- Email: [email protected]
The effect of flex fuel vehicles in the Brazilian light road transportation
ARTICLE IN PRESS
Energy Policy 36 (2008) 1574–1576 www.elsevier.com/locate/enpol
Communication
The effect of flex fuel vehicles in the Brazilian light road transportation Arlindo Kamimura, Ildo L. Sauer1 Programa Interunidades de Po´s-graduac- a˜o em Energia, IEE – Instituto de Eletrote´cnica e Energia/USP, Av. Prof. Luciano Gualberto, 1289, 05508-900 Sa˜o Paulo, SP, Brasil Received 20 December 2007; accepted 8 January 2008
Abstract The retaking of the ethanol program in the year 2003 as a fuel for light road transportation in Brazil through the introduction of flex fuel vehicles fleet was a good strategy to overcome the difficulties of the ethanol production sector and did work to increase its market share relative to gasoline. This process, however, may cause a future disequilibrium on the food production and on the refining oil derivates structure. In order to analyze the substitution process resultant of the competition between two opponents fighting for the same market, in this case the gasoline/ethanol substitution process, a method derived from the biomathematics based on the non-linear differential equations (NLDE) system is utilized. A brief description of the method is presented. Numerical adherence of the method to explain several substitution phenomena that occurred in the past is presented in the previous author’s paper, in which the urban gas pipeline system substitution of bottled LPG in the dwelling sector and the substitution of the urban diesel transportation fleet by compressed natural gas (CNG) buses is presented. The proposed method is particularly suitable for prospective analysis and scenarios assessment. r 2008 Elsevier Ltd. All rights reserved. Keywords: Biomass fuel; Fossil fuel substitution; Market share
The Brazilian experience on the biomass alternative fuel for light road transportation is large, starting in the 1970s with the Proalcohol Programme (Goldemberg, 2006) in which gasoline light vehicles selling was totally displaced by ethanol vehicles for several years. This program took place, basically, via taxes incentives and final consumer prices applied to both cars and ethanol fuel. The Proalcohol starts to fail in the end of the 1980s: the ethanol and gasoline market share in the road transportation sector, respectively, of 19.4% and 18.7% in 1988 changes to 12.2% for ethanol and 26.1% for gasoline in the year of 2003 (BEN, 2007). Such decrease occurs essentially for two reasons: first by the international price of sugar increasing, which displaced the sugarcane raw material from ethanol to sugar fabrication, and second by the centralized energy planning
Corresponding author. Tel.: +55 11 3091 2629; fax: +55 11 3816 7828.
E-mail address: [email protected] (A. Kamimura). Prof. Dr. I.L. Sauer was also Director of Ga´s & Energy (Petrobra´s) from 2003 to 2007. 1
0301-4215/$ - see front matter r 2008 Elsevier Ltd. All rights reserved. doi:10.1016/j.enpol.2008.01.016
government holding off, beginning at the time of the Berlin’s wall fall. However, in the year of 2003, as a reaction of the ethanol use decreasing, the car industry introduced into light vehicles fleet the flex fuel cycle Otto engines propelled simultaneously by both ethanol or gasoline, with similar efficiency per unity energy content, allowing the direct competition between these fuels. So, in the 2003–2007 periods, a spectacular recovery of the ethanol use can be observed due to the gradual and constant increase in the petroleum price, which benefits the ethanol price relative to gasoline (in average R$2.50/l and R$1.30/l, respectively). In fact, the domestic wholesales of flex fuel (cars plus light commercial) was 1,655,779 vehicles (almost 89% of the total) facing only 206,116 gasoline vehicles selling, from January to October 2007 (ANFAVEA, 2007). Another relevant fact was the increasing attention and the consumer consciousness for the environmental problem, especially global warming due to fossil fuels burning. This benefits the biomass fuel use, even where a specific regional ethanol price was not so favorable.
ARTICLE IN PRESS A. Kamimura, I.L. Sauer / Energy Policy 36 (2008) 1574–1576
The Brazilian energy policy and fuel planning is a Ministry of Mining and Energy assignment. However, the effective fossil fuel supply planning is a task done by the state company Petrobra´s, which is the largest exploiter, producer, refiner and distributor oil company in the country. The total ethanol production has been done by the private sector through thousands of ethanol distiller’s owners. As of now (2006) (BEN, 2007) Brazil consumes 12.3 106 m3 and exports 3.46 106 m3 of ethanol. The Petrobra´s prospective scenario (Petrobra´s, 2007) shows the following results for the year 2020: gasoline consumption ¼ 25.1 106 m3; ethanol total production ¼ 46 106 m3 and ethanol exportation ¼ 16.5 106 m3, such that the internal ethanol market consumption will be only 29.5 106 m3. Because of the above-mentioned reasons , the gasoline substitution in light vehicles by ethanol is a matter of time if the present condition continues. In order to analyze problems involving such kind of substitution process, these authors presented a paper (Kamimura et al., 2006) in which the following set of coupled non-linear differential equations (NLDEs) is proposed to describe the general two products competition–substitution process: dN 1 =dt ¼ 1 N 1 a12 N 1 N 2 ,
(1)
dN 2 =dt ¼ 2 N 2 þ a21 N 1 N 2 .
(2)
The time variation growth of N1 (displaced product) is proportional to itself and one subtractive term proportional to N1N2. Similarly, the time variation of N2 (substitute product) is proportional to itself plus one term proportional to N1N2. In this sense, ei represent the N1 and N2 intrinsic or independent exponential growth rate, while aij represent the substitution coefficients of N1 by N2 product. The symmetry of the coefficient aij means that the decreased fraction of N1 variation is added to N2. This coefficient represents mathematically, in this reduced model, the sum of all techno-economic and social efforts—trustfulness, competitive prices, technology, utilization easiness, environmental appeal, marketing and fiscal incentives to replace N1 by N2 product. In this sense, the knowledge or the estimation of the aij value is the most important and sensitive point of the numerical analysis. Some ex-post examples describing the two-competitor process presented in the paper cited before show that this set of NLDE-coupled equations is a good representation of the substitution process dynamical behavior. In the present case, it is possible to determine the ei and aij coefficients by fitting the observed 2003–2006 years data, (e1 ¼ e2 ¼ 0.063 and a12 ¼ a21 ¼ 0.0000126), which gives the result displayed by Fig. 1, if the 2003–2006 contour condition remains unchanged. This NLDE model gives the following results for the year 2020: gasoline consumption ¼ 1.39 106 m3; ethanol
1575
103 tOE 60000 50000
gasoline ethanol gas+ethanol observ.data
40000 30000 20000 10000 0 2003
2008
2013
2018
2023
Fig. 1. Gasoline and ethanol model result for light vehicles—2003/2023 period.
consumption ¼ 81.25 106 m3, which diverges substantially from Petrobra´s scenario (29.5 106 m3). In 2005, the Brazilian production of ethanol and sugar from sugarcane crop in 5.4 106 ha was, respectively, 15.2 106 m3 and 378.5 106 ton, which gives 2.8 m3 ethanol/ha (IEA, 2007). Such productivity can rise to almost 6 m3 ethanol/ha if the entire sugarcane crop would be transformed into ethanol. In order to supply the domestic ethanol demand (NLDE model), approximately 14 106 ha of sugarcane crop is necessary, which represents an increase from the present 10% to almost 26% of the total area now utilized for all agricultural activities. This will represent certainly a big displacement of the agricultural land for food production, if the availability of new land for agricultural purposes does not take place. Food prices and inflation probably will rise. The transportation sector and agriculture sector needs diesel, and the petroleum-refining structure is not flexible enough to transform gasoline into diesel. In fact, in 2006 (BEN, 2007) Brazil imported 3.6 106 m3 of diesel and exported 2.7 106 m3 of gasoline. This situation could become dramatically worse in the year 2020. Conclusion The introduction of the flex fuel in the Brazilian vehicles fleet was a successful way to save and recover the ethanol producer market with a charming environmental appeal. However, government must pay attention for a potentially hazardous socio-economic situation if such fuel market becomes a totally ‘‘liberal’’ economic environment, submitted only to the free market rules. References ANFAVEA (Associac- a˜o Nacional dos Fabricantes de Veı´ culos Automotores), 2007. Online: /http://www.anfavea.com.br/anuario.htmlS. BEN (Brazilian Energy Balance), 2007. MME – Ministry of Mines and Energy, Brası´ lia, DF, Brazil. Goldemberg, J., 2006. The ethanol program in Brazil. Environmental Research Letters 1, 014008, (5pp.).
ARTICLE IN PRESS 1576
A. Kamimura, I.L. Sauer / Energy Policy 36 (2008) 1574–1576
IEA – Instituto de Economia Agrı´ cola, 2007. Online: /http://www.iea.sp. gov.br/OUT/verTexto.php?codTexto=4010S. Kamimura, A., Guerra, S.M.G., Sauer, I.L., 2006. On the substitution of energy sources: prospective of the natural gas market in the
Brazilian urban transportation and dwelling sectors. Energy Policy 34, 3583–3590. Petrobra´s (Petro´leo Brasileiro S.A.), 2007. Plano Estrate´gico Petrobra´s 2020, Premissas Corporativas.
Energy Policy 36 (2008) 1574–1576 www.elsevier.com/locate/enpol
Communication
The effect of flex fuel vehicles in the Brazilian light road transportation Arlindo Kamimura, Ildo L. Sauer1 Programa Interunidades de Po´s-graduac- a˜o em Energia, IEE – Instituto de Eletrote´cnica e Energia/USP, Av. Prof. Luciano Gualberto, 1289, 05508-900 Sa˜o Paulo, SP, Brasil Received 20 December 2007; accepted 8 January 2008
Abstract The retaking of the ethanol program in the year 2003 as a fuel for light road transportation in Brazil through the introduction of flex fuel vehicles fleet was a good strategy to overcome the difficulties of the ethanol production sector and did work to increase its market share relative to gasoline. This process, however, may cause a future disequilibrium on the food production and on the refining oil derivates structure. In order to analyze the substitution process resultant of the competition between two opponents fighting for the same market, in this case the gasoline/ethanol substitution process, a method derived from the biomathematics based on the non-linear differential equations (NLDE) system is utilized. A brief description of the method is presented. Numerical adherence of the method to explain several substitution phenomena that occurred in the past is presented in the previous author’s paper, in which the urban gas pipeline system substitution of bottled LPG in the dwelling sector and the substitution of the urban diesel transportation fleet by compressed natural gas (CNG) buses is presented. The proposed method is particularly suitable for prospective analysis and scenarios assessment. r 2008 Elsevier Ltd. All rights reserved. Keywords: Biomass fuel; Fossil fuel substitution; Market share
The Brazilian experience on the biomass alternative fuel for light road transportation is large, starting in the 1970s with the Proalcohol Programme (Goldemberg, 2006) in which gasoline light vehicles selling was totally displaced by ethanol vehicles for several years. This program took place, basically, via taxes incentives and final consumer prices applied to both cars and ethanol fuel. The Proalcohol starts to fail in the end of the 1980s: the ethanol and gasoline market share in the road transportation sector, respectively, of 19.4% and 18.7% in 1988 changes to 12.2% for ethanol and 26.1% for gasoline in the year of 2003 (BEN, 2007). Such decrease occurs essentially for two reasons: first by the international price of sugar increasing, which displaced the sugarcane raw material from ethanol to sugar fabrication, and second by the centralized energy planning
Corresponding author. Tel.: +55 11 3091 2629; fax: +55 11 3816 7828.
E-mail address: [email protected] (A. Kamimura). Prof. Dr. I.L. Sauer was also Director of Ga´s & Energy (Petrobra´s) from 2003 to 2007. 1
0301-4215/$ - see front matter r 2008 Elsevier Ltd. All rights reserved. doi:10.1016/j.enpol.2008.01.016
government holding off, beginning at the time of the Berlin’s wall fall. However, in the year of 2003, as a reaction of the ethanol use decreasing, the car industry introduced into light vehicles fleet the flex fuel cycle Otto engines propelled simultaneously by both ethanol or gasoline, with similar efficiency per unity energy content, allowing the direct competition between these fuels. So, in the 2003–2007 periods, a spectacular recovery of the ethanol use can be observed due to the gradual and constant increase in the petroleum price, which benefits the ethanol price relative to gasoline (in average R$2.50/l and R$1.30/l, respectively). In fact, the domestic wholesales of flex fuel (cars plus light commercial) was 1,655,779 vehicles (almost 89% of the total) facing only 206,116 gasoline vehicles selling, from January to October 2007 (ANFAVEA, 2007). Another relevant fact was the increasing attention and the consumer consciousness for the environmental problem, especially global warming due to fossil fuels burning. This benefits the biomass fuel use, even where a specific regional ethanol price was not so favorable.
ARTICLE IN PRESS A. Kamimura, I.L. Sauer / Energy Policy 36 (2008) 1574–1576
The Brazilian energy policy and fuel planning is a Ministry of Mining and Energy assignment. However, the effective fossil fuel supply planning is a task done by the state company Petrobra´s, which is the largest exploiter, producer, refiner and distributor oil company in the country. The total ethanol production has been done by the private sector through thousands of ethanol distiller’s owners. As of now (2006) (BEN, 2007) Brazil consumes 12.3 106 m3 and exports 3.46 106 m3 of ethanol. The Petrobra´s prospective scenario (Petrobra´s, 2007) shows the following results for the year 2020: gasoline consumption ¼ 25.1 106 m3; ethanol total production ¼ 46 106 m3 and ethanol exportation ¼ 16.5 106 m3, such that the internal ethanol market consumption will be only 29.5 106 m3. Because of the above-mentioned reasons , the gasoline substitution in light vehicles by ethanol is a matter of time if the present condition continues. In order to analyze problems involving such kind of substitution process, these authors presented a paper (Kamimura et al., 2006) in which the following set of coupled non-linear differential equations (NLDEs) is proposed to describe the general two products competition–substitution process: dN 1 =dt ¼ 1 N 1 a12 N 1 N 2 ,
(1)
dN 2 =dt ¼ 2 N 2 þ a21 N 1 N 2 .
(2)
The time variation growth of N1 (displaced product) is proportional to itself and one subtractive term proportional to N1N2. Similarly, the time variation of N2 (substitute product) is proportional to itself plus one term proportional to N1N2. In this sense, ei represent the N1 and N2 intrinsic or independent exponential growth rate, while aij represent the substitution coefficients of N1 by N2 product. The symmetry of the coefficient aij means that the decreased fraction of N1 variation is added to N2. This coefficient represents mathematically, in this reduced model, the sum of all techno-economic and social efforts—trustfulness, competitive prices, technology, utilization easiness, environmental appeal, marketing and fiscal incentives to replace N1 by N2 product. In this sense, the knowledge or the estimation of the aij value is the most important and sensitive point of the numerical analysis. Some ex-post examples describing the two-competitor process presented in the paper cited before show that this set of NLDE-coupled equations is a good representation of the substitution process dynamical behavior. In the present case, it is possible to determine the ei and aij coefficients by fitting the observed 2003–2006 years data, (e1 ¼ e2 ¼ 0.063 and a12 ¼ a21 ¼ 0.0000126), which gives the result displayed by Fig. 1, if the 2003–2006 contour condition remains unchanged. This NLDE model gives the following results for the year 2020: gasoline consumption ¼ 1.39 106 m3; ethanol
1575
103 tOE 60000 50000
gasoline ethanol gas+ethanol observ.data
40000 30000 20000 10000 0 2003
2008
2013
2018
2023
Fig. 1. Gasoline and ethanol model result for light vehicles—2003/2023 period.
consumption ¼ 81.25 106 m3, which diverges substantially from Petrobra´s scenario (29.5 106 m3). In 2005, the Brazilian production of ethanol and sugar from sugarcane crop in 5.4 106 ha was, respectively, 15.2 106 m3 and 378.5 106 ton, which gives 2.8 m3 ethanol/ha (IEA, 2007). Such productivity can rise to almost 6 m3 ethanol/ha if the entire sugarcane crop would be transformed into ethanol. In order to supply the domestic ethanol demand (NLDE model), approximately 14 106 ha of sugarcane crop is necessary, which represents an increase from the present 10% to almost 26% of the total area now utilized for all agricultural activities. This will represent certainly a big displacement of the agricultural land for food production, if the availability of new land for agricultural purposes does not take place. Food prices and inflation probably will rise. The transportation sector and agriculture sector needs diesel, and the petroleum-refining structure is not flexible enough to transform gasoline into diesel. In fact, in 2006 (BEN, 2007) Brazil imported 3.6 106 m3 of diesel and exported 2.7 106 m3 of gasoline. This situation could become dramatically worse in the year 2020. Conclusion The introduction of the flex fuel in the Brazilian vehicles fleet was a successful way to save and recover the ethanol producer market with a charming environmental appeal. However, government must pay attention for a potentially hazardous socio-economic situation if such fuel market becomes a totally ‘‘liberal’’ economic environment, submitted only to the free market rules. References ANFAVEA (Associac- a˜o Nacional dos Fabricantes de Veı´ culos Automotores), 2007. Online: /http://www.anfavea.com.br/anuario.htmlS. BEN (Brazilian Energy Balance), 2007. MME – Ministry of Mines and Energy, Brası´ lia, DF, Brazil. Goldemberg, J., 2006. The ethanol program in Brazil. Environmental Research Letters 1, 014008, (5pp.).
ARTICLE IN PRESS 1576
A. Kamimura, I.L. Sauer / Energy Policy 36 (2008) 1574–1576
IEA – Instituto de Economia Agrı´ cola, 2007. Online: /http://www.iea.sp. gov.br/OUT/verTexto.php?codTexto=4010S. Kamimura, A., Guerra, S.M.G., Sauer, I.L., 2006. On the substitution of energy sources: prospective of the natural gas market in the
Brazilian urban transportation and dwelling sectors. Energy Policy 34, 3583–3590. Petrobra´s (Petro´leo Brasileiro S.A.), 2007. Plano Estrate´gico Petrobra´s 2020, Premissas Corporativas.