2020 Competitiveness of Clean and Renewable Energy From Biomass 2009 Brazil Energy Conference

Increasing international concerns on energy security and CO2 emission reduction Ethanol is part of the Brazilian strategic agenda Strong domestic ethanol market growth coupled with international expansion Increasing potential for electricity from biomass in Brazil Sector in evolution Consolidation/new actors Focus on operational excellence Sustainability Potential for innovation and break-through technology Competitiveness: 2 Oil production cost Ethanol production cost Macro trends open great opportunities for energy from biomass

3 Source: LCA, Unica Milling (mm ton) Ethanol mix 45%60%68%75% Sugar Production (mm ton) Billion liters – fuel market CAGR 13% Significant growth of Brazilian Ethanol Market

4 mm m3 - PVC and Polyethylene - Additive in gasoline to increase octane in place of MTBE 18 % a.a Green Plastics ETBE Chemicals  Brazilian ethanol demand (industrial uses)

5 USA E.U. Japan India China Billion liters Brazillian export potential World Demand (Ex Brazil) International Market Expansion Source: LMC e FAO

Rising Production Cost of and Oil and Energy  Projection of Supply and Energy Cost Source: Booz Allen / IEA Oil Prices WTI Corn Ethanol Sugar Cane Ethanol Heavy Oil Pre-Salt OPEP & Conventional Oil Others Sources Cash Cost (US$/boe) MM barrels of oil equivalent per day

Electricity from Biomass 7 GW Source: EPE 0,6% 2,8% % of the biomass energy on the total installed domestic potential.  High potential to increase the presence of electricity from biomass in the Brazilian energy matrix.  Growth of Brazilian economy drives prices to a good ROCE.

Increase of Ethanol Competitiveness  Ethanol at gas station x oil Oil Price WTI Ethanol cost at gas station – adjusted for oil evolution Ethanol cost at gas station – present scenario Ebitda 50% Ebitda 20%

9 Rapid consolidation in the industry 20% % Mills with capacity over 4 mm ton Market Consolidation TOP 10 32% 50% 28% 2009 Center-South Market 70%

Trends  Leaders with capacity over 100 mm ton/year.  Necessary investments ( ) over US$ 45 billion (debt + equity)  New actors: traders and oil companies  Strong interest of capital market Ranking Crop 08/09 Milling Brazil: mm ton Milling Brazil: 565 mm ton Cosan (Nova América) Dreyfus (Santelisa) Tereos Moema Usaçúcar Alto Alegre Carlos Lyra São Martinho Tércio W. Zillo Lorenzetti 52,6 31,5 13,8 12,7 12,3 12,1 12,0 11,8 10,2 34,3 ETH (Crop 2015) Rapid consolidation in the industry

ETH Vision Sustainability Culture & PeopleCompetitiveness Build a leading company in bioenergy (ethanol and co-generation of electricity), focused on value creation for its shareholders through:

12 ETH business model: based on competitiveness and integration Synergies Standardization Integrated Production Clusters SCALE Long-Term Contracts High return on capital Biomass energy production ELECTRICITY New markets and product development Pricing skills Competitive Logistics Customer Focus INTEGRATION I n o v a t i o n & T e c n o l o g y

ETH Energy Sales Ethanol Sales 2,1 million MWh 3,0 billion liters Potential EBITDA Revenues 50% US$ 2,5 billion New Opportunities Opportunities in supply chain Internationalization Integration in the value chain Market Leader

2020 Competitiveness of Clean and Renewable Energy From Biomass 2009 Brazil Energy Conference