1. Workshop on “Integrated development and climate policies: How to realize benefits at national and international level?” Suzana Kahn Ribeiro PROFESSOR Engineering Transport Programme Federal University of Rio de Janeiro- Brazil 20-22 September 2006 Paris INICIATIVES IN TRANSPORT SECTOR WITH GHG EMISSION REDUCTION AS CO-BENEFIT: ANALYSIS OF FUEL EFFICIENCY,ETHANOL USE IN FLEX-FUEL VEHICLES AND THE BIODIESEL PROGRAM IN BRAZIL

2. World Oil Consumption per Sector 1973 Transport 42% Industry 27% Non Energy Use 6% OtherSectors 25% 2004 Industry 10% NonEnergy Use 17% Transport 58% OtherSectors 15% 42% 58% +16% TRANSPORT SECTOR RELEVANCE (IEA, 2006)

3. TRANSPORT SECTOR RELEVANCE WORLD OIL BY-PRODUCTS - 2004 –43% of total energy final consumption = 3.2 Gtep; –40% CO 2 emissions = 10.6 Gt; –Transport sector consumption : 58% = 1.9 Gtep. Oil BY-PRODUCTS IN BRAZIL - 2004 –40% of total energy final consumption = 71 Mtep; –Transport sector consumption: 61% = 43 Mtep. 96,7% Road 99,7% Road (IEA,2006) (MME,2005)

4. TRANSPORT SECTOR RELEVANCE Transport Energy by Region (WBSD,2004)

5. TRANSPORT RELATED PROBLEMS Oil dependency; Congestion; Poor air quality in urban centers. Solutions to these problems rely on: Policies towards higher energy efficiency in transport as well as transport sector efficiency; Transport policy towards energy matrix diversification.  Leading to a CO 2 emission reduction as co-benefit.

6. Fuel Efficiency Increase In the case of new light vehicles : Vehicle Labelling Program; In the case of light vehicle in use: Inspection/ Maintenance Program; In case of heavy duty vehicles: Inspection/ Maintenance Program. Oil Dependency Reduction Increase in Hydrous Ethanol (sugar cane) consumption: Flex-Fuel technology; Biodiesel (soybean) in heavy duty vehicles: National Biodiesel Program. ANALYZED INITIATIVES

7. Fuel Efficiency Transport Sector EconomicStrategicSocialEnvironmental DRIVING FORCES

8. Vehicle Labelling EconomicSocialEnvironmental Gasoline and ethanol consumption reduction Urban air quality improvement Health improvemnt DRIVING FORCES

9. Inspection & Maintenance Programs for Light Vehicles in Use EconomicSocialEnvironmental Gasoline and ethanol consumption reduction Urban air quality improvement Health improvement DRIVING FORCES

10. Inspection & Maintenance Programs for Heavy Vehicles in Use EconomicStrategicSocialEnvironmental Diesel oil consumption reduction; Maintenance cost reduction. Urban air quality improvement Health improvement Imported oil dependency reduction DRIVING FORCES

11. Flex Fuel Technology EconomicSocialEnvironmental Enhance Agribusiness; Reduce gasoline consumption; Promote sustainable regional development; Renewable Fuel Job Generation DRIVING FORCES

12. Biodiesel National Programme EconomicStrategicSocialEnvironmental Urban air quality improvement Health improvement Energy matrix diversification Job Generation Enhance Agribusiness; Reduce imported diesel dependency Promote sustainable regional development; DRIVING FORCES

13. Obtained Results Fuel Efficiency Increase Labelling Programe Assumptions: Vehicle labelling system proposed for the EU by the European Community Commission; Light vehicles (gasoline) in São Paulo municipality; Assessment period : 2000 to 2004. Results: Consumption of 141 million litres of gasoline could have been avoided. Co-benefit: Emission of 311M tons of CO2 could have been avoided.

14. Obtained Results Fuel Efficiency Increase Considered Data: Assessment period : 2002; Rio de Janeiro Metropolitan Area; 1.616.273 Light Vehicles. Results: Avoided Emissions: 56,000 – 124,000 ton CO; Avoided Gasoline : 73 -126 M liters; Co-benefit: Avoided Emissions : 0.207 – 0.354 M tons of CO2. Inspection/ Maintenance Program – Light Vehicles (Petrobras, 2006)

15. Obtained Results Fuel Efficiency Increase Considered data: Assessment period : 1996 – 2002 and 2003 -2005 Buses and trucks (130,000 vehicles in 1996-2003) 22 states in Brazil; Results: 1996-2003: 300 M liters/year of diesel and 18,000 ton/year of PM avoided ; 2003-2005: 321 M liters/year of diesel and 19,200 ton/year of PM avoided; Co-benefit: Avoided Emissions in 1996-2003: 0.80 M tons of CO2/year ; Avoided Emissions in 2003-2005: 0.86 M tons of CO2/year. Inspection/ Maintenance Program – Heavy Vehicles (Petrobras, 2006)

16. Obtained Results Oil Dependency Reduction Flex-Fuel Technology Assumptions: Assessment period : 2003 to 2006; Light vehicles in South East and South Region; Results: Avoided Gasoline: 8.3 – 9.9 Billion liters. Co-benefit: Avoided Emission: 23 - 27 M tons of CO2.

17. Obtained Results Oil Dependency Reduction National Biodiesel Program Assumptions: Assessment period : 2005 to 2006; Brazilian fleet fueled by mineral diesel consumes the mixture B2 of biodiesel from soybean and uses methanol in the chemical process. Results: Avoided Diesel: 1.2 Million liters. Co-benefit: Avoided Emission: 1.3 Mtons of CO2

18. ADVANTAGES OF THE FLEX FUEL CAR  Fuel supply flexibility ( price and availability )  Smaller cost when provisioning with alcohol  Flexibility of provisioning (price and readiness)  Consumption will depend on:  cost difference between gasoline and alcohol  autonomy need Flex-Fuel Technology

19. Share of Flex Fuel sales (ANFAVEA, 2006) Flex-Fuel Technology

20. Brazilian National Biodiesel Program Biodiesel Regulatory Mark for Biodiesel Law 11.097/05 Jan/2005Jan/2008Jan/2013 Obligatory Mixture Authorize d Mixture + Obligatory Mixture Time needed to organize the productive chain regulates the market consolidates the market B2 B2 UP TO B5 B5 Phase 1 Phase2 Phase3 LAW 11.097/ 2005: establishes a minimum percentage of biodiesel mixture to the diesel and the penetration rate of biodiesel in the market 800 million of liters/ year 1 billion of liters/ year 2,4 billion of liters/ year A specific taxation was established structures the market

21. (million hectares) Agriculture..................... 137 Livestock....................... (35) Permanent crops.......... (10) Forest............................. (2) Available Area................90 AGRICULTURAL EXPANSION – PRESENT SITUATION AND POTENTIAL GROWTH Area needed to supply biodiesel (B5)  3 million hectares (NAE, 2005); There are about 90 million hectares available for agricultural expansion regarding different raw materials to produce biofuels, just in the western area. Brazilian National Biodiesel Program

22. CONCLUSIONS It should be noted that the Brazilian initiatives on fuel efficiency and biofuels in the transport sector, meet, without jeopardizing the growing transport activity, their main objectives: Oil dependency reduction; Air quality improvement; Job generation. Thus, as a co-benefit the CO 2 emission reduction is also obtained.

23. CONCLUSIONS KEY MESSAGE In order to make transport policies more efficient in terms of CO 2 emission reduction it is important to promote the quantification of such emissions together with the diffusion of these results.