p701 analysis of economic sustainability of brazilian bioethanol production...

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VII Workshop Brasil Japão 24 P701 ANALYSIS OF ECONOMIC SUSTAINABILITY OF BRAZILIAN BIOETHANOL PRODUCTION IN PRESENT AND FUTURE SCENARIOS Michelle Low 1 , Eduardo Ono 2 , Florian Dollinger 3 , Eric Fujiwara 2 , Carlos E. V. Rossell 4 , Carlos K. Suzuki 2 [email protected], [email protected] 1 Technische Universitaet Muenchen (TUM), Department of Mathematics, Germany. 2 UNICAMP, Faculty of Mechanical Engineering, Laboratory of Materials and Photonic Devices, Brazil. 3 Technische Universitaet Muenchen (TUM), Faculty of Electrical Engineering and Information Technology, Germany. 4 Bioethanol Science and Technology Center – CTBE, Brazil. ABSTRACT Future fuel supply presents today one of the most important global challenges. Brazil as the world's second largest producer of ethanol fuel and the world's largest exporter is already supporting the solution finding process. If produced in a sustainable way, with government support and conscious policy, Brazilian ethanol from sugarcane has a potential to displace 5–10% of projected gasoline worldwide use in 2025. Although sugarcane has proven to be a superb renewable feedstock for ethanol production, future trends for sugarcane production in Brazil based on many prospects found in the literature have been promoting many controversial discussions about environmental issues such as tropical deforestation, monoculture impairments, water use, and competitiveness of comestible goods. With ethanol production becoming one of Brazil’s most important industrial sector, its economic sustainability can be reinforced with the development of new technologies, without neglecting social and environmental aspects. Analysis of the current production process (1st generation) has shown several flaws, identified in different sub-processes which include washing, milling, fermentation, and distillation. In this processing, about 14.1% of overall production costs are dissipated, corresponding to an essential financial loss of approximately US$ 9 million per day for the whole country. In particular, thereof 36.6% are caused by fermentation, 26.4% by milling, and 28.6% are caused by flaws not yet identified. Advanced solutions such as optical fiber sensors technology are already available or in development, which can provide a significant positive impact in ethanol productivity in present and future scenarios.

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P701

ANALYSIS OF ECONOMIC SUSTAINABILITY OF BRAZILIAN BIOETHANOL

PRODUCTION IN PRESENT AND FUTURE SCENARIOS

Michelle Low1, Eduardo Ono2, Florian Dollinger3, Eric Fujiwara2, Carlos E. V. Rossell4, Carlos K.

Suzuki2

[email protected], [email protected] 1Technische Universitaet Muenchen (TUM), Department of Mathematics, Germany. 2UNICAMP, Faculty of Mechanical Engineering, Laboratory of Materials and Photonic Devices, Brazil.

3Technische Universitaet Muenchen (TUM), Faculty of Electrical Engineering and Information Technology, Germany. 4Bioethanol Science and Technology Center – CTBE, Brazil.

ABSTRACT

Future fuel supply presents today one of the most important global challenges. Brazil as the world's second largest producer of ethanol fuel and the world's largest exporter is already supporting the solution finding process. If produced in a sustainable way, with government support and conscious policy, Brazilian ethanol from sugarcane has a potential to displace 5–10% of projected gasoline worldwide use in 2025. Although sugarcane has proven to be a superb renewable feedstock for ethanol production, future trends for sugarcane production in Brazil based on many prospects found in the literature have been promoting many controversial discussions about environmental issues such as tropical deforestation, monoculture impairments, water use, and competitiveness of comestible goods. With ethanol production becoming one of Brazil’s most important industrial sector, its economic sustainability can be reinforced with the development of new technologies, without neglecting social and environmental aspects. Analysis of the current production process (1st generation) has shown several flaws, identified in different sub-processes which include washing, milling, fermentation, and distillation. In this processing, about 14.1% of overall production costs are dissipated, corresponding to an essential financial loss of approximately US$ 9 million per day for the whole country. In particular, thereof 36.6% are caused by fermentation, 26.4% by milling, and 28.6% are caused by flaws not yet identified. Advanced solutions such as optical fiber sensors technology are already available or in development, which can provide a significant positive impact in ethanol productivity in present and future scenarios.

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INTRODUCTION

Nowadays petroleum oil is the major energy source and the whole world is searching for a renewable alternative to petroleum. To substitute its dependency presents one of the most significant global future challenges. Scientists have been analyzing all worldwide existing resources. Based thereon they have forecasted secured supply for less then a century. Therefore alternative fuel finding has become a crucial issue. In particular, means of transportation consume huge amounts of crude oil, which can not yet be totally replaced by any other resource. Given that in 20 years the main form of transportation fuel will still be liquid fuel, the technological vision for 2020–30 is that biofuels will evolve to those that will integrate seamlessly into current transportation refining to end use fuel systems. In this scenario, bioethanol has become an important alternative fuel since it is produced economically using renewable biomass. Worldwide demand for bioethanol is growing rapidly. This has risen the question whether is possible to replace the dependency on fossil fuels by renewable alternative fuels. According to professor Rogério Cezar de Cerqueira Leite, Brazilian ethanol has a potential to displace 5–10% of projected gasoline worldwide use in 2025 with existing technology, by using only 21 million hectares of land, less than 7% of current Brazilian arable land, to produce the necessary ethanol [1]. However calculations have shown that if bioethanol is produced in a sustainable way it has the potential to become one of the most important alternatives for global fuels demand in a near future. The present study reports a preliminary analysis of sustainability of ethanol production in Brazil, using sugarcane as feedstock, in present and future scenarios based on data projections and information found in the literature.

FUNDAMENTALS

Brazilian ethanol experience

Brazil presents today the major global sugarcane production. With a vast and very favorable land for cultivation (Figure 1), last 30 years of experience resulted in a very efficient cane which forms an outstanding base for ethanol production. The 2007/2008 harvest season was a record, 490 million tons, processed in more than 370 mills, all self-sufficient with bioenergy generation [2]. As 70% of the ethanol production costs are raw material [1], all improvements in productivity have a great impact on the sustainability of the Brazilian ethanol industry.

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Figure 1. Potencial for sugarcane production: soil and climate without (left) and

with irrigation (right) [3], [4].

Ethanol production from sugarcane on the basis of “1st-generation technology” (fermentation – distillation) replaces today 1% of the worldwide gasoline in use [5] and is highly competitive in economic terms with ethanol produced from other crops in the US and Europe (Table 1).

Table 1. Characteristics of different crops for ethanol production [5].

Sugarcane (Brazil)

Corn (USA)

Sugar beet (Europe)

Energy balancea 8.1–10 1.4 2.0

Production cost (€ / US$ [6])/liter 0.145 / 0.22 0.248 / 0.28 0.524 / 0.78

CO2 reduction compared to gasoline 84% 30% 40%

Total production (billion liters) 24.5 34 2.8 [7]

Cultivated area (million hectare) 3.4 8.13 0.33

Yield (liter/hectare) 6471 4182 5500b

a Defined as energy output in a liter of ethanol over fossil energy needed to produce.

b Theoretical yield, as presented by Word Watch Institute, 2006.

Ethanol production in 2007/2008 season was 25% over 2006/2007 (85% internal and other 3.6 billion liters remaining to export), a success due to E20–E25 (% anhydrous alcohol in gasoline) and the flex fuel engine technology (Figure 2), which can operates with any ethanol-gasoline mixture [2]. With 89% of global ethanol production [7], Brazil (37%) and USA (52%, corn based) have already started developing the “2nd-generation technology” (lignocellulose hydrolysis) for ethanol production [8], which will make use of almost all kind of biomass, including agricultural residues and organic waste. As a byproduct of the current ethanol production, sugarcane bagasse is an excellent alternative to Brazil. It is expected that, by 2025, the ethanol productivity by area can

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increase up to 40–50% [6] with this new technology, so that the ethanol production will increase with no expansion of cultivated areas.

Figure 2 Brazilian new cars and light vehicles market (jan/03–may/08) [2].

Overview of Brazilian sugarcane production [9]

Sugarcane cultivation in Brazil is based on a ratoon-system, which means that after the first cut the same plant is cut several times on a yearly basis. The complete sugarcane crop cycle is variable, depending on local climate, varieties and cultural practices. A 6-year cycle, in which five cuts, four ratoon cultivation treatments and one field reforming are performed [10]. The cultivation process has continuously been optimized, leading to several harvests during the season from May to November. Before planting in the first year, the soil is intensively prepared by, nowadays most mechanical, operations such as sub soiling, harrowing and application of mineral fertilizers. After this the soil is furrowed and phosphate-rich fertilizers are applied, seeds are distributed and the furrows are closed and fertilizers and herbicides are applied once again. The plant is furrowed and treated with artificial fertilizers or ‘filter cake’1 once or twice again during cultivation in the first year. After 12–18 months the cane is ready for the first cut and it is (still) common to burn down the cane in order to simplify manual harvesting. Mechanical harvesting is applied by approximately 25% of the cane in Sao Paulo State. Machinery green cane harvesting is possible but usually only on sloped areas inferior to 12%. Also, the celluloid leaves are left on the field as organic fertilizer. After cutting and sometimes chopping cane stalks by a chopped cane harvester, the cane stalks are loaded in trucks and transported to the industrial plant. Burning and delays before processing such as loading and transport lead to significant losses of the amount of sucrose per ton. Losses of 6–10 kg

1 Filter cake is a rest product of sugar and ethanol production, it contains large amounts of nutrients, which are filtered out of the juice in the sedimentation process.

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TRS within the first 72 hours is normal, which stresses the importance of quick harvesting, loading and transportation. Then the cycle starts all over again but excluding intensive soil treatments and planting. Depending on the rate of the declining yields, the same stock can be used. Yields decline with approximately 15% after the first harvest and 6–8% in the years that follow. During preparation for the next season, the soil is treated less intensively but fertilizers and herbicides must be used. A simplified overview of the production process of sugarcane is shown in Figure 3. Processes between brackets are only necessary at the beginning of the ratoon-system.

Figure 3. Simplified overview of sugarcane production [11].

Overview of Brazilian ethanol production process

The procedure to get ethanol out of sugarcane is a sequentially and complex process (Figure 4). At first the sucrose has to be extracted from the cane. After washing and cleaning, the cane is cut and shredded to open the cell structures. The following step is milling, therefore several pressurized rollers in series are used. The bagasse, residue of sugarcane after the same is milled, is recovered at the last mill. The task of the next stages is to clean the juice, containing the removal of sand and fibre as the removal of suspended solids and impurities. Sequentially the fermentation follows to convert the sugar to alcohol by addition of yeast. During this step the juice is thickened, sterilized and finally fermented. A large amount of carbon dioxide is additionally generated and yields to a huge loss of ethanol, because the emerged gas stream contains parts of the produced alcohol. Afterwards, the distillation separates the fermented wine from main resting solid components in one or two columns. The product is hydrous alcohol (93.5% ethanol and 6.5% water). Finally, a dehydration process converts the hydrated alcohol to anhydrous alcohol (99.3–99.5% ethanol).

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Figure 4. Simplified overview of the current Brazilian model for industrial production process of sugar,

ethanol and bioelectricity [11].

METHODOLOGY

Analysis of economic sustainability

Future scenarios for economic sustainability of ethanol production were analyzed according to data projections found in the literature (Table 2).

Table 2. Future projections for production of sugar, ethanol and bioelectricity in Brazil [2].

2006/2007 2010/2011 2015/2016 2020/2021

Sugarcane production (M ton)

Area (M ha) 430

6.3 601

8.5 829

11.4 1,038

13.9

Sugar (M ton)

Internal Export

30.2

9.9 20.3

34.6

10.5 24.1

41.3

11.4 29.9

45

12.1 32.9

Ethanol (Billion liters)

Internal Export

17.9

14.2 3.7

29.7

23.2 6.5

46.9

34.6 12.3

65.3

49.6 15.7

Bioelectricity (GW average)

Participation in Brazilian energetic net 1.4

3% 3.3

6% 11.5

15% 14.4

15%

Analysis of environmental and socio-economic impacts

The increasing production of ethanol is a very controversial subject. Ongoing debates include net energy, diverting agricultural resources to fuel instead of food production, water use, and the potential impacts of land use due to the cultivation of sugarcane feedstock [1]. Indeed, the

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sustainability of a product system can not be assured without analysis of its environmental and social impact. The environmental impact of a product (good or service) must consider its entire life cycle, from extraction of raw materials through manufacturing, logistics and use to scrapping and recycling [12]. Life cycle assessment (LCA) is a method for determining the environmental impact of a product during its entire life cycle; hence it is a valuable tool for quantifying environmental impacts of a defined product system. LCA of 1st- (Figure 5) and 2nd-generation ethanol (Figure 6) from sugarcane was used to identify key areas of concern on the analysis of environmental impacts for present and future scenarios and it was established a quantification of these areas according to three levels of concern: low, medium and high, based on the literature review.

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Figure 5. The life cycle of 1st-generation bioethanol from sugarcane [12].

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Figure 6. The life cycle of 2nd-generation bioethanol from sugarcane [12].

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RESULTS

Production of sugarcane, sugar, and ethanol

Despite a linear increase in sugarcane production (Figure 7), it is expected an emphasis in ethanol production (Figure 8) over sugar production (Figure 9) in future scenarios. This tendency is very clear by the comparison between ethanol production rate (Figure 10) and sugar production rate (Figure 11).

Sugarcane Production

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Sugarcane [Million tons]

Sugarcane Curve Fitting

Figure 7. Projections for sugarcane production.

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Ethanol Production

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Ethanol Curve Fitting

Figure 8. Projections for ethanol production.

Sugar Production

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Sugar [Million tons] Sugar Curve Fitting

Figure 9. Projections for sugar production.

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Ethanol Production Rate

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Sugarcane [liters/tons]

Ethanol Prod. Rate Curve Fitting

Figure 10. Projections for ethanol production rate.

Sugar Production Rate

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Produced Sugar/Produced

Sugarcane [tons/tons]

Sugar Prod. Rate Curve Fitting

Figure 11. Projections for sugar production rate.

Calculations have shown that if ethanol is produced in a sustainable way it has the potential to become one of the most important alternative fuels. The Brazilian goal to displace 5–10% of the projected gasoline worldwide use in 2025 seems to be very realistic for a world consumption of gasoline estimated in 1.7 trillion liters by 2025. Learning curves makes ethanol prices very favorable (Figure 12), leading Brazil to manufacture 102 billion liters to cover the expected demand.

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Figure 12. Ethanol learning curve [13].

With an arable area of 12.4% available for expanding the sugarcane cultivation (Figure 13) and infrastructure for a large ethanol production across the country, all expectations can even be exceeded: 615 distilleries in 12 selected areas can produce 104 billion liters of ethanol, according to future projections. Facility costs are estimated at 100 million US$ per facility and 40 million US$ for agriculture related investments. Assuming the price for ethanol at 0.31 US$/L it will result in an overall benefit of around 31 billion US$ in exports per year [1].

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58.3%

12.4%

20.2%9.01%

Crop land Pastures Available area Non-arable land

Figure 13. Land use in Brazil [14].

New technologies and innovations for ethanol production expansion

• Improvements on 1st-generation ethanol production process The potential of “1st generation technology” for the ethanol production from sugarcane is far from being exhausted. There are gains in productivity of approximately a factor of two from genetically modified strands and a geographical expansion by a factor of 10 of the present level of production in many sugar producing countries [5]. In Brazil, despite an experience over 30 years developing this technology, some losses still remain in current production process. Identification of these losses (Figure 14) has been crucial for developing new technologies for process optimization.

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Figure 14. Identified losses in sugar, ethanol, and molasses industrial process flow [15].

Quantification of processing losses presented a total loss of 14.14% of total production (Table 3), causing a financial loss of approximately 9 million US$ per day for the whole country [16]. Losses due to fermentation, milling and undetermined losses has lead to 91.6% of the total loss.

Table 3. Losses on current ethanol production process [17].

Loss origin Value (%)

Contribution (%)

Washing loss 0.47 3.32

Milling loss (bagasse) 3.73 26.38

Clarification loss (mud) 0.54 3.82

Fermentation loss 5.17 36.56

Distillation loss (vinasse) 0.18 1.27

Undetermined loss 4.05 28.64

Total (%) 14.14 100

Part of these losses is strictly correlated to the lack of control of the concentration on the ethanol stream during the whole process. Currently applied methodologies for the measurement of concentration are based on laboratorial techniques, in which the samples are periodically collected in specific points of the plant and the analysis is carried out on the laboratory. Due to the delay between acquisition and measurement, the control system is not capable to reestablish the nominal

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concentration in sufficient time, making the re-distillation process necessary and generating production losses [18]. Automated methods for on-line measurements have been developed in order to improve the response, reproducibility, and precision, allowing the determination of very small concentrations [19]. Most of these obstacles can be successfully bypassed by the optical fiber sensors technology. Nowadays, several optical fiber sensoring systems for the determination of the concentration in ethanol-water solutions were proposed based on different techniques, such as the Fresnel reflectometry. However, most of the optical fiber sensors are still not commercially available, requiring an intensive research and development in order to achieve the desirable performance, also demanding the cost reduction of the final product. Nevertheless, it is expected that this problem can be suppressed by the advances of the optoelectronic industry, and the research on specialty optical fibers. Another important aspect to be considered in the optimization of the alcoholic fermentation process is the development of an efficient control strategy, since it can minimize costs and environmental impact by maintaining the process under optimum conditions. However, biotechnological processes are characterized by their complex dynamics, such as inverse response, dead time and strong non-linearities. For these reasons, modeling and control of those systems are still important problems that have to be solved [20].

• Development on 2nd-generation ethanol production process According to data projection listed in Table 4, the 2nd-generation technology (lignocellulose hydrolysis) will provide a huge impact on the ethanol productivity.

Table 4. Potential for bagasse transformation in ethanol (liters////ton bagasse) [21].

Scenario Efficiency (%) Ethanol

hexoses fermentation pentoses fermentation distillation Hexoses Pentoses Total

1 60 89 70 0 99.5 69.1 0 69.1

2 80 91 85 0 99.75 94.2 0 94.2

3 80 91 85 50 99.75 94.2 37.9 132.2

4 85 89 70 0 99.5 97 0 97

5 95 91 85 50 99.75 111.4 37.9 149.3

This technology, still in development, can be available and fully operational in 2015 (Table

5). However, the production cost of ethanol (R$ ~1.25/L) will be prohibitive for industrial

production. In 2025, it is expected that production cost will be around R$ 0.75/L [22], almost in the same level of actual production. In Table 5 it is illustrated the impact of 2nd-generation technology in total ethanol production.

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Table 5. Impact of the 2nd-generation technology on ethanol production [3].

Technology 2005 2015 2025

L////TC L////ha L////TC L////ha L////TC L////ha

Conventional (1st-generation)

85 6,000 100 8,200 109 10,400

Hydrolysis (2nd-generation)

-- -- 14 1,100 37 3,500

Total 85 6,000 114 9,300 146 13,900

Key areas of concern for sustainability of ethanol production

The key areas of concern have been identified (Table 6) based on LCA of ethanol production and literature review. Most of these areas are related to sugarcane cultivation and some presenting low concern areas were identified as being of potential risk for the sustainability in future scenarios.

Table 6. Environmental areas of concern.

Concern on present scenario Concern on future scenarios

GHG emission low ([23], [24])

medium ([21], [25]) high ([26])

low ([21]) high ([26])

Water use low ([23])

medium ([21]) high ([25])

medium ([27])

Water polution medium ([23]) high ([25], [28])

medium ([23])

Land use, forest protection and biodiversity low ([23], [24]) high ([25])

low ([24])

Soil erosion low ([23]) high ([25])

low ([23])

• GHG emission: By 2007, around 40% of the sugarcane in the Sao Paulo State was harvested without burning (Figure 15). For the 2020 scenario, the banishment of trash burning and the reduction of mineral fertilizers application will lead to drastic emissions reduction, although there might be a small increase of emissions associated to the residues that are returned to soil. In short, the emission not derived from fossil fuels use would be reduced from 19.5 kg

CO2/TC (in 2005/2006) to 11.6 kg CO2/TC (2020) [22].

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Figure 15. Sugarcane harvest burning phase-out [23].

• Water use: Crop irrigation is generally not economically feasible and is not applied, except in the northeastern region, due to climate conditions [23], and some dryer areas in the West of Sao Paulo State. In future scenarios, irrigation is expected to increase as a result of the increase in cane production [27]. The industrial total use of water was calculated to be 21 m3/TC in 1997, of which 87% was used in four processes: cane washing, condenser/multijet in evaporation and vacuum, fermentation cooling and alcohol condenser cooling [23]. However most of this water is reused and the water collection (water intake) has decreased

significantly over the years from 5.6 m3/TC (1990–97) [23] to an actual rate of 1 m3

/TC [6]; also, the release treatment efficiency is more than 98% [23]. The overall result is that for each kg of CO2 avoided, at least 217 L of water are required [29]. However, more development is

necessary for the 2nd-generation ethanol, which requires 3–4× more water use than the 1st-generation ethanol [21].

• Biodiversity: Although there is a large land to expand crops production, a monoculture of sugarcane in large scale has an unknown effect in natural ecosystem, Also, careful consideration must be implemented when weighing the benefits from a rather vast and infertile plain with a preserved ecosystem compared with the need and ability to morph the existing land into highly productive crop fields.

Relevant socio-economic areas of concern were identified (Table 7) followed by important observations.

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Table 7. Socio-economic areas of concern.

Present scenario

Future scenarios

Number of jobs low ([23]) low ([23])

Working conditions and child labor medium ([23], [28]) low ([23], [28])

Competition with food production low ([23]) low ([23]) high ([28])

• Number of jobs: For every 300 million tons of sugarcane produced, approximately 700,000 jobs are created [23]. However, future job and income creation is an essential area for a very wide range of workface capacity building programs, with the flexibility to support local characteristics using different technologies. Brazil’s labor legislation is well known for its advances in workers protection. For sugarcane cultivation, local problems still exist but work conditions in sugarcane crops and specific aspects of employment relations in agriculture seem to be better than in other rural sectors.

• Competition with food production: According to professor Goldemberg, there is no threat for food security (Figure 16). However, reduced food productions, increased food prices, and threats to food sovereignty can present a real concern if crops are expanded to take up a much larger land area. Instead of growing food to feed an already significantly hungry nation, farmers would concentrate on producing crops for biofuels. This produces a strain on crops used for food. Without political intervention, food prices will increase and food production will decrease. Many citizen organizations in Brazil argue that expansion of ethanol production would subvert the needs of the people and ecosystems in order to maintain the lifestyle of other rich countries.

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Figure 16. Cultivated area in Brazil (1990–2007) [14].

CONCLUSIONS

Future scenarios are very favorable to displacement of a significant amount of gasoline use if ethanol can be produced in a sustainable way. Potential gains are still latent in conventional production process but waiting for new technologies and innovations to emerge. A promising 2nd-generation technology might be the key to a main global alternative biofuel. On the other hand, the predominance of the 1st-generation technology will extend for the next three decades. Therefore, the development and use of new technologies to minimize the flaws at several ethanol processing stages is of fundamental interest, both on economical and sustainable points of view. In particular, online sensors and automation techniques, such as the case of a “real-time optical fiber sensing of the ethanol concentration in multiple processing stages” (this Conference), can make a great impact in the productivity with a financial gain of approximately 6 million US$ per day for the whole country.

ACKNOWLEDGEMENTS

The authors would like to acknowledge FINEP/PADCT-III, Fapesp/PIPE, CNPq/Universal, CNPq/RHAE and CAPES for the financial support. One of the authors (Fujiwara E.) would like to

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acknowledge the scholarship from CAPES. Two of the authors (Dollinger F. and Low M.) would like to acknowledge the assistance from IAESTE.

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