BioBraz: Biofuels in Brazil

Is biomethane from agricultural residues an economic alternative to fossil fuels? With the BioBraz project, the Austrian Energy Agency assessed the technical feasibility and long-term economic viability of a concrete business concept.

Agriculture is an important part of the Brazilian economy. About 27% of the nation’s GDP as well as 37% of jobs are depending on this sector. Due to the outstanding importance of animal husbandry large quantities of agricultural residues for the production of biogas and biomethane are available. Within this context, a fair business concept has been developed in order to mobilise these potentials and to produce biomethane (2nd generation biofuel) for the mobility sector in a certain focus region in Brazil. The major objective of the BioBraz project was to proof the techno-economic feasibility of that business concept.

The region under study has been chosen according to its structure and strong agricultural sector. It is located around the Itaipu Binacional water reservoir in Western Paraná. The business concept is based on ownership of local farmers and a fair distribution of risks and revenues. Major objectives of the concept are the regional supply and consumption of energy as well as closed material cycles in agricultural production. In a long-term perspective the concept of using agricultural based biomethane for mobility purposes could be transferred to other regions in Brazil and even to other countries.

© Austrian Energy Agency / Martin Höher
Description: Itaipu, hydroelectric power station

Biomethan produced in fuel quality
The given business concept can be defined as followed: Forming a bioenergy cooperative is the most suitable form of cooperation between farmers and consumers, which is beneficial from a legislative as well as organisational perspective. The concept envisages that decentralized biogas plants shall be installed at the individual farms. The produced biogas is transported via a pipeline to a central biogas upgrading plant, where biomethane in fuel quality is produced (96.5% pure, according to the Brazilian National Oil Agency/ANP). Subsequently, biomethane is distributed to the cooperative members or sold to the market. The produced digestate is processed to a high value biofertilizer and distributed to the cooperative members. Moreover, surplus is sold to agricultural cooperatives in the target region.

© Austrian Energy Agency / Martin Höher
Description: Biomethane filling station on the Itaipu Technology Park (PTI) and methane processing plant

Analysis of the business concept
The feasibility assessment performed by the Austrian Energy Agency included the (theoretical) implementation and operation of the concept within a 10 year period. Primarily three types of farms (small-, middle-, and large-scale) have been assessed, which differ in size and type of animal husbandry. The analysis covered the related economic feasibility of three different scenarios (best-case, worst-case and realistic assumptions). Additionally, the assessment was supported by an intense stakeholder participation processes within the target region. Under current framework conditions, the assessment shows that the given business concept would not economically feasible for all participating stakeholders. The concept requires some optimization in design and diversification of business opportunities. Based on lessons learned, the BioBraz team developed promising scenarios and a manageable implementation roadmap in order to adapt to local framework conditions and enhance the economic viability of biomethane projects. The suggested design supports primarily a step-by-step implementation based on a variety of products and a simultaneous development of the mobility sector.

Adaptation and alternative of the concept
The recommendations include the achievement of economies of scale as well as the potential to decrease investments and OPEX by standardisation of units. Furthermore, the potential application of a dry instead of a wet fermentation process should be considered. Additionally, the capacity should be increased by optimising the supply of manure. In order to bridge the initial phase of a biomethane market in the transport sector, the availability of a wide range of products (electricity, heat, fuel and fertilizer) offers the opportunity of alternative business concepts, which, however, were not assessed so far. For example, the use of biogas for heating and cooling purposes (e.g. chicken and glass houses) as well as the production of process heat could be very promising. In case of cogeneration, credits for electricity can be traded among cooperative members under present law. Further development should consider these additional opportunities and optimize the use of biogas. Considering long-term perspectives, the expected economic, environmental and social advantages of biomethane projects are likely to make rural development more sustainable. However, economies of scale and active stakeholder participation as well as close cooperation between local stakeholders along the value chains will be the key factors for successful implementation processes.

Large savings of greenhouse gas emissions
The assessment of the given concept turned out a greenhouse gas saving potential of 1.127 tons per year by fuel substitution. In addition, the replacements of mineral fertilizers and a controlled manure management can significantly decrease the GHG emissions as well as other environmental impacts of the agricultural sector. A higher positive impact of biomethane projects could be relatively easy achieved by up-scaling and diversification the concept. Furthermore structured manure management and increasing application of biofertilizer could reduce the environmental pollution e.g. eutrophication of water flows within the target region.

Projects on biogas and biomethane are considered to have high social impacts. The local production and consumption of energy affect farmers as well as other economic sectors in the region. Major impacts are cost reduction, the additional income from energy and fertilizer production, new business opportunities, diversification of local economic, improved livelihood and environmental conditions. The assessment shows that the implementation of biomethane utilization concepts in the focus area is likely to affect 50.000 people.

© Austrian Energy Agency / Martin Höher

Training and information to the population
Active stakeholder participation has been an important pillar of the project. Without the cooperation and support of the local, rural population the implementation of a cooperative biomethane-business concept would not have been possible. Therefore, local information events and additional training sessions for local farmers and key stakeholders have been organized in the target region. Finally, a Memorandum of Understanding has been signed by 22 farmers, which proves their high interest in on-going implementation activities.

© Austrian Energy Agency / Martin Höher
Description: Information event for farmers in the Santa Helena region

As coordinator of this study, the Austrian Energy Agency contributed vast experience in leading and coordinating international projects, inter alia in the implementation of development cooperation programs. Extensive experience in the field of biogas/biomethane projects, including the technical and economic pre-feasibility assessment as well as environmental impact assessment in relation to GHG-emissions, eutrophication, energy & material flows, PEI etc. was the basis for developing suitable solutions.

Spirit Design is engaged in biogas project development starting with in-house development of a biomethane driven multifunctional working and transportation vehicle. Two years ago, the Atmove program started off, while focusing at the whole infrastructure needed to develop biomethane mobility, to use the frugal innovation approach of adapting existing technology solutions to the needs of emerging economies. The major contributions of Spirit Design compromise strategic development, concept design, coordination and project communication.

CIBiogás is a science, technology and innovation non-profit institution, with administrative and financial autonomy. CIBiogás comprises 16 member institutions (e.g. Itaipu Bincional, Eletrobras, UNIDO, FAO) that develop and/or support projects related to renewable energies. Its general objective is to provide support to the development of public policies that regulate and promote the use of biogas in Latin America and the Caribbean. Another major field of activities is knowledge generation, capacity building and technology transfer. CIBiogás already established several innovative biogas units in the focus region and is therefore responsible for stakeholder involvement and strategic development.