B UILDING B RAZILIAN B IOENERGY P OLICY AT THE A GRO -E NVIRONMENTAL N EXUS : A C ASE S TUDY OF THE G REEN E THANOL P ROJECT Rayane Aguiar Research Associate EBI Biofuels Law and Regulation Project: Systems Sustainability Law & Regulation Conference, April 19, 2013

Presentation Roadmap 1.Why the sustainability conversation in Brazil? Policies that have fostered the bioenergy sector Accompanying sustainability concerns 2.Case study: SP's Green Ethanol Project 3. Concluding Thoughts

Why Focus on São Paulo? 54% of Brazil’s sugarcane = 304 million tons 51% of Brazil’s ethanol = 11.6 billion L SP: around 190 usinas Brazil: more than 440 usinas SP: 5.2 million ha BR: 9.6 million ha Most advanced regulation and policies R & D concentration Source: UNICA and UDOP (2011/2012 harvest season)

The Brazilian Regions and States

Sustainability Conversation Drivers : National Drivers: 1.Pro-álcool 2.Ethanol Blending Mandate: 20-25% 3.Flex Fuel Cars 4.Brazilian Renewable Energy Policies PROINFA – Biomass to electricity Biodiesel: PNBP 5% blending mandate 2.4 billion L

Sustainability Conversation Drivers : International Drivers: 1.The European Renewable Energy Directive 2.California's LCFS Both recognize Brazilian sugarcane ethanol as an important player in achieving U.S. and EU targets in reducing GHG emissions Sustainability concerns  certification

Sustainability Concerns Land conversion for sugarcane expansion Impacts on GHG emissions, biodiversity Water quality and quantity Air emissions (e.g., burning) Soil degradation: erosion and quality Waste management Social concerns Labor conditions and employment Community benefits

International and national standards Brazil-based 1. BONSUCRO: EU-RED qualified Currently certifies over 1 bil. L 26 companies in Brazil 2. SP Green Ethanol Project 159 usinas participating 27 farmer associations The Emergence of Standards

São Paulo's "Etanol Verde" Program

2007: Agreement SMA-SP, SAA-SP, industry and associations Main goals: Address land conversion Protect/restore riparian areas and headwater areas Eliminate sugarcane burning Soil management Water quality and quantity Reducing GHG emissions Ag residues & usina by-product management Less complex/ less expensive/ high rate participation São Paulo's Etanol Verde Program

Certification process: Strategic Plan Details, goals and deadlines Committee: SMA, SAA and UNICA Reviewed annually (renew or cancel) All the information provided can help authorities to better shape future policy strategies (adaptive management) Etanol Verde Program Implementation

Etanol Verde Program Provision 1: Land Conversion Brazilian Environmental Policy Requires permitting of ethanol Agro-environmental zoning: SMA-SP & SAA-SP Soil, climate, water quant/qual, conservation units, ecological corridors, native vegetation Categories: Suitable Suitable with environmental limitations Suitable with environmental conditions Unsuitable(slopey and remains of Atlantic Tropical Forest)

SP Sugar Cane Zoning

Etanol Verde Program Provision 1: Land Conversion According to the Agro-environmental Zoning Plan: 1%: unsuitable areas: no-go areas 45%: suitable w/ environmental limitation 28%: suitable w/ environmental constraints 26%: suitable areas SC expansion on suitable areas has to follow certain conditions: SMA Res. 88/2008

Etanol Verde Program Provision 2: Riparian and Headwaters Areas Protection Brazilian Forest Code leading policy Preserve the environment and protect biodiversity APP: permanent protection areas Riparian area restoration plan: voluntary Restore vegetation of headwaters areas: 50m perimeter  10% per year

Law 11,241/2002 Agro- environmental Protocol Until mil tons CO 2eq emissions 2021 mechanized 2014 mechanized 4.5 million ha mechanized 2031 non- mechanized (slopey) 2017 non- mechanized (slopey) 1.67 million ha burning Etanol Verde Program Provision 3: Burning Prohibitions and Mechanization No burning on areas of SC expansion CETESB role

Municipalities versus protocol deadlines Class Actions: State public prosecutors Requiring immediate stop State Court decisions Federal public prosecutors Analyses of feasibility Requiring EIA/RIMA: CETESB Federal Court decisions

Mechanization Issues Sugar cane yield losses Cost increase: Logistics Technology - small farmers? Job displacement Soil degradation Lack of extension programs for technology transfer Pest control problems Mechanization Issues

Etanol Verde Program Provision 4: Soil Quality and Erosion Soil conservation plan containing: Soil erosion control practices Crop rotation Incorporation of residues (palha) Sugar cane leaves (palha): 15 ton/ha Return sand back to soil after SC harvesting (3% of total harvested material)

Etanol Verde Program Provision 5: Water Quality and Quantity Water Sources Conservation Plan (annual) Usinas have primary responsibility Plan must address quantity and quality Reduce consumption (1m 3 /ton of SC) Reutilization & closed cycle

Etanol Verde Program Provision 6: Industry By-Products Management

Bagasse  electricity Juicing process filter material and boiler ash  fertilizer Vinhaça  Fertirrigation Vinhaça Use control Plan: annual Vinhaça & soil nutrient measurement Protect surface and ground water

Concluding Thoughts Brazilian ethanol industry has shown great improvements in sustainability Due both to market imposition and more stringent regulatory and enforcement systems, particularly for usinas BUT, “sustainability” practices have negatively affected small scale producers and caused land and market concentration Policies and extension programs targeting sugar-cane small scale farmers are lacking Public and private investments in RD are key to developing tools that improve sustainability within the production chain

Thank you! Rayane Aguiar Research Associate, The Energy Biosciences Institute

ZAE-CANA: 64.7 million ha  53% pasture lands Cattle stocking rate = 1.1 head per ha (Censo IBGE, 2006)