biodiesel project 24 june 2009. why invest in biodiesel self-production? biodiesel in brazil is...
TRANSCRIPT
Biodiesel Project
24 June 2009
Why invest in biodiesel self-production?
• Biodiesel in Brazil is produced overwhelmingly using soybean• There are strong indications that the market price of biodiesel will remain high,
in line with the soybean price
Sustainability:Sustainability: sustainable operations using biofuel
Source: BiodieselBR – December 2008
Guaranteed supply:Guaranteed supply: minimize vulnerability in terms of fuel supply and price on the market
85%
11%4%
Soybean oil
Animal fat
Cottonseed oil
Features:Features:• Tests under way using natural gas + diesel
blends in locomotives• Prototype GE and EMD locomotives to be tested
in 2009• Cryogenic tanks built to store gas for locomotives
Benefits:Benefits:• Using natural gas to power trains on the
Vitória-Minas and Carajás railways will cut
CO2 equivalent emissions by 73,000 tons per
year. This corresponds to emissions from
32,000 cars.
Flex-fuel train (being tested)
Biodiesel Project
Key figures:Key figures:
• Vale’s investment: US$305 million
• Production of 160,000 tons of biodiesel to supply Carajás Railway and heavy-
duty machines and equipment in Carajás mines
• 60,000 hectares to be planted, in consortium with Biopalma, within total area of
around 130,000 hectares
• Project covers five municipalities: Moju, Tomé-Açú, Acará, Concórdia and
Abaetetuba
• Biodiesel production to begin in 2014
Benefits
Social – Social – 6,000 direct jobs created
• “Small Producer Project” to benefit 2,000 families of small rural producers in terms of:
– Technical assistance
– Guaranteed purchase of crop
– Financing from Banco da Amazônia
– Seeds supplied by Embrapa
Reduction in rural exodus, Reduction in rural exodus, promoting social inclusion promoting social inclusion and favoring sustainable and favoring sustainable economic developmenteconomic development
Benefits
EnvironmentalEnvironmental
• There will be no deforestation for planting
• Of the total of 130,000 hectares, 70,000 will be allotted for native habitat, to be
restored and protected by the consortium
• Using biodiesel will cut CO2 equivalent atmospheric emissions by 12 million
tons over the course of the project. This corresponds to emissions from more
than 200,000 cars over the period
Self-generation of Self-generation of electricity using biomasselectricity using biomass
• B20 used in EFVM and EFC trains• Vale’s Biodiesel Production Project developed
• B20 used in EFVM and EFC trains• Vale’s Biodiesel Production Project developed
• Vale Biopalma Consortium established to produce palm oil (main biodiesel input)• 5,000 hectares planted
• Vale Biopalma Consortium established to produce palm oil (main biodiesel input)• 5,000 hectares planted
• 12,500 hectares planted
• 12,500 hectares planted
• Fourth extraction plant installed• Biodiesel production begins
• Fourth extraction plant installed• Biodiesel production begins
• First oil extraction plant installed• 12,500 hectares planted• Harvest of first crop; oil production begins
• First oil extraction plant installed• 12,500 hectares planted• Harvest of first crop; oil production begins
• Vale’s Biodiesel Project continues in development
• Vale’s Biodiesel Project continues in development
• Second oil extraction plant installed• 15,000 hectares planted
• Second oil extraction plant installed• 15,000 hectares planted
• Third extraction plant installed• 15,000 hectares planted
• Third extraction plant installed• 15,000 hectares planted
Biodiesel at Vale – timeline
2007 2008 2009 2010 2011 2012 2013 2014
41%59%
• Partner with experience in palm oil production
• Property already acquired by Biopalma in strategic locations, minimizing risks
• Guaranteed continuity of project in partnership with a global company with a strong local presence and knowledge in Pará
• Business objectives of consortium partners do not conflict
Agricultural cropAgricultural crop
Output of 500,000 tons of palm oil per year
Oil extraction plantsOil extraction plants Biodiesel productionBiodiesel production Biodiesel blend distributionBiodiesel blend distribution
Output of 160,000 tons of biodiesel per year
Consortium Vale
Vale Biopalma Consortium
Vale’s consumption in Braziland in North System*
841
247
942
303
1006
343
940
336
1106
420
0
0
0
0
8
3
19
7
44
17
0
200
400
600
800
1.000
1.200
Brazil NorthSystem
Brazil NorthSystem
Brazil NorthSystem
Brazil NorthSystem
Brazil NorthSystem
2005 2006 2007 2008 2009 (forecast)
Mill
ion
lite
rs
Pure diesel Pure biodiesel (B100)
North System: Carajás mines, Carajás Railway, Ponta da Madeira Port North System: Carajás mines, Carajás Railway, Ponta da Madeira Port Terminal, and São Luís Pelletization PlantTerminal, and São Luís Pelletization Plant
North System: Carajás mines, Carajás Railway, Ponta da Madeira Port North System: Carajás mines, Carajás Railway, Ponta da Madeira Port Terminal, and São Luís Pelletization PlantTerminal, and São Luís Pelletization Plant
* Consumption will tend to grow over next few years