www.biovale.teiaslive.

net
biovaleenergia@gmail.com
 goal

To set up a pool of highly professional entities to
organize the bio-diesel production chain based on Jatropha
curcas feedstock (from soil to oil)

promoting sustained development and poverty
alleviation, creating opportunities and a new model for
the intensive and extensive use of the energy biomass
potential of Brazil.

Main focus: most vulnerable region of Brazil: Semi-arid,
particularly, Jequitinhonha and Mucuri Valleys, in the Minas
Gerais, Bahia and Espírito Santo States (Meso Vale)

Final target: to consolidate a socially responsible and state-of-art

biodiesel holding industry in Brazil in partnership with BIOVALE
ENERGY, a recently set up Brazilian corporation for this purpose.
 vision

“Take joint actions and improve efforts to work together

at all levels to improve access to reliable and affordable
energy services for sustainable development sufficient to
facilitate the achievement of the MDGs, including the
Goal of halving the proportion of people in poverty by
2015, and as a means to generate other important services
that mitigate poverty, bearing in mind that access to
energy facilitates the eradication of poverty”

( Summit on Sustainable Development in the

Johannesburg Plan of Implementation )
 Principles Commitments for Responsible Management

As a socially responsible corporation, we commit to the following :

1. We will incorporate ESG (Environment, social responsibility and Corporate

Governance) issues into general management, investment and decision-
making processes.

2. We will be active managers and incorporate ESG issues into our management
and investment policies and practices.

3 We will seek appropriate disclosure on ESG issues in our management and in

the entities in which we invest and/or attract investment.

4. We will promote acceptance and implementation of the Principles within our

organization.

5. We will mobilize to enhance our effectiveness in implementing the Principles.

6. We will report on our activities and progress towards implementing the

Principles.
In compliance with UN General Secretary initiative
UNEP – Finance Initiative – UN Global Compact
 Principles Commitments for Responsible Management

As a socially responsible organization, we have a duty to act in the

best long-term interests of our beneficiaries and partners.

In this fiduciary role, we believe that environmental, social, and

corporate governance (ESG) issues can affect our ability to attract
investment.

We also recognize that applying these Principles may better align the
beneficiaries with broader objectives of society

In signing the Principles, we publicly commit to adopt and

implement them, where consistent with our responsibilities.

We also commit to evaluate the effectiveness and improve the

content of the Principles over time.

We believe this will improve our ability to meet commitments to

beneficiaries as well as better align our investment activities with
the broader interests of society.
 Linking the various stakeholders

The main objective of the Hub is to bring capabilities of the various

stakeholders involved in the bio-diesel production chain, both in Brazil and
abroad providing resources and diffusing knowledge to the linked firms.

The benefits provided through such linkages are of great significance because
of the complimentary capabilities among the stakeholders.

Linkages with foreign organizations can be a great driver of dynamism and

competitiveness to develop effectively and rapidly the Brazilian bio-diesel
program. The foreign firms benefit from linkages are reduced costs, local
market and product intelligence and enhanced assets (UNCTAD 2001).

MINASINVEST´s interventions, as a leading IPA (Investment promotion agency)

are important to the extent that investors believe that an enterprising IPA can
assist them in identifying and introducing reliable local firms and
organizations with whom the investors can partner.

The linkage envisages upgrading domestic enterprises; facilitating the

transfer of technology, knowledge and skills; improving business and
management practices; and facilitating access to finance and markets.
Market scenario and prospects

the price of
crude oil tripled
between early
2002 and mid-
2005 while
natural gas
reaches a level
six times greater
than ten years
earlier.
Source: GTZ/WorldWatch Institute
 The growing gap

energy companies have not invested in building
enough refinery capacity to meet the growing level of
companies have
world demand. World oil production has gone up by 40% not been able to
in the past 20 years while refinery capacity has only find enough new
gone up 15%. oil and gas fields

to replace the
exhausting ones.

Oil is being
pumped out of
the ground three
times faster than
it is being
replaced by new
oil finds.

the oil reserves discovered between 1950 and 1980 are being run down.
Source: GTZ/WorldWatch Institute
 Will oil prices rise further?

"There are not enough large-scale projects in the development

pipeline right now to offset declining production in mature oil fields
and to meet global demand growth beyond 2007". (Chris Skrebowski,
the editor of the Petroleum Review )

The total amount of

energy that the world
gets from oil and gas
will begin to decline
after 2010.

Source: GTZ/WorldWatch Institute

 What alternative sources to fill the gap?

The global demand for oil is increasing by just over 2%

every year at present.

This increase in demand added to the gap being created
by the declining supply, implies new energy sources each
year equivalent to 4-5 per cent of the world's current oil
production:
around 1,800 million barrels of oil a year.

In 2015, when world gas output ceases to increase to

meet the its growing demand , the new energy sources
would have to increase the annual rate at which they grew

by another 900 million barrels.

Source: GTZ/WorldWatch Institute
 What will be the effect on the global economy?

a fall in global oil output will cause

the global economy to collapse.
Source: GTZ/WorldWatch Institute
 What alternative sources to fill the gap?

The only truly sustainable energy sources are those based

on the flow of energy from the sun: solar, hydro, wind,
wave, biomass.

These flows are very large in comparison with humankind's

use of energy.

Renewable sources can therefore meet all the world's

energy needs, both now and in the future.

The amount of energy supplied by renewable sources

could be 120 times its present level .
The problem is to develop these sources
quickly enough to fill the gap as it opens up.
Source: GTZ/WorldWatch Institute
 Biofuels: a Booming Industry

The world is on the verge of

unprecedented growth in the
production and use of biofuels , by
virtue of:

Rising oil prices, national security

concerns, the desire to increase farm
incomes, and a host of new and
improved technologies .

The two most prevalent biofuels are

ethanol and biodiesel.

World production of ethanol more

than doubled between 2000 and 2005,
while production of biodiesel
quadrupled.
 Biofuels: a Booming Industry

Brazil and United States

dominate the world ethanol
production and use.

The European Union, and

Germany in particular,
dominates world biodiesel
production and use.
 New Technologies, New Gains

Biofuel production
has become
substantially more
efficient over the last
25 years as Brazil and
the United States
have scaled up their
industries.

Such incremental
gains are likely to
continue for years to
come.

However, the greatest potential for biofuels lies in the

development of new technologies that will significantly expand
the range of biomass feedstock, increase conversion efficiencies,
and lower production costs.
 Brazil: the biomass source

Biofuels – the emerging solution for

everyone
“ Only in the Sun Country occurs the magnificent encounter
of the solar irradiation with the water, which generates a
stunning energetic profusion in its soil. This energy is a
heritage inherent to the Brazilian people and so it should be
exploited and used to promote its social and economic
development.” Artur Augusto Alves

The ability to grow energy crops in addition to food crops could

transform agriculture more profoundly than any development since
the green revolution - helping to achieve the United Nations’
Millennium Development Goals
 our challange
In modern economies, large scale poverty imposes an enormous
economic loss, wasting the talents and energies of hundreds of
millions of people , diverted from socially productive activities that
could create wealth for society to the struggle for mere survival.

The partnerships
should be at the
global level, at the
country level with
national
stakeholders and
external partners
acting together,
the private sector
and civil-society But the fundamental partnership, and
institutions ultimately the only one that counts, is with the
collaborating to poor themselves. They have the talents, the
create conditions
that emancipate skills and the knowledge of their own
poor groups. environment.
 Biofuels: A New Future for Rural Communities

One of the main benefits of biofuels is their potential to increase

farm incomes and strengthen rural economies. The World Bank
reports that biofuel industries require about 100 times more workers
per unit of energy produced than the fossil fuel industry.

In 2004, the Brazilian sugarcane sector was responsible for 1 million

jobs (direct)/4 million (indirect) corresponding to the production of
350 million tonnes of cane (UNICA, 2003 and Goldemberg, 2003).

The dispersed nature of agriculture makes it unlikely that biofuel

production will become as centralized as the oil industry.

In the focused region of the project (Jequitinhonha & Mucuri Valleys)

the access to modern forms of energy is limited or absent. An
orchastrated pool of competences involved in the biodiesel
production chain can help provide income and clean, accessible
energy that is vital for rural development and poverty alleviation.
 Energy & prosperity

Most poor households in developing

countries lack access to modern
fuels. They instead rely on traditional
biomass fuels like crop
waste,dung, and wood to meet their
basic energy needs.

When used with inefficient devices these

low-quality fuels often result in harmful
health and environmental impacts.

The order of fuels on the energy ladder

corresponds to their efficiency and
‘cleanliness’ at end use.
Although modern fuels tend to be more
costly, they do provide people with far
greater opportunities for income
generation.
Climbing the energy ladder towards more
modern fuels, therefore, is a challenge
most poor people in developing countries
must face in order to improve their
overall standard of living.

Source: REN 21/2006

 energy link to overall human development

There is an empirical
basis to the relationship
between access to
modern energy and
human development.

Energy is strongly linked

to human development.

No country in modern
times has substantially
reduced poverty without
a massive increase in its
use of energy and/or a
shift to efficient energy
sources.

Source: REN 21/2006

 Further benefits

In general, biofuels have a solidly positive GHG balance. Energy crops
have the potential to reduce GHG emissions by more than 100 percent
(relative to petroleum fuels) because such crops can also sequester carbon
in the soil as they grow.

Large deforested areas could be recovered by crops producing

vegetable oils in order to produce biofuels.

Even with subsidies, the economic savings with biofuels from avoided oil
imports are considerable: between 1975 and 1987, ethanol saved Brazil
$10.4 billion in foreign exchange while costing the government $9 billion
in subsidies. This investment paid off even more in subsequent years:
studies show that from 1976–2004, Brazil’s ethanol production substituted
for oil imports worth $60.7 billion—or as much as $121.3 billion including
the avoided interest that would have been paid on foreign.
 RET OPPORTUNITIES
 Renewable energy will have to supply a greater share of the world's
energy requirements.

 It is estimated that the market for clean energy technologies could

be worth $1.9 trillion by 2020. The financial sector has a key role to
play in developing and promoting this market.

 In the next 25 years, the world will consume all that has been
produced in fossil oils so far.

The world´s dramatic increment for fuels should be supplied by bio-

fuels.

 In the future, In the short run, ETHANOL and BIO-DIESEL are the
main bio-fuels.

Renewable energy is both a solution and a business

opportunity; BUSINESS AS AN AGENT OF WORLD BENEFIT
 Biodiesel - a Mutual Profitable Partnership

As oil prices and environmental concerns have risen in the past few
years, investment in new biofuel facilities has mushroomed in Brazil.

The Brazilian National Program for use and production was

incorporated in the Brazilian energy matrix by Law nr 11.097/2005 .

 Large trans-national corporations, as ADM, have already started

investing in biodiesel projects in Brazil

The crop area required to produce the blend of initial mandatory

2% of biodiesel will be 1.5 million hectares, equivalent to only 1% of
the total acreage under crops or available for agriculture throughout
Brazil (150 million hectares).

BIOVALE ENERGY: YOUR PARTNER IN BRAZIL – FROM INCEPTION TO CONCEPTION

Brazilian energy matrix
 Brazilian ethanol´s use and production

 PRODUCTION CAPACITY: 18 billion liters/year

 PRODUCTION: 15 billion liters/year (seed/2004/2005)
 EXPORTATION: 2.4 billion liters in 2004
SUGAR CANE PLANTED AREA: 5.6 million hectares
POTENTIAL FOR AGRICULTURAL EXPANSION IN BRAZIL:
90 million hectares of arable lands – Without any forest removal
INTEGRATED PRODUCTION OF SUGAR AND ETHANOL:
Provide production flexibility
UTILIZATION OF ETHANOL IN VEHICLES IN BRAZIL:
Automobiles, light commercials, motor-cycles and aircrafts
Flexible Fuel light vehicles: reached 37% of internal market sales in
2005
Brazilian National Plan for Biodiesel

The Nacional Program

for use and production
of Biodiesel (PNPB) is
a Federal Inter-
ministerial program
with an aim at
implementing a
sustained
development ,
technically and
economically. The
emphasis lies on social
inclusion and
employment/wealth
generation and
regional development
 Brazil: a global benchmark in RET

Brazil has ideal conditions for becoming a major world producer of

biodiesel. It has a vast amount of arable land, part of which is not
suitable for food crops but has the right soil and climate for
growing a range of oilseeds.

Biodiesel will make Brazil a global benchmark in the use of

renewable fuels.It first won this position in the 1970s with the
introduction of ethanol made from sugarcane to power automotive
vehicles.

The National Alcohol Program, Proálcool, was the largest fossil

fuel substitution program in the world automotive market. It is
still considered a global example of excellence, and Brazil remains
the largest producer and consumer of fuel alcohol in the world.

The experience Brazil has accumulated through the Proálcool

serves as a strong foundation for implementing the biodiesel
program and maximizing the nation’s competitiveness in a
relatively short period.
 Brazilian domestic market projection

 Law 11 097/2005: it sets forth a mandatory use of biodiesel

mixture to diesel, which reflects in the following prospects

2020
2020

20%
12,4
12,4
billions
billions
liters/year
liters/year

Source: MME
 Brazil’s export potential

With the launch of commercial production, Brazil

becomes a potential exporter of biodiesel.

The EU aims to ensure that 2% of all the fuel consumed

in the region is renewable by 2005, but it has limited
acreage available for growing rapeseed, the main
feedstock produced in Europe, and industrial capacity is
insufficient to meet the stipulated demand.

Despite these constraints, the proportion of renewable

fuels is set to reach 5.75% by 2010 according to EU
Directive 30, ratified by the European Parliament in May
2003.

Given the limitations for production growth in Europe,

Brazilian biodiesel enjoys an unprecedented opportunity
to build market share in the continent Europe.
Features of envisaged agricultural area:

Total semi-arid area: 1.219.021,50

Km2, equivalent to about 1/5 of Brazil
– comprising ten States Maranhão,
Piauí, Ceará, Rio Grande do Norte,
Paraíba, Pernambuco, Alagoas, Sergipe
e Bahia and Minas Gerais. Population:
1/3 of Brazil (55 million)
 Possible partners

Countries : Companies :

Bearing high agricultural
Having to meet social and
production costs environment responsibilities

Bearing internal/external
Bearing environment liabilities

obligations of emission reduction
(Kyoto Protocol and other
Willing to attract SRI
compromises) and valuing their stock prices

Bearing scarcity of cultivation
Bearing intensive need of fuel

lands sources

Willing strategic alternatives
Investors in prospective high

for diesel supply return SRI

BIOFUELS: FUTURE´S MOST PROSPECTIVE INVESTMENT

 Prospects of biodiesel cooperation/partnership

Possible areas of interest:

Utilization of Partners technology for biodiesel plants in

building, logistics, utilization of glycerin and other by-
products, specification, engine tests, etc.

Sale of carbon credits (MDL) obtained through the

utilization of biodiesel in Brazil.

Export of vegetal oil and biodiesel to Partner´s country.

Exploitation of the potential domestic market

 “Minas Gerais State
is getting ready to become the best State in Brazil
To live and invest.”
“ECONOMIC DEVEVELOPMENT SECRETARIAT OF MINAS GERAIS

BRAZIL AND MINAS GERAIS STATE:

THE BEST PLACE FOR INVESTMENT IN BIO-DIESEL PRODUCTION
 MINAS GERAIS STATE:
The ideal place for investments in Brazil

Strategically located in the Southeast region of

Brazil: concentrating 78% of Brazilian consuming
market .

18 million people.

Territory greater than many European countries.

Third largest South American economy.

Excellent infra-structure

Abundant energy and modern communication.

Modern law on on Public-private partnerships,
respecting obligations with investors and partners.

Expedient and practical action from Public
Administration

Strong competitiveness for new enterprises

Highly qualified labor

MINAS GERAIS State stands at a vibrant moment in its development,

introducing entrepreneurial changes, innovation, paradigm shifts, and
openness for new alternatives and investments.
 The State efforts

To achieve the efficacy, the State Government has undertaken a

profound revision of its structure, including the empowerment of the
development apparatus with a greater flexibility in order to meet the
new demands of society .

The objective of Minas Gerais development is now to increase the

competitiveness of its economic base, targeting the state’s supply
chains, transforming comparative advantages into real and enduring
competitive advantages.

The new model gives primacy to the private initiative in determining

the economy’s dynamic as well as an elevated degree of openness to the
international economy.

Bio-fuels production has driven special attention from the State

Government and counts with its full support and incentives.
 The State program for bio-fuels

The program, set forth in Law no. 15.976/2006 has the following goals:

Research and technology development;

Technology transfer to the private sector;
Job posts creating and improvement of income distribution;
Reduction of fossil diesel imports;
Reduction of gas pollution emission;
Development of Feed-stock production

Targets up to 2007/2008 :

250.000 hectares crop plantation for production of B2 (blend 2% ),

reaching 625.000 he for production of B5 in 2013;

Direct income generation to 100.000 families, corresponding to about

500.000 job posts up to 2007.
 Focus: surrounding of CEMIG´s Irape Hydroelectric plant

Cemig – Companhia Energética de Minas

Gerais, is one of the largest electric energy
utilities in Brazil.

With an installed capacity of more than 6

thousand MW (6 GW), the company is in
charge of the operation of a 330-thousand-
kilometer distribution network, the largest in
Latin America, and supplies energy to over 16
million people living in the state's 774
municipalities.

Cemig is permanently
forming partnerships with other
entrepreneurships which is generating
substantial investments.

For the sixth consecutive year, Cemig was

listed in the Dow Jones Sustainability World
Index – DJSI World.
Main features of the focused region

Our local partners

And environment
Local productivity capacity
 Jatropha curcas: the feedstock

Perennial crops of Jatropha Curcas will be used to protect lands that are
vulnerable to erosion and to restore lands degraded by grazing.

The yields of currently used biofuel feedstock vary widely. Jatropha

seeds have proven advantageous in several spheres.
 Jatropha curcas: the feedstock

Jatropha is identified under the physical-chemical platform of

biomass energy conversion route. It is a drought-resistant
perennial, living up to 50 years and growing on marginal soils
(HENNING, 1996).

The remote rural communities of the Brazilian semi-arid in drought

regions will be able to address their energy needs using the
Jatropha resource.

The Jatropha Curcas was especially selected because the plant is

not an invasive species (GÜBITZ ET AL., 1999) and permits the
growth of other plants in its vicinity, so it does not negatively
affect the ecosystem.

The results of the researches developed by EPAMIG, the State

Agriculture R&D entity, in the 80´and the preliminary current
( 2004/2006) results attest the potentiality of the jatropha curcas
cultivation in the semi-arid region
 Professional management

Implementation goals

Internal External
capabilities capabilities

Professional
POOL
monitoring
Roles of strategies
stakeholders

Resources Action plan

management
 Development model

The development model is based on the working

relationship between the community benefiting
from the BIO-VALE project, a local technical NGO,
an enterprising development agency , a foreign
development agency, Government stakeholders
and a corporation.

Each entity has its respective and important roles

that complement, harmonize and support one
another leading to the ultimate success and
sustainability of the project.
“The private sector can play an important role
towards furthering development, for development
cannot occur without conditions that are amenable to
the conduct of business.” (United Nations)
 Development model: local NGO

Local NGO´s will support following types of interventions:

establishing effective monitoring and evaluation systems, working

closely with cooperating institutions to improve impact assessment
and supervision, and strengthening partnerships with a range of
different players.

promoting a global policy environment that increases market access

for the rural poor.

directly responsibility to the community - directly involved in the

energy crop cultivation and oil extraction than the development
agency, assessing the communities’ organizational capacity and their
potential to complete and manage an energy project.

providing technical, organizational advice, support and training to

the community
 Development model: Investment agency

MINASINVEST, a not-for profit investment agency, will be primarily in

charge of the social-economic factors coordinating the efforts among
the various stakeholders, which includes:

enhancing logistics, building market information systems.

Identifying and coordinating the best partners;

Developing policies and strategies to improve competitiveness;

Strengthening the producers´ negotiating position ;

Providing well-researched analyses;

Government and institutional relationships involved in the project.

 Development model:The Community

The local community possesses direct responsibility towards the day-

today running of the biofuel project . Particular emphasis is given on
the socio-economic empowerment of women, thus women groups will
be specially utilized to manage the project.

The role of the community should therefore be:

● Provision of land for Jatropha plantation and site for the

establishment of the oil extraction unit.
● Responsibility for the day-to-day management of plantation,
including: cultivation and harvesting.
● Commitment of human resources for project development such as
unskilled labor (to handle farmlands), access to skilled labor.

In order to help the community in their quest towards sustainable

development, it is very important that they should be the main
recipient of all benefits accrued from the project.
 BIOVALE ENERGY & PARTNERS

GENERAL CORPORATE ACTIVITIES

General coordination among the various stakeholders
Resources (financial and management)
Industrialization: oil extraction and trans-esterification
Logistics (sales, distribution, export process, shipping)

GENERAL CONSULTING ACTIVITIES

turn-key/Global solution in BioDiesel projects
Research & Development
Institutional and Government support
Project development, Project Financing an Funding
International product commercialization
Logistics (sales, distribution, export process, shipping)
 conception
The BIO-VALE project can bring about major economic
empowerment by providing income and employment
opportunities to both the rural communities and entreupreneus.

The project can be utilized to stimulate a circular system

combining ecologic, economic, and income-generating effects
(HEN. 1994), particularly to the drought prone rural
communities of the Brazilian semi-arid regions.

The project promotes the main aspects of development, which

combine to help achieve a sustainable way of life for village
farmers in terms of provision of renewable energy, erosion
control, economic empowerment through job creation and
poverty reduction and economic development.

The favorable context in Brazil, the onset of widespread

distribution, the differential tax regime recognizing the
importance of oilseed production by family agriculture units– and
the introduction of the “Social Fuel” label are regulatory
instruments designed to promote social inclusion throughout the
new fuel’s production and value chain.