production total cost

Description % unfinished heads % land price % feed

Scenario 0 and 1 70.5 21.3 -

Scenario 2 70.9 16.1 6.2

Scenario 3 71.1 10.3 12.3

Scenario 4 71.4 5.4 18.6

Scenario 5 71.7 0.1 24.9

Concerning land rental and feed costs participation on the total cost of cattle

production, some sensitivity analyses were performed considering the minimum land rental, corn

and soybean bran prices in the last 20 years as they were the currently price.

Land use and climate change concern have major role in the world’s future.

Furthermore, the trend for land price is to keep increasing due to competitivity in agricultural

production and land use intensification. Therefore, another sensitivity was done considering future

land price, future carbon credit revenue and future feed prices. Future land price is an estimate

based on the growth rate of the last 20 years; feed estimate price is based on the highest corn and

soybean bran prices on the last 20 years; and carbon credits price is an assumption.

Another analysis was performed without considering extra revenue from rental of

released pasture are for sugarcane production, in order to analyze if without this extra revenue

integration is economically feasible. This sensitivity considers the cattle producer owns the land

(no pasture land rental costs) as explained above.

The detailed results are in Annex 1. In Table 19 there is the IRR of each scenario

considering each sensitivity detailed above.

Page 68: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

68

Table 19: Economic sensitivity for cattle production (IRR)

Description < rental price¹ < rental and

feed price² 20 years future³ Owns the land4

Scenario 0 and 1 21.5% 21.5% * 28.19%

Scenario 2 7.2% 14.3% * 15.94%

Scenario 3 * 9.7% * *

Scenario 4 -416.4%** -4.2%** -0.6% *

Scenario 5 * * 41.7% *

¹minimum pasture land rental price considers R$ 88.26/ha;

²minimum pasture land rental and feed price consider R$ 88.26/ha and R$ 146.42/t respectively;

³maximum pasture land rental and feed price and future carbon credits assumption, considers R$ 88.26/ha,

287.14/t and US$ 200.00/t respectively; 4no land rental costs, because the cattle manager owns the land, but there is no revenue from land rental for

sugarcane production

*The IRR is not calculated because the cash flow starts negative (due to investments costs) and remains

negative in the following years of the project (due to costs higher than revenues).

**The IRR is calculated and it is negative because the cash flow starts negative and changes to positive

during the following years of the project. However, the positive flows are small and do not pay the initial

investments.

Lower rental prices turn extensive management economically feasible, however the

scenarios with integrated management aren’t infeasible due to high feed costs. Considering future

predictions and land rental revenue for sugarcane production, integration is feasible and extensive

management is not. In short, for sensitivity results for current economic scenario, integration is

not feasible compared to extensive management due to high feed costs. For a future model of

production, integration can play a major role to meet world’s demand of both food and energy.

In regard to CO2 eq emissions, all scenarios include LUC emissions for ethanol

production with sugarcane expansion on 100% pasture land. The emission considered is 0.17 tCO2

eq/ha.y-1 (CHAGAS et al., 2016). From Scenario 0 to Scenario 1 emissions are higher because

there isn’t ethanol, sugar and electricity production in Scenario 0 (Table 20). The difference

between the emissions from Scenario 1 to 2 are due to ILUC emissions and also due to higher

amount of ashes from bagasse and straw burnt that are applied in sugarcane field, so there is more

diesel being burned and machinery being used. The ILUC emissions were calculated based on the

European Commission (2012b) and European Commission (2015b) data.

Page 69: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

69

Their provisional estimate for ILUC emissions from sugar biofuels is 13 gCO2 eq/MJ.

This value considers a sugarcane yield of 96.7 tons per hectares and sugarcane only for ethanol

production. This value was adjusted for this work assumption of 80 tons of sugarcane per hectare

and 50% of sugarcane to produce ethanol. The adjusted ILUC emissions are 11.8 gCO2/MJ of

ethanol, or 119.142 tons of CO2 eq per hectare of sugarcane produced.

Total emissions are higher in Scenario 5 (Figure 28); however, in that Scenario there

are four times more ethanol, sugar, electricity and feed been produced compared to Scenario 2, all

in the same area, without land displacement, deforestation or compromising cattle production.

Which means it is possible to increase ethanol production without pasture displacement.

Table 20: Results of Climate Change emissions

Description Ethanol Plant (tCO2) Cattle production (tCO

2)

Scenario 0 - 1,291,599.1

Scenario 1 332,861.7 1,291,599.1

Scenario 2 198,674.7 1,245,923.0

Scenario 3 397,349.5 1,200,247.0

Scenario 4 596,024.2 1,154,570.9

Scenario 5 794,698.9 1,108,894.9

Page 70: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

70

Figure 28: Total tCO2 eq emissions per scenario assessed

As the level of integration increases, emissions of cattle production decreases. It

happens because when finished in feedlots, cattle have lower emissions due to a shorter finishing

cycle and also to no fertilizers application (Figure 29). In pasture, the emission is 13.5 kgCO2 eq

per kg of meat (LW) produced; in feedlots this number decreases to 11.6 kgCO2 eq. In Ecoinvent

database, the emissions for global cattle for slaughter is 13.6 kgCO2eq, so the value calculated in

this work is inside literature average. Emissions for 1 hectare of sugarcane production are 3,416

kgCO2 eq against 6,458 kgCO2 eq from 1 hectare of pasture land.

Figure 29: Comparison of CO2 eq emissions per kilogram of meat produced in pasture and in

feedlot

13.5

11.6

Pasture Meat Feedlot Meat

Page 71: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

71

In Figure 30 there is the comparison of CO2 emissions per MJ of ethanol produced.

The difference between the scenarios with and without integration was reported above. When

including ILUC emissions from the displaced pasture in Scenario 1, emissions for MJ of ethanol

produced increases in 11.8 gCO2 (Figure 30, ILUC).

Integration proposal is exactly not to have pasture displacement and ILUC emissions.

What if carbon credits generated by pasture intensification were applied to reduce ethanol

emissions from the integrated plant? The result is that emissions per MJ of ethanol produced

decrease by 9.6 gCO2 eq/MJ (Figure 30, “Integrated + avoided ILUC”). This decrease in ethanol

emissions is called “avoided” ILUC in this study.

Figure 30: Sensitivity of gCO2 eq per MJ of ethanol

▪ Non-Integrated: Emissions per MJ of ethanol produced in a plant without feed production

▪ Integrated: Emissions per MJ of ethanol produced in a plant with feed production

▪ Non-Integrated + ILUC: addition of 11.8 gCO2 eq/MJ of sugarcane bioethanol produced

on the non-Integrated plant

20.8 20.0

32.6

10.4

non-Integrated Integrated non-Integrated + ILUC Integrated + "avoided"ILUC

Ethanol Emissions (gCO2eq/MJ)

Page 72: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

72

▪ Integrated + avoid ILUC: Carbon credits generated by pasture intensification are applied to

reduce ethanol emissions for the Integrated plant

The results of LCA are similar to the ones in literature, when considering LUC

emissions, the results from European Commission (2012b) are 20.2 gCO2 eq/MJ for sugarcane

ethanol. And when considering ILUC emissions, the results from European Commission (2012b)

are 33.0 gCO2 eq/MJ for biofuels.

Comparison of total emissions of ethanol plant per scenario simulated with the

sensitivities reported above (Figure 30) is presented in Figure 31.

Figure 31: Total CO2 eq emissions (Mt) for the ethanol plant per scenario with “avoided ILUC”

sensitivity

*Scenario 1 isn’t integrated and there is no carbon credits generation

In Table 21 there is a summary of this work results for economic and environmental

evaluation. The results for cattle production considers the approach of no land costs, plus revenues

from the land rental for sugarcane production and revenues from carbon credits. For ethanol plant

emissions, it is considered the addition of ILUC emissions for the ethanol plant without feed

production (Scenario 1) and the avoided ILUC emissions are not accounted for Scenarios 2 to 5.

332.9

198.7

397.3

596.0

794.7

-

153.0

306.0

459.0

612.0

SCENARIO 1 SCENARIO 2 SCENARIO 3 SCENARIO 4 SCENARIO 5

Baseline* "avoided ILUC"

Page 73: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

73

Table 21: Economic and environmental results for sugarcane ethanol and pasture intensification

Meat

LW

(t/y)

Ethanol

(t/y)

IRR

(%)

Cattle

IRR

(%)

Ethanol

Ethanol

Plant*

(tCO2)

Cattle

production

(tCO2)

Carbon

Credits

(t/y)

gCO2/MJ

ethanol**

Scenario

0 96,000.0 - 28.2 - - 1,291.6 - -

Scenario

1 96,000.0 - 28.2 17.6 332.9 1,291.6 - 32.6

Scenario

2 96,000.0 169,176.0 42.2 17.7 198.7 1,291.6 45,676.0 20.0

Scenario

3 96,000.0 168,370.0 61.7 17.7 397.3 1,245.9 91,352.0 20.0

Scenario

4 96,000.0 336,739.0 85.0 17.7 596.0 1,200.2 137,028.0 20.0

Scenario

5 96,000.0 505,109.0 115.0 17.7 794.7 1,154.6 182,704.0 20.0

*considers ethanol, sugar and electricity production

** Scenario 1 considers ILUC emissions, Scenarios 2 to 5 considers Integrated plant emissions

The United States’ model for corn ethanol and cattle integration can be adapted to

Brazilian’s conditions and applied to sugarcane ethanol and cattle production chains. Integration

can increase ethanol production without expanding agricultural frontiers or pasture displacement

due to cattle stocking rate increase, pasture land use intensification and sugarcane ethanol by-

products as cattle feed ingredients.

The ethanol plant must be modified to direct part of the molasses, yeast and bagasse to

animal feed, but this is certainly technically feasible.

Due to sugarcane expansion on released pasture land, production of ethanol, sugar,

electricity and by-products production increases, without compromising cattle production. It is

worthwhile to mention that straw recovery, increasingly adopted by the Brazilian sugar-ethanol

sector (CARDOSO et al., 2018), plays an important role for compensating bagasse split, increasing

surplus electricity at the same time.

As in the United States, the by-products of sugarcane ethanol production along with

other feed components can replace forage (grazing), due to its nutritional value. Including by-

products in cattle diets enables increased cattle stocking rates, stabilizing the herd number and meat

production even during the dry season, when forages are only able to support fewer head.

Page 74: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

74

Cattle feed composed of by-products has higher energetic and protein feed

characteristics, which provides a higher average daily weight gain and shorter cattle production

cycle compared to pasture fattening systems.

Currently, integration is economically feasible due to the revenue from rental of

released pasture area for sugarcane production. Feed and land rental costs are comparatively high

in São Paulo State, which makes the cattle production system economically unfeasible if no

revenue from land rental is considered. Integration has the extra advantage of potential revenue

from carbon credits. This extra revenue further increases the economic feasibility of integration.

However, commercialization of carbon credits is not yet widespread.

Environmentally, integration is desirable and avoids ILUC emissions estimated for

ethanol production by International Agencies. In our study, total ethanol plant CO2 eq emissions

are 40.3% lower in the integrated model compared to the non-integrated model. Furthermore, the

“avoided ILUC” approach suggested here decreases the total emissions per MJ of ethanol produced

due to pasture intensification. Considering avoided ILUC, the total ethanol plant CO2 emissions

are about 23.0% lower than the emissions of the integrated plant without avoided ILUC.

Page 75: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

75

10 CONCLUSIONS

Sugarcane ethanol and beef cattle integration can be a new model of ethanol production

which avoid ILUC emissions generally linked to biofuels. The model can increase ethanol

production without compromising cattle production. This integration model also can avoid pasture

displacement or deforestation due to pasture land use intensification, where more animals are

finished inside smaller areas.

Besides, pasture intensification reduces emissions per kg of meat produced and these

can become carbon credits, a new source of revenue for the cattle sector. The carbon credits

generated by integration plus avoided ILUC, are called in this work “avoided ILUC”. This concept

can become a new method to reduce even more Brazilian emissions due to biofuels production and

use.

Integration is economically feasible for the cattle sector, only considering the revenue

from rental of released pasture area. On the ethanol sector feed production increases sugarcane

ethanol plant economic feasibility. In the future, with an established Carbon Market, integration

can become the new model of beef and ethanol production.

Integration has potential to become Brazil’s new model of ethanol production and it

will allow ethanol expansion without depending on sugar production. The country has strong

potential to integrate sugarcane ethanol and beef cattle, mainly in São Paulo State, where most of

the sugarcane production is located. Integration is possible due to sugarcane ethanol by-products

nutritional value as cattle feed, that can replace grazing. Considering world Climate Change

concern and reduction of GHG emissions, integration has huge potential as new model of ethanol

production

However, more studies need to be done for a better understanding of the boundaries

of this new model of production.

Page 76: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

76

SUGGESTIONS FOR FUTURE WORKS

One possible limit for the expansion of the integrated model is the saturation of beef

market, regarding the current experience of integration in United States. For future studies, it is

suggested to consider future predictions of meat consumption and demand.

Enteric fermentation can change according to the type of feed. It is suggested to

consider effects of sugarcane by-products on the cattle enteric fermentation emissions and also on

the manure emissions.

Page 77: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

77

REFERENCES

ABIEC. O Mercado Mundial de Carne Bovina, ago. 2016. Disponível em:

<http://az545403.vo.msecnd.net/uploads/2016/08/apresentacao_cosag_01_08_16_fernando_sam

paio.pdf>. Acesso em: 22 mar. 2017

AGROLINK. Cotações - Boi Magro 30 meses - SP, 2017a. Disponível em:

<https://www.agrolink.com.br/cotacoes/historico/sp/boi-magro-30-meses-1cab>. Acesso em: 20

abr. 2017

AGROLINK. Cotações - Boi Gordo 15 kg, 2017b. Disponível em:

<https://www.agrolink.com.br/cotacoes/historico/sp/boi-gordo-15kg>. Acesso em: 20 abr. 2017

ALKIMIM, A.; SPAROVEK, G.; CLARKE, K. C. Applied Geography. Converting Brazil’s

pastures to cropland: An alternative way to meet sugarcane demand and to spare

forestlands, v. 62, p. 75–84, 2015.

ANUALPEC. ANUALPEC 2015: Anuário da Pecuária Brasileira. São Paulo, SP, Brasil:

Instituto FNP, 2015.

ASSEMBLEIA LEGISLATIVA DE SÃO PAULO. LEI N. 11.241, DE 19 DE SETEMBRO

DE 2002, 2002. Disponível em: <http://www.al.sp.gov.br/repositorio/legislacao/lei/2002/lei-

11241-19.09.2002.html>. Acesso em: 10 jan. 2017

ASSOCIAÇÃO BRASILEIRA DE NORMAS TÉCNICAS (ABNT). NBR ISO 14040: Gestão

ambiental - avaliação do ciclo de vida - princípios e estrutura, 2009a.

ASSOCIAÇÃO BRASILEIRA DE NORMAS TÉCNICAS (ABNT). NBR ISO 14044: Gestão

ambiental - avaliação do ciclo de vida - requisitos e orientações, 2009b.

BARBIERI, R. S.; CARVALHO, Jaqueline Bonfim de; SABBAG, O. J. INTERAÇÕES. Análise

de viabilidade econômica de um confinamento de bovinos de corte, v. 17, p. 357–369, jul.

2016.

BEEFPOINT. Cenário da pecuária brasileira no estado de São Paulo, 2000. Disponível em:

<http://www.beefpoint.com.br/radares-tecnicos/pastagens/cenario-da-pecuaria-no-estado-de-sao-

paulo-4882/>. Acesso em: 22 mar. 2017

BEEFPOINT. Perfil da Pecuária no Brasil – Relatório Anual 2016. 12 set. 2016.

BERNDES, G. et al. Bioenergy feedstock production on grasslands and pastures: Brazilian

experiences and global outlookIEA Bioenergy, , 2016. Disponível em:

<https://www.researchgate.net/publication/312290652_Bioenergy_Feedstock_Production_on_Gr

asslands_and_Pastures_Brazilian_Experiences_and_Global_Outlook>. Acesso em: 21 out. 2017

Page 78: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

78

BIOSEV. Biosev fortalece relacionamento com fornecedores com aposta em ração animal,

mar. 2014. Disponível em: <http://www.biosev.com/noticia/biosev-fortalece-relacionamento-

com-fornecedores-com-aposta-em-racao-animal/>. Acesso em: 19 fev. 2017

BIOSEV. Unidades Operacionais da Biosev, 2015. Disponível em: <http://www.biosev.com/a-

biosev/unidades/>. Acesso em: 19 fev. 2017

BNDES; CGEE. Bioetanol de Cana-de-Açúcar: Energia para o Desenvolvimento

Sustentável. 1. ed. Rio de Janeiro: BNDES, 2008. v. 1

BONOMI, A. et al. Virtual Biorefinery - An Optimization Strategy for Renewable Carbon

Valorization. Switzerland: Springer International Publishing, 2016.

BOVIPLAN. Formação e Manejo de Pastagens - BOVIPLAN, 2015.

BRASIL. Zoneamento Agroecológico da Cana-de-Açúcar – Expandir a produção, preservar

a vida, garantir o futuroMinisterio da Agricultura, Pecuária e Abastecimento - MAPA, , 2009.

Disponível em: <https://www.embrapa.br/busca-de-publicacoes/-

/publicacao/579169/zoneamento-agroecologico-da-cana-de-acucar-expandir-a-producao-

preservar-a-vida-garantir-o-futuro>. Acesso em: 14 mar. 2016

BRASIL. MISTURA CARBURANTE (ETANOL ANIDRO - GASOLINA)

CRONOLOGIAMINISTÉRIO DA AGRICULTURA, PECUÁRIA E ABASTECIMENTO, ,

2015a. Disponível em:

<http://www.agricultura.gov.br/assuntos/sustentabilidade/agroenergia/arquivos/cronologia-da-

mistura-carburante-etanol-anidro-gasolina-no-brasil.pdf>. Acesso em: 10 nov. 2017

BRASIL. Dados de rebanho bovino e bubalino no Brasil – 2015Ministerio da Agricultura,

Pecuária e Abastecimento, , 2015b. Disponível em:

<http://www.agricultura.gov.br/arq_editor/file/Dados%20de%20rebanho%20bovino%20e%20bu

balino%20do%20Brasil%202015_site.pdf>. Acesso em: 11 fev. 2017

BRASIL. Relação de instituições cadastradas no departamento de cana-de-açúcar e

agroenergiaMINISTÉRIO DA AGRICULTURA, PECUÁRIA E ABASTECIMENTO, , 2015c.

Disponível em:

<http://sistemasweb.agricultura.gov.br/sapcana/downloadBaseCompletaInstituicao.action?sgJAA

SAplicacaoPrincipal=sapcana>. Acesso em: 22 nov. 2017

BRASIL. Demanda de EnergiaMinisterio de Minas e Energia, , jan. 2016. Disponível em:

<http://www.mme.gov.br/programas/leiloes_de_energia/menu/leiloes_realizados>

BRAZILIAN ROUNDTABLE ON SUSTAINABLE LIVESTOCK - GTPS. Brazilian Livestock

and its Contribution to Sustainable Development, 2016. Disponível em:

<http://www.agroicone.com.br/publicacao.asp?id=1063>. Acesso em: 17 jul. 2017

CALIFORNIA ENVIRONMENTAL PROTECTION AGENCY. Weekly LCFS Credit

Transfer Activity ReportsAir Resources Board, , 2017. Disponível em:

<https://www.arb.ca.gov/fuels/lcfs/credit/lrtweeklycreditreports.htm>. Acesso em: 12 nov. 2017

Page 79: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

79

CARDOSO, T. F. et al. Biofuels, Bioproducts & Biorefining. Economic, environmental, and

social impacts of different sugarcane production systems, v. 12, p. 68–82, 2018.

CAVALETT, O. et al. Clean Technologies and Environmental Policy. Environmental and

economic assessment of sugarcane first generation biorefineries in Brazil, v. 14, p. 339–410,

jun. 2012.

CEDEBERG, C.; MEYER, D.; FLYSJO, A. The Swedish Institute For Food and Biotechnology.

Life cycle inventory of greenhouse gas emissions and use of land and energy in Brazilian

beef production, jun. 2009.

CEPEA. INDICADOR SEMANAL DO ETANOL ANIDRO CEPEA/ESALQ - SÃO

PAULO, 2017a. Disponível em: <https://www.cepea.esalq.usp.br/br/indicador/etanol.aspx>.

Acesso em: 26 out. 2017

CEPEA. INDICADOR DO AÇÚCAR CRISTAL CEPEA/ESALQ - SÃO PAULO, 2017b.

Disponível em: <https://www.cepea.esalq.usp.br/br/indicador/acucar.aspx>. Acesso em: 5 out.

2017

CGEE. Estudos sobre as possibilidades e impactos da produção de grandes quantidades de

etanol visando a substituição parcial de gasolina no mundo - Fase 1 Relatório Final, 2009a.

Disponível em: <ftp://ftp.mct.gov.br/Biblioteca/43162-Etanol1_Rel%20Final.pdf>. Acesso em:

28 mar. 2016

CGEE. Bioetanol Combustível uma oportunidade para o Brasil. Brasília, DF: [s.n.], 2009.

CGEE. Sustainability of Sugarcane Bioenergy. Brasília, DF, Brasil: [s.n.], 2012.

CGEE. Energia de Reserva, 2017. Disponível em:

<http://www.ccee.org.br/portal/faces/oquefazemos_menu_lateral/energia_reserva?_adf.ctrl-

state=o1ezahuld_218&_afrLoop=582452464009719#!%40%40%3F_afrLoop%3D58245246400

9719%26_adf.ctrl-state%3D4imym4g4o_4>. Acesso em: 26 out. 2017

CHAGAS, M. F. et al. V Congresso Brasileiro Em Gestão de Ciclo de Vida. Impacts of Land

Use Change on GHG emissions of the first and second generation ethanol production in

Brazil, 2016.

CHIEPPE JR., J. B. Gestão de Resíduos, 2012. Disponível em:

<http://estudio01.proj.ufsm.br/cadernos/ifgo/tecnico_acucar_alcool/gestao_residuos.pdf>. Acesso

em: 24 mar. 2017

CONAB, C. N. DE A. Custos de Produção Agrícola: A metodologia da Conab, 2010.

Disponível em: <http://www.conab.gov.br/conabweb/download/safra/custos.pdf>. Acesso em: 10

nov. 2017

CONAB, C. N. DE A. Acompanhamento da Safra Brasileira – Cana-de-açúcar. Safra

2016/2017. 4o levantamento, abr. 2017. Disponível em:

Page 80: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

80

<http://www.conab.gov.br/OlalaCMS/uploads/arquivos/17_04_19_11_27_36_boletim_cana_port

ugues_-_4o_lev_-_16-17.pdf>

CONROY, B., B. et al. Nebraska Beef Cattle Report. Effects of Feeding Isolated Nutrient

Components in MDGS on Growing Cattle Performance, v. 2016, 2016a.

CONROY, B., B. et al. Impacts of Feeding Distillers Grains or Isolated Components in Distillers

Grains on Feedlot Performance and Carcass Traits. Impacts of Feeding Distillers Grains or

Isolated Components in Distillers Grains on Feedlot Performance and Carcass Traits, Beef

Cattle Report. p. 122–127, 2016b.

CORTEZ, L. A. B. Sugarcane Bioethanol R&D for Productivity and Sustainability. São

Paulo - SP - Brasil: Edgard Blucher Ltda., 2010.

CORTEZ, L. A. B. Bioenergia: Uma Oportunidade para o Brasil, 2016.

CORTEZ, L. A. B. et al. Proálcool: 40 anos. São Paulo - SP - Brasil: Edgard Blucher Ltda.,

2016.

CQBAL. Consultar Alimento - Cana-de-açúcar - Subprodutos, 2017. Disponível em:

<http://cqbal.agropecuaria.ws/webcqbal/index.php>. Acesso em: 2 fev. 2017

CTBE, C. BOLETIM CTBE|CNPEM. Mapeamento Unidades de Produção de Açúcar, Etanol

e Energia Elétrica no Brasil, v. 4, jul. 2017.

EMBRAPA. Cana-de-açúcar: Uma alternativa para alimento para a Seca. Comunicado

Técnico 73, dez. 2002. Disponível em: <https://www.embrapa.br/busca-de-publicacoes/-

/publicacao/325574/cana-de-acucar-uma-alternativa-de-alimento-para-a-seca>. Acesso em: 10

fev. 2017

EMBRAPA. SISTEMAS DE PRODUÇÃO DE GADO DE CORTE NO BRASIL: UMA

DESCRIÇÃO COM ENFASE NO REGIME ALIMENTAR E NO ABATE, 2005a.

Disponível em: <https://www.embrapa.br/busca-de-publicacoes/-/publicacao/326307/sistemas-

de-producao-de-gado-de-corte-no-brasil-uma-descricao-com-enfase-no-regime-alimentar-e-no-

abate>. Acesso em: 15 dez. 2016

EMBRAPA. SISTEMAS DE PRODUÇÃO DE GADO DE CORTE NO BRASIL: UMA

DESCRIÇÃO COM ENFASE NO REGIME ALIMENTAR E NO ABATE, 2005b.

Disponível em: <https://www.embrapa.br/busca-de-publicacoes/-/publicacao/326307/sistemas-

de-producao-de-gado-de-corte-no-brasil-uma-descricao-com-enfase-no-regime-alimentar-e-no-

abate>. Acesso em: 15 dez. 2016

EMBRAPA. GADO DE CORTE. 2. ed. Brasília, DF, Brasil: Embrapa Informação Tecnológica,

2011a.

EMBRAPA. Embrapa Invernada - Manual do Usuário, mar. 2011b. Disponível em:

<https://www.invernada.cnptia.embrapa.br/>. Acesso em: 10 abr. 2017

Page 81: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

81

EMBRAPA. Diagnóstico das Pastagens no Brasil, maio 2014. Disponível em:

<http://ainfo.cnptia.embrapa.br/digital/bitstream/item/102203/1/DOC-402.pdf>. Acesso em: 5

jan. 2017

EMBRAPA. Ministro da Agricultura destaca dados da Embrapa na abertura do GAF 2016,

5 jun. 2016. Disponível em: <https://www.embrapa.br/busca-de-noticias/-

/noticia/14129990/ministro-da-agricultura-destaca-dados-da-embrapa-na-abertura-do-gaf-2016>.

Acesso em: 10 jan. 2017

EPE - EMPRESA DE PESQUISA ENERGÉTICA. Demanda de Energia - 2050, jan. 2016.

Disponível em: <http://www.epe.gov.br/Estudos/Documents/DEA%2013-

15%20Demanda%20de%20Energia%202050.pdf>. Acesso em: 16 fev. 2016

ERICKSON, G. E. et al. General Overview Of Feeding Corn Milling Co-Products to Beef

Cattle, 2005.

EUROPEAN COMMISSION. Indirect Land Use Change (ILUC), 2012a. Disponível em:

<http://europa.eu/rapid/press-release_MEMO-12-787_en.htm>. Acesso em: 10 nov. 2017

EUROPEAN COMMISSION. COMMISSION STAFF WORKING DOCUMENT IMPACT

ASSESSMENT, 2012b. Disponível em:

<https://ec.europa.eu/energy/sites/ener/files/swd_2012_0343_ia_en.pdf>. Acesso em: 24 nov.

2017

EUROPEAN COMMISSION. Sustainability criteria, 2015a. Disponível em:

<http://ec.europa.eu/energy/en/topics/renewable-energy/biofuels/sustainability-criteria>

EUROPEAN COMMISSION. DIRECTIVE (EU) 2015/1513 OF THE EUROPEAN

PARLIAMENT AND OF THE COUNCIL of 9 September 2015 amending Directive

98/70/EC relating to the quality of petrol and diesel fuels and amending Directive

2009/28/EC on the promotion of the use of energy from renewable sources, set. 2015b.

Disponível em: <http://eur-lex.europa.eu/legal-

content/EN/TXT/PDF/?uri=CELEX:32015L1513&from=PT>. Acesso em: 22 out. 2017

EZEQUIEL, J. M. B.; GALATI, R. L.; MENDES, A. R. Revista Brasileira de Zootecnica.

Desempenho e características de carcaça de bovinos Nelore em confinamento alimentados

com bagaço de cana-de-açúcar e diferentes fontes energéticas, v. 35, n. 5, p. 2050–2057,

2006.

FAO - FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS.

Country Pasture/Forage Resource Profiles - Brazil, 2006. Disponível em:

<http://www.fao.org/ag/agp/agpc/doc/counprof/pdf%20files/brazil-english.pdf>. Acesso em: 10

fev. 2017

FAO - FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS. How to

feed the world in 2050?, out. 2009. Disponível em:

<http://www.fao.org/fileadmin/templates/wsfs/docs/expert_paper/How_to_Feed_the_World_in_2

050.pdf>. Acesso em: 15 mar. 2017

Page 82: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

82

FAO - FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS.

Country Pasture/Forage Resource Profiles – United States, 2011. Disponível em:

<http://www.fao.org/ag/agp/agpc/doc/counprof/PDF%20files/USA.pdf>. Acesso em: 10 fev.

2017

FAO - FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS.

WORLD AGRICULTURE TOWARDS 2030/2050 The 2012 Revision, jun. 2012. Disponível

em: <http://www.fao.org/docrep/016/ap106e/ap106e.pdf>

FERRAZ, J. B. .; FELICIO, P. E. D. Meat Science. Production Systems – An example from

Brazil, v. 84, n. 2, p. 238–243, 2010.

FIGUEREDO, E. B. DE F. et al. Journal of Cleaner Production. Greenhouse gas balance and

carbon footprint of beef cattle in three contrasting pasture-management systems in Brazil,

v. 142, p. 420–431, mar. 2016.

IBGE - INSTITUTO BRASILEIRO DE GEOGRAFIA E ESTATÍSTICA. Bovino - Efetivo de

Rebanhos, 2015. Disponível em:

<http://cidades.ibge.gov.br/comparamun/compara.php?lang=&lista=uf&coduf=35&idtema=159

&codv=V01>. Acesso em: 6 ago. 2017

IBGE - INSTITUTO BRASILEIRO DE GEOGRAFIA E ESTATÍSTICA. Indicadores IBGE -

Estatística da Produção Pecuária, mar. 2016. Disponível em:

<http://www.consultaesic.cgu.gov.br/busca/dados/Lists/Pedido/Attachments/490416/RESPOSTA

_PEDIDO_Estatistica%20da%20producao%20pecuaria.pdf>. Acesso em: 30 nov. 2016

IEA. Estatísticas da Produção PaulistaSECRETARIA DE AGRICULTURA E

ABASTECIMENTO DE SÃO PAULO, , 2016a. Disponível em:

<http://ciagri.iea.sp.gov.br/nia1/subjetiva.aspx?cod_sis=1&idioma=1>. Acesso em: 22 nov. 2017

IEA. Sal Mineral Bovinos Balanceado, 2016b. Disponível em:

<http://ciagri.iea.sp.gov.br/nia1/Precos_Medios.aspx?cod_sis=5>. Acesso em: 20 jun. 2017

IEA. Valor da Terra Nua - Estado de São Paulo, 2017. Disponível em:

<http://ciagri.iea.sp.gov.br/nia1/precor_SEFAZ.aspx?cod_tipo=1&cod_sis=8>. Acesso em: 9

nov. 2017

INSTITUTO DE ECONOMIA AGRÍCOLA - IEA. Análises e Indicadores do Agronegócio.

Produção Animal: Estado de São Paulo e Brasil, 2005 a 2014, v. 11, mar. 2016.

INSTITUTO DE PESQUISA AMBIENTAL DA AMAZÔNIA - IPAM. Desmatamento nos

Assentamentos da Amazônia - Histórico, Tendências e Oportunidades. Brasília, DF: [s.n.].

INTERNATIONAL ENERGY AGENCY - IEA; FAO - FOOD AND AGRICULTURE

ORGANIZATION OF THE UNITED NATIONS. How2 Guide for Bioenergy, 2017.

Disponível em: <http://www.fao.org/3/a-i6683e.pdf>. Acesso em: 10 jul. 2017

IOWA BEEF CENTER - IBC. Ethanol Coproducts For Beef Cattle, dez. 2014.

Page 83: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

83

IPCC - INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE. Guidelines for National

Greenhouse Gas Inventories, 2006.

LACORTE, M. C. F.; BOSE, N. L. V.; RIPOL, T. C. T. Anais da Escola Superior de Agricultura

“Luis de Queiroz”. Desempenho de Bovinos Confinados com Ração a Base de Bagaço de

Cana-de-Açúcar Auto-Hidrolisado, Levedura e Vinhaça, Sub-Produtos da Indústria de

Açúcar e Álcool, v. 46, n. 2, 1989.

LATAWIEC, A. E. et al. Animal. Intensification of cattle ranching production systems:

socioeconomic and environmental synergies and risks in Brazil, v. 8, p. 1255–1263, maio

2014.

MAGALHÃES, L. R. G.; VASQUEZ, H. M.; SILVA, J. F. C. DA. Revista Brasileira de

Zootecnia. Bagaço Hidrolisado e Ponta de Cana-de-Açúcar (Sacharum officinarum),

Associados a Duas Fontes Protéicas, na Engorda de Bovinos em Confinamento, v. 28, n. 4, p.

822–830, 1999.

MARIN, F. R. et al. BioScience. Prospects for Increasing Sugarcane and Bioethanol

Production on Existing Crop Area in Brazil, v. 66, abr. 2016.

MARTHA JR, G. B.; ALVES, E.; CONTINI, E. Agricultural Systems. Land-Saving

approaches and beef production growth in Brazil, 2012.

MERCADO. Cotações - Milho, 2017a. Disponível em:

<http://www.clicmercado.com.br/novo/cotacoes/BuscaCot.asp>. Acesso em: 20 abr. 2017

MERCADO. Cotações - Farelo de Soja, 2017b. Disponível em:

<http://www.clicmercado.com.br/novo/cotacoes/BuscaCot.asp>. Acesso em: 20 abr. 2017

NATIONAL ACADEMIES OF SCIENCES, ENGINEERING AND MEDICINE, M. L.

Nutrient Requirements of Beef Cattle, Eighth Revised Edition. 8. ed. Washington DC: The

National Academies Press, 2016.

POPP, A. et al. Global Environmental Change. Land-use futures in the shared socio-economic

pathways, p. 331–345, out. 2016.

PORTALDBO. Um quarto de século de integração cana-pecuária, mar. 2011. Disponível em:

<http://www.portaldbo.com.br/Revista-DBO/Destaques/Um-quarto-de-seculo-de-integracao-

cana-pecuaria/330>. Acesso em: 11 fev. 2017

RFA - RENEWABLE FUELS ASSOCIATION. Industry Statistics - World Fuel Ethanol

Production, 2016a. Disponível em:

<http://www.ethanolrfa.org/resources/industry/statistics/#1454100145545-0ddc44c4-e5a8>.

Acesso em: 10 jan. 2017

RFA - RENEWABLE FUELS ASSOCIATION. Fueling a High Octane Future, 2016b.

Disponível em: <https://www.ethanolrfa.org/wp-content/uploads/2016/02/Ethanol-Industry-

Outlook-2016.pdf>. Acesso em: 25 jul. 2017

Page 84: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

84

SALLES-FILHO, S. Futuros do Bioetanol - Brasil na liderança? Rio de Janeiro: Elsevier

Editora Ltda, 2015.

SALOMONI, E. III SIMPOSIO SOBRE PECUÁRIA DE CORTE. Sistemas de Produção em

Bovinos de Corte, p. 1–29, 1983.

SISTEMA DE ESTIMATIVAS DE EMISSÕES DE GASES DE EFEITO ESTUFA - SEEG.

Emissões Totais, 2017. Disponível em: <http://plataforma.seeg.eco.br/total_emission>. Acesso

em: 17 set. 2017

SOUSA, E. L. L. DE; MACEDO. Etanol e Bioeletricidade: A cana-de-açúcar no futuro da

matriz energética. São Paulo, SP, Brasil: Luc Projetos de Comunicação LTDA, 2010.

SPAROVEK, G. Polos de Produção de Energia, Alimento e Cidadania: conceito e aplicação

em políticas públicas. Piracicaba, SP: [s.n.].

SPAROVEK, G.; MAULE, R. F.; BURGI, R. Visão Agrícola. Integração cana-pecuária:

geração de valor social e ambiental, v. 8, p. 84–88, 2008.

TAUBE-NETTO, M. et al. Sugarcane cropping and cattle husbandry integration. In:

Sustainability of sugarcane bioenergy. Brasília, DF: CGEE, 2012. p. 173–190.

THE INTERNATIONAL ORGANIZATION FOR STANDARDIZATION (ISO). ISO 14040:

environmental management—life cycle assessment—principles and framework, 2006.

UNICA. Maior produtor mundial de cana-de-açúcar, 2016. Disponível em:

<http://www.unica.com.br/faq/>. Acesso em: 15 dez. 2016

UNITED STATES GRAIN COUNCIL - USGC. A guide to Distiller’s Dried Grains with

Solubles (DDGS), 2012. Disponível em:

<http://www.biofuelscoproducts.umn.edu/sites/biodieselfeeds.cfans.umn.edu/files/cfans_asset_41

7244.pdf>. Acesso em: 26 mar. 2017

UOL ECONOMIA. Cotações - Câmbio, 2017. Disponível em:

<https://economia.uol.com.br/cotacoes/cambio/dolar-comercial-estados-unidos/>. Acesso em: 20

abr. 2017

USDA - UNITED STATES DEPARTMENT OF AGRICULTURE. 2010 National Resources

Inventory, 2013. Disponível em:

<https://www.nrcs.usda.gov/Internet/FSE_DOCUMENTS/stelprdb1167354.pdf>. Acesso em: 26

mar. 2017

USDA - UNITED STATES DEPARTMENT OF AGRICULTURE. Livestock and Products

Annual - Argentina 2015, 2015. Disponível em:

<https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Livestock%20and%20Products%20

Annual_Buenos%20Aires_Argentina_9-11-2015.pdf>. Acesso em: 10 fev. 2017

Page 85: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

85

USDA - UNITED STATES DEPARTMENT OF AGRICULTURE. Livestock and Poultry:

World Markets and Trade, 2016a. Disponível em:

<https://apps.fas.usda.gov/psdonline/circulars/livestock_poultry.pdf>. Acesso em: 9 fev. 2017

USDA - UNITED STATES DEPARTMENT OF AGRICULTURE. Livestock and Products

Annual Argentina 2016, 2016b. Disponível em:

<https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Livestock%20and%20Products%20

Annual_Buenos%20Aires_Argentina_9-20-2016.pdf>. Acesso em: 9 fev. 2017

USINA ESTIVA. Confinamento, 2015a. Disponível em:

<http://estiva.com.br/pagina.asp?pagina=30>. Acesso em: 10 jan. 2017

USINA ESTIVA. Cana-de-açúcar, 2015b. Disponível em:

<http://estiva.com.br/pagina.asp?pagina=38#>. Acesso em: 19 fev. 2016

VALE, P. M. Centre for Climate Change Economics and Policy. The conservation versus

production trade-off: does livestock intensification increase deforestation? Evidence from

the Brazilian Amazon, v. 197, dez. 2014.

VALIN, H. et al. The land use change impact of biofuels consumed in the EU Quantification

of area and greenhouse gas impactsEcofys, IIASA and E4tech, , 27 ago. 2015.

WATSON, A. K.; LUEBBE, M. K.; ERICKSON, G. E. Nebraska Beef Cattle Report.

Evaluation of Varying Corn Grain (and Byproduct) Inclusion in Beef Cattle Finishing

Diets, v. 2016, 2016.

WORLD BIOENERGY ASSOCIATION. WBA Global Bioenergy Statistics, 2016. Disponível

em:

<http://www.worldbioenergy.org/uploads/WBA%20Global%20Bioenergy%20Statistics%202016

.pdf>. Acesso em: 10 jul. 2017

Page 86: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

86

ANNEX 1 – Cattle Production and Economic Evaluation

The detailed inventory of economic inputs for 50,000 heads finished in feedlots and in pasture are

presented in Table 1.

Table 1: Economic inputs for cattle production

Pasture Feedlot Reference

Employees 125 125 (ANUALPEC, 2015)

INPUTS (R$)

Unfinished Cattle 85,140,000.00 85,140,000.00 (AGROLINK, 2017a)

Mineral Salt 39,780.00 - (INSTITUTO DE ECONOMIA

AGRÍCOLA - IEA, 2016)

Feed - 29,565,000.00

(MERCADO,2017a),

(MERCADO,2017b), (IEA,

2016) and VSB database

Vaccines 298,785.62 298,785.62 (ANUALPEC, 2015)

Deworming 199,386.47 199,386.47 (ANUALPEC, 2015)

Other 505,230.02 505,230.02 (ANUALPEC, 2015)

Pasture Cleanning 121,161.10 - (ANUALPEC, 2015)

Fertilizers/Lime 2,133,000.00 -

VSB database, (INSTITUTO DE

ECONOMIA AGRÍCOLA -

IEA, 2016) and (BOVIPLAN,

2015)

Land rental 25718500.00 51,437.00 (IEA, 2017)

MACHINERY (R$)

Diesel 404,880.00 9,638.11 (BOVIPLAN, 2015) and VSB

database

Machinery Services 295,256.66 - (ANUALPEC, 2015)

Administrative 768,137.84 - (ANUALPEC, 2015)

Others 721,673.15 1,066,923.47 (ANUALPEC, 2015)

Investments (Fences+

Concrete – troughs 26,653,663.02 10,950,851.43

(BOVIPLAN, 2015) and

(BARBIERI; CARVALHO;

SABBAG, 2016)

The detailed inventory of environmental inputs for 50,000 heads finished in feedlots and in pasture

are presented in Table 2.

Page 87: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

87

Table 2: Environmental inputs for cattle production

Pasture Feedlot Reference

Dolomite (kg/ha) 60.00 - (BOVIPLAN, 2015)

SSP (kg/ha) 40.00 - (BOVIPLAN, 2015)

Stainless Steel (g/ha) 10.26 0.50 (BOVIPLAN, 2015)

Concrete (m³/ha) 0.00 2.75 (BOVIPLAN, 2015)

Mineral Salt (kg/hd) 0.36 - Assumption

Unfinished cattle (hd/ha) 360 180,000 Ecoinvent database

Feed (kg/ha) - 1,314,000.00 VSB simulation

Diesel (l/ha) 2.39 17.04 (BOVIPLAN, 2015) and

Assumption

CH4 - Enteric (kg/ha) 56.00 9205.48 (IPCC, 2006)

CH4 - Manure (kg/ha) 1.00 164.38 (IPCC, 2006)

N2O (kg/ha) 0.59 96.99 (FIGUEREDO et al., 2016)

Inputs (km) 200 200 VSB simulation

Feed (km) - 50 (SPAROVEK, 2009)

The detailed results for economic evaluation and sensitivities for cattle production are presented in

Table 3.

Table 3: Economic details for cattle production evaluation

Sensitivity NPV (MR$) IRR (%) PT (years)

ANNUAL

PROFIT

(MR$)

Scenario

0 and 1

2016¹ -390.49 * > 100 -46.11

< rental price² 96.45 21.5% 6.61 39.11

20 years prediction³ - - - -

Without rental4 178.57 28.19% 4.18 56.76

Scenario

2

2016 -430.16 * > 100 -54.82

< rental price -30.62 7.2% > 100 9.14

< rental price and

higher feed price5 -81.31 -5.6% > 100 0.97

< rental and feed

price6 17.42 14.3% 14.52 19.46

C 90 US$/tonne7 -189.46 * > 100 -16.33

C 200 US$/tonne8 -235.96 * > 100 -23.76

Page 88: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

88

20 years prediction -569.12 * > 100 -77.05

Rental profit9 -278.81 * > 100 -30.62

Rental profit + C

Credits10 -137.18 * > 100 -7.96

Without rental 31.02 15.94% 11.58 22.38

Scenario

3

2016 -404.74 * > 100 -53.12

< rental price -137.78 * > 100 -10.43

< rental and feed

price -13.17 9.7% > 100 10.22

C 90 US$/tonne -229.96 * > 100 -25.17

C 200 US$/tonne -18.89 8.6% > 100 51.73

20 years prediction -306.76 * > 100 -37.46

Rental profit -102.04 * > 100 -4.71

Rental profit + C

Credits 47.40 18.9% 8.43 23.24

Without rental -82.48 * > 100 -1.59

Scenario

4

2016 -379.31 * > 100 -51.43

< rental price -245.30 -416.4%** > 100 -29.99

< rental and feed

price -51.62 -4.2%** > 100 0.98

C 90 US$/tonne -117.14 * > 100 -9.50

C 200 US$/tonne 145.90 34.0% 3.10 41.75

20 years prediction -44.41 -0.6%** > 100 2.14

Rental profit 50.25 20.9% 6.98 21.19

Rental profit + C

Credits 245.33 45.2% 1.97 63.12

Without rental -217.54 * > 100 -25.55

Scenario

5

2016 -353.89 * > 100 -49.73

< rental price -95.65 * > 100 -8.43

Feed 120 R$/tonne -25.26 3.3% > 100 2.83

C 90 US$/tonne -7.20 9.9% > 100 6.18

C 200 US$/tonne 310.70 61.6% 1.22 74.51

20 years prediction 158.19 41.7% 2.25 41.73

Rental profit 183.16 45.3% 1.96 47.10

Page 89: UNIVERSITY OF CAMPINAS SCHOOL OF AGRICULTURAL … · university of campinas school of agricultural engineering nariÊ rinke dias de souza techno-economic and environmental evaluation

89

Rental profit + C

Credits 443.26 75.9% 0.87 103.00

Without rental -352.60 * > 100 -49.52

¹prices and costs for December 2016

²minimum land rental price considers R$ 88.26/ha;

³maximum land rental and feed price and future carbon credits assumption, considers R$ 88.26/ha, R$

287.14/t and US$ 200.00/t respectively; 4no land rental costs; 5minimum land rental and higher feed price consider R$ 88.26/ha and R$ 287.14/t respectively; 6minimum land rental and feed price consider R$ 88.26/ha and R$ 146.42/t respectively; 7 carbon credits assumption considers prices and costs for 2016 and US$ 90.00/t; 8 carbon credits assumption considers prices and costs for 2016 and US$ 200.00/t; 9land rental revenue, considers R$ 484.13/ha; 10land rental and C credits revenue, considers R$ 484.13/ha and US$ 90.00/t respectively.

*The IRR is not calculated because the cash flow starts negative (due to investments costs) and remains

negative in the following years of the project (due to costs higher than revenues).

**The IRR is calculated and it is negative because the cash flow starts negative and changes to positive

during the following years of the project. However, the positive flows are small and do not pay the initial

investments.