Greenfields by Dedini Marketing

Expanded version of the paper published in

24 to 27 june, 2013, São Paulo, Brazil

Expansion of the sucro-energy Industry and the new

Greenfield Projects in Brazil from the view of the equipment industry. by José Luís Olivério, Fernando C. Boscariol

www.dedini.com.br

Expansion of the sucro-energy Industry and the new Greenfield Projects in Brazil from the view of the equipment industry by José Luís Olivério, Fernando C. Boscariol

Abstract In 2003, the sucro-energy industry in Brazil resumed its growth cycle, which lasted until 2011. A total of 117 new mills were installed, and today there are 441 mills in operation. Total processed cane rose from 320 million tonnes (2002/2003) to 620 million tonnes (2010/2011). By analyzing such new mills, we can see a significant evolution from the first units to those built more recently. Brazil will face again a “boom” of new mills: forecasts show that sugarcane harvest will rise in 2020 to 1.2 billion tonnes/crop, and 120 additional “greenfield mills” will be built in the country. Considering the developments that have occurred in the 117 new mills, the following questions come to mind: what will the future mills be like, which technologies will be used, what will be the processing capacity, what products will the new mills offer, the traditional sugar, ethanol and bioelectricity, or will there be new ones, what are the lessons learned from the recent expansions. To answer these questions, we analyzed the design profile evolution of the 117 new mills, identified the trends to be considered as references for the new greenfield projects, and what are the development drivers of the new solutions. Conclusion is that the new greenfield mills will be designed according to five drivers of evolution trends for products, capacities and technologies: 1) Increased capacities and productivity of the equipment and the mill; 2) Increased efficiencies and yields; 3) Increased sustainability; 4) Synergy and integration; 5) Higher value-added products from both sugarcane and the mill. Each of these drivers is discussed, and real examples of solutions are presented for each driver and the reasons for the choice. Finally, it is concluded that the equipment industry is able and ready to meet such a huge expansion, in all capability and competitiveness aspects.

Dedini S/A Indústrias de Base

Sumário Em 2003, o setor sucroenergético do Brasil retomou o seu ciclo de crescimento, que se estendeu até 2011. 117 usinas canavieiras foram então instaladas, e hoje há 441 usinas em operação no Brasil. A cana processada se elevou de 320 milhões de toneladas(2002/2003), para 620 milhões(2010/2011). Analisando-se essas 117 usinas recentes, verifica-se que houve sensível evolução entre as primeiras usinas e aquelas mais recentemente implantadas. O Brasil terá novamente um novo “boom” de novas usinas:previsões mostram que a produção de cana irá se elevar para 1,2 bilhões de toneladas por safra, e 120 “greenfields” serão adicionalmente implantados no país. Considerando-se a evolução ocorrida nas 117 novas usinas, cabem as perguntas:-Como serão essas futuras usinas?-Que tecnologias serão utilizadas?-Qual será a capacidade de processamento de cana?-Quais produtos serão oferecidos pelas futuras usinas? Os tradicionais açúcar, etanol e bioeletricidade, ou teremos novos produtos?-Quais são as lições que a cadeia produtiva aprendeu com a recente expansão do setor? Para responder a essas perguntas, este trabalho analisou a evolução das recentes 117 usinas, identificou as tendências a serem consideradas como referências para os novos “greenfields”, e quais são os direcionadores, do desenvolvimento das novas soluções, na visão da indústria de equipamentos. A conclusão é que os novos “greenfields” serão projetados conforme 5 vetores de tendência de evolução quanto a produtos, capacidades e tecnologias: 1) Aumento das capacidades e da produtividade dos equipamentos e das usinas; 2) Aumento das eficiências e rendimentos; 3) Aumento da sustentabilidade; 4) Maior sinergia e integração; 5) Produtos de maior valor agregado da cana de açúcar e da usina. Cada um desses vetores é discutido, e exemplos reais de soluções são apresentadas para cada vetor e os motivos para a sua escolha. Finalmente, conclui-se que a industria de equipamentos está capacitada para atender essa forte expansão, em todos os aspectos da capacitação e competitividade.

Page 1 of 24

Expansion of the sucro-energy Industry and the new Greenfield Projects in Brazil from the view of the equipment industry

Introduction The Brazilian sugarcane industry has grown hugely in the past 40 years, as shown in Figure 1. Starting in 1975/76 with the launch of ProAlcohol*, there has been an impressive growth in sugarcane production, from 68 million tonnes of cane per crop (TCC) to 223 million TCC in 1985/86, a st milestone that we call the “1 great leap”. The reason is the increased ethanol demand, which jumped from 550 million litres (1975/76) to nearly 12 billion litres (1985/86), whereas sugar production remained at 6 to 9 million tonnes. And Brazil became, at the time, the biggest ethanol producer in the world (all data from Datagro, 2012). From 1985/86 to 1993/94, annual sugarcane production remained around 220 million tonnes, sometimes producing more ethanol, sometimes more sugar, with inexpressive variations (ethanol: 11 to 12 billion litres; sugar: 8 to 9 million tonnes). In 1993/94, another major expansion of the industry took place, which continued until 2002/03, and cane production soared from 220 million to 320 million nd tonnes/crop – the “2 great leap”. Here, growth was due to the increased sugar production, when the country moved to the export market and became the biggest sugarcane and cane sugar producer. In this period, sugar production rose from 9 million to nearly 23 million yearly tonnes, and ethanol remained in the range of 12 to 15 billion litres. Today, the situation is quite different from the

* ProAlcohol – Programa Nacional do Álcool - Brazilian Ethanol Program, a program started in 1975 with the purpose to introduce ethanol into the Brazilian Energy Matrix, in which ethanol was blended with gasoline, or replaced gasoline (100%) as a fuel in vehicles.

previous two: both sugar and ethanol production has grown considerably, with sugarcane harvest rising from 320 (2002/03) to 620 million tonnes (2010/11). Brazil is rd now at the “3 great leap”, with both sugar and ethanol contributing to this growth: ethanol production going from 12 billion litres (2002/03) to 27 billion litres/crop (2010/11), and sugar from 23 million tonnes (2002/03) to 38 million tonnes/crop (2010/11). The following 2011/12 crop has shown a decline in production mainly due to climatic reasons, but demand should continue to rise in the next years. As a result, today we have 441 mills in operation in Brazil, of which 324 were built before 2003, and 117 afterwards (CNI, 2012). Such set of mills is the reference that we will use in this paper: 324 of them we call “old mills”, and 117 we call “new mills”. rd

The conditions that led to the “3 great leap” that means increased demand on ethanol for domestic market and on sugar to export - remain until now and should stay for the next 8-10 years, which allows us to assume that the sucro-energy industry will continue to have a major expansion because of three independent, yet concurring, factors today: ethanol – domestic market: a rise in ethanol demand because of the commercial success of the flexfuel vehicles and the increase of the Brazilian fleet, predominantly running with flex-fuel engines, and ethanol has been the preferred fuel; ethanol – exports: an increase in ethanol demand as a result of the global interest on this fuel due to its environmental qualities: ethanol is made from biomass, a renewable feedstock, and has a high mitigating effect on the greenhouse gases, as gasoline is replaced in the fuels utilization; sugar – exports: exports should also grow due to the country’s competitiveness, the growing global market, and the global trend to reduce agricultural

BRAZIL – HISTORICAL DATA – SUGARCANE, SUGAR AND ETHANOL PRODUCTION 3rd Great Leap

350 00

500 000

300 00 1st Great Leap

250 00

400 000

2nd Great Leap

300 000

200 00 150 00

200 000

100 00 100 000 500 0 0

SOURCE: DATAGRO

Etanol (1000 m3) Ethanol

Açúcar Sugar(1000 T)

t) Sugarcane 1000 ton Production(1000 cane production Sucar

600 000

400 00

75/76 76/77 77/78 78/79 79/80 80/81 81/82 82/83 83/84 84/85 85/86 86/87 87/88 88/89 89/90 90/91 91/92 92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12

m3) production t) and ethanol (1000(m Sugar (mm3) Ethanol and(1000 m ton) Sucar

450 00

Cana Cane(1000 T)

Fig 1 - Brazilian production of sugarcane, sugar and ethanol. The text in the box informs the reason why it was necessary to increase sugarcane production Dedini S/A Indústrias de Base

Page 2 of 24

Expansion of the sucro-energy Industry and the new Greenfield Projects in Brazil from the view of the equipment industry subsidies to protect sugar production in many countries.

To answer these questions, we examined the development design concepts already incorporated to the 117 “new mills”, the advances already accomplished, and which ones will be incorporated to the future solutions, and then define the drivers of evolution of the “future greenfield mills”.

Forecasts for sugarcane growth in Brazil, as developed by several official bodies and representative entities of the sector are coinciding: all of them assume that the industry will double cane production in the next years, reaching 1.2 billion tonnes in 2020/21, a considerable increase over the 2010/11 crop, (UNICA, 2012).

The conclusion, as you will see, is that the new greenfield plants will be designed according to five drivers of evolution trends for the products, capacities and technologies that will be used. This is the subject of the present study.

ethanol – domestic market + exports: from 27 to 70 billion litres, of which 80% are for the domestic market; sugar – domestic market + exports: from 38 to 51 million tonnes, of which 73% are for exports;

Design development: from “sugar mill” to the “sucro-energy plant”

To meet such demand, in addition to the existing mills, UNICA foresees that 120 large-size “future mills” (“greenfield mills”) will be built in the country by 2020. Considering the technological progress that have been incorporated to the 117 “new mills” in relation to the 324 “old mills”, and the construction of 120 “future mills”, the following questions arise:

The typical mill The Brazilian sugar and biofuels industry has grown innovatively since the launch of “ProAlcohol” in 1975. Until then, the “sugar mills” in Brazil were conventional and even technologically obsolete when compared to other countries.

What will the “future mills” be like? Which technologies will be used? Which will the processing capacities be?

At the end of this chapter, in Table 3, we present some performance indicators that illustrate the technological stage then existing. Figure 2 is selfexplanatory and illustrates the typical sugar mill at the time.

What products will the ”future mills” offer: the traditional sugar, ethanol and bioelectricity, or will there be new ones? What are the lessons learned from the recent expansions, and will they be used in the design and construction of the “future mills”?

In early ProAlcohol, “Ethanol Process” plants were incorporated and integrated to the “sugar and alcohol mill”. It was not an innovation, but a novelty in

PRODUCTION FLOWCHART – SUGAR AND SURPLUS BAGASSE

CANE

RECEPTION/ CLEANING/ PREPARATION

EXTRACTION

JUICE

SUGAR PROCESS

SUGAR

MOLASSES

B A G A S S E STEAM GENERATION (BOILER)

SURPLUS BAGASSE

PRODUCT FLOW HIGH ORESSURE STEAM FLOW (DRIVING PURPOSE) LOW PRESSURE STEAM FLOW (THERMAL PURPOSE)

ELECTRICITY GENERATION (TURBOGENERATOR)

Fig. 2 – Traditional technology and production process: sugar and surplus bagasse. Dedini S/A Indústrias de Base

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Expansion of the sucro-energy Industry and the new Greenfield Projects in Brazil from the view of the equipment industry Brazil, since ethanol was previously produced on a small scale and from molasses only, and then the mills began to use molasses and/or juice (Figure 3).

solution adopted by the “old mills” until the early 2000s. At that time, updated technologies were used for sugar production, thus renovating the industry, which was then in obsolete conditions. rd

PRODUCTION FLOWCHART – SUGAR, BIOETHANOL AND SURPLUS BAGASSE

RECEPTION/ CLEANING/ PREPARATION

CANE

JUICE

EXTRACTION

B A G A S S E STEAM GENERATION (BOILER)

J U I C E

SUGAR PROCESS

SUGAR

MOLASSES

BIOETHANOL BIOETHANOL PROCESS STILLAGE

SURPLUS BAGASSE SURPLUS BAGASSE

PRODUCT FLOW HIGH ORESSURE STEAM FLOW (DRIVING PURPOSE)

ELECTRICITY GENERATION

LOW PRESSURE STEAM FLOW (THERMAL PURPOSE)

(TURBOGENERATOR)

Fig. 3 – Traditional technology and production process for sugar, bioethanol and surplus bagasse.

This solution was not sufficient to meet the st enormous growth in ethanol demand (the 1 great leap, as described in the previous section). A really innovative approach was then implemented: a plant to produce exclusively ethanol, resulting in a wide reformulation of process, basic, and detailing engineering, new equipment and process solutions, new mass and energy balances, a full re-dimensioning of the mill (Figure 4).

From 2002/03, with the “3 great leap”, “new mills” have been built to meet the rising demands for sugar and ethanol. At that time, the world, and particularly Brazil, were already in tune with the efforts for renewable sources of energy, and there was full awareness of the whole sugarcane energy potential, i.e., not just transforming cane juice into products (sugar, ethanol), but also the cane bagasse and, more recently, cane straw (crop residues which we named “straw”) into new products. Realizing that sugarcane had a major role in the agri-energy sector, the country decided to create institutional mechanisms to transform the bioelectricity generated by bagasse (and straw) into a new product, a new business. The existing technologies were already properly developed, so the “new mills” could immediately use the configurations shown in Figure 5 and Figure 6; in Figure 5 the “sugar, ethanol and bioelectricity mill”, or, as a result of the faster-growing ethanol demand, in Figure 6, the “ethanol and bioelectricity mill”, this last one the predominant solution for the “new mills”. Also in this case, innovative solutions were developed, involving new processes, balances, equipment, etc.

PRODUCTION FLOWCHART – SUGAR, BIOETHANOL AND SURPLUS BIOELECTRICITY

PRODUCTION FLOWCHART – BIOETHANOL AND SURPLUS BAGASSE

CANE

RECEPTION/ CLEANING/ PREPARATION

JUICE

EXTRACTION

J U I C E

EXTRACTION

B A G A S S E STEAM GENERATION (BOILER)

J U I C E

B A G A S S E

BIOETHANOL

BIOETHANOL PROCESS STILLAGE

SUGAR PROCESS

SUGAR

MOLASSES

BIOETHANOL BIOETHANOL PROCESS

STILLAGE

STEAM GENERATION (BOILER)

SURPLUS BAGASSE SURPLUS BAGASSE SURPLUS BAGASSE PRODUCT FLOW HIGH PRESSURE STEAM FLOW (DRIVING PURPOSE)

PRODUCT FLOW HIGH ORESSURE STEAM FLOW (DRIVING PURPOSE) LOW PRESSURE STEAM FLOW (THERMAL PURPOSE)

ELECTRICITY GENERATION

LOW PRESSURE STEAM FLOW (THERMAL PURPOSE)

(TURBOGENERATOR)

Fig. 4 – Traditional technology and production process for bioethanol and surplus bagasse. Over time, due to the stabilized ethanol nd demand and a sharp rise in sugar exports (the 2 great leap), such ethanol plants evolved to incorporate and integrate a “sugar process” plant, which was the typical

Dedini S/A Indústrias de Base

ELECTRICITY GENERATION (TURBOGENERATION)

BIOELECTRICITY

Fig. 5 – Traditional technology and production process * for biosugar, bioethanol and surplus bioelectricity .

To emphasize the “organic or biological origin” of the products derived from sugar cane, in this paper those products are named: bioethanol, bioelectricity and biosugar.

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Expansion of the sucro-energy Industry and the new Greenfield Projects in Brazil from the view of the equipment industry PRODUCTION FLOWCHART – BIOETHANOL AND SURPLUS BIOELECTRICITY

CANE

RECEPTION/ CLEANING/ PREPARATION

Brazilian New Mills (after 2003) Profile – classified by products

EXTRACTION

B A G A S S E

STEAM GENERATION

J U I C E

BIOETHANOL

100%

designed

BIOETHANOL PROCESS

75%

80%

STILLAGE

(BOILER)

25%

HIGH PRESSURE STEAM FLOW (DRIVING PURPOSE)

35% operational

ELECTRICITY GENERATION

PRODUCT FLOW

BIOELECTRICITY

(TURBOGENERATION)

LOW PRESSURE STEAM FLOW (THERMAL PURPOSE)

Total (117)

Sugar+ Ethanol

Ethanol

Bioelectricity

SOURCE: TOTAL= CNI 2012, PROFILE = DEDINI

Fig. 6 - Traditional technology and production process for bioethanol and surplus bioelectricity.

Fig. 9 – “New mills” profile classified by products. Source: CNI 2012/Dedini

Profile of the Brazilian sugarcane mills

When we examine the graphs, we can see that there has been a significant change in the profile of the “new mills”, now more focused on ethanol and already designed to produce bioelectricity, even though partially implemented.

Before the “3 great leap”, 324 “old mills” were in operation in Brazil. Over the past 10 years, 117 “new mills” were built, as shown in Figure 7.

In “total mills”, sugar & ethanol flexible mills predominate (60%), whereas in “new mills” ethanol plants are in a larger number (75%);

Number of new mills

Sugar mills are not significant (5% in “total mills”, and with no record in “new mills”);

35 30

Regarding bioelectricity, in “total mills” is not significant (15%), but it is now largely considered in the “new mills” (80% designed, but 35% implemented and in operation).

20 15 10

Fig. 7 – Number of new sugarcane mills installed in Brazil by crop. Source: (CNI, 2012)

It is worth noting that the length of the milling season has also extended significantly in the country: from 180 overall days with 144 effective days in the end of 80´s, to 230 overall days with 200 effective days currently.

Let’s examine the profile of these total (old and new) plants. Figure 8 illustrates the “total mills”, ranked by products (CNI, 2012), and Figure 9 ranks the “new mills”.

Figures 10 and 11 present other important information about the Brazilian mills. Center-South is the region in the country with the largest number of total mills, i.e., 354 units.

0 2005/06

2006/07

2007/08

2008/09

2009/10

2010/11

2011/12

SOURCE: CNI 2012

Center-South Typical Data

Brazilian Total Sugarcane Mills Profile - classified by products

100 - best practices

100%

100

100%

90 75%

(range)

8 mi

60%

Brazil

50%

35% 25%

15% 5%

0,3 mi Total (441)

Sugar+ Ethanol

Ethanol

Sugar

SOURCE: CNI 2012

Bioelectricity

Productivity TC/ha Source: Dedini

Fig. 8 – “Total Mills” – classified by products. Source: (CNI, 2012)

Dedini S/A Indústrias de Base

Productivity LETC

Mill Capacity TCC

TC: Tonnes of cane TCC: Tonnes of cane per crop LETC: Litres of ethanol per tonne of cane

Fig. 10 – Typical productivity and capacities (Source: Dedini)

Page 5 of 24

Expansion of the sucro-energy Industry and the new Greenfield Projects in Brazil from the view of the equipment industry New Mills Capacity - mi TCC / mi LEC 30.000 TCD

6/510 20.000 TCD

4/340

2,4/200 3/255 12.000 TCD

15.000 TCD

20.000 TCD

The First

Recent

Future

30 MW

37/50 MW

50/75 MW

Source: Dedini

TCC: Tonnes of cane per crop

TCD: Tonnes of cane per day

mi: millions

MW: Surplus power export capacity

LEC: Litres of ethanol per crop

Fig 11 – “New mills” capacity evolution (Source: Dedini)

It is worth noting that due to some factors (the 2008 global financial crisis, the consolidation of the industry into large groups through mergers and acquisitions, the lack of investments in the renovation of sugarcane crops, and insufficient productivityoriented agricultural management, followed by two years of adverse climatic conditions), the growth cycle has been interrupted in the past years. The last decision for a “new mill” was made in 2007, and those units were implemented until 2011. The projects under consideration and supposed to be approved after 2008 are for even larger capacities: such future mills would have a capacity of 20,000 to 30,000 TCD (4 to 6 million of TCC), and bioelectricity (Figure 11).

The productivity data (Figure 10) are selfexplanatory. With respect to capacity, there is a great variation between the total existing plants, ranging from 300,000 TCC to 8 million TCC. The “new mills” first had a typical capacity of 12,000 tonnes of cane per day (TCD) (2.4 million TCC), but more recently such capacity has been as high as 15,000 to 20,000 TCD (3 to 4 million TCC); and the trend is to increase even more the sugarcane processing capacity to 20,000 to 30,000 TCD (4 to 6 million TCC), as shown in Figure 11. Nearly all plants were designed or considered to produce bioelectricity.

Technological evolution of the industrial area The fast growth of the industry, which has led to numerous investments in renovation, expansion, and new mills, resulted in an important technological development of equipment, processes, plants, and complete mills. Considering the current main products of the Brazilian mills, we will limit our discussion to three development routes: for sugar, ethanol and

Table 1 – Technologies for maximum biosugar and bioethanol production. TECHNOLOGIES FOR MAXIMUM BIOSUGAR AND BIOETHANOL PRODUCTION

Dry cleaning replacing cane wash

High performance MCD Dedini milling tandem or Dedini-Bosch Modular Diffuser

To eliminate sugar entrainment and degradation in evaporators

Ecoferm – Dedini-Fermentec Fermentation System with higher ethanol content and with Ecochill (absorption chiller)

Destiltech – Distillation system with minimum ethanol losses in stillage

DRD – Dedini Refinado Direto (Dedini Direct Refined)

DAP – Dedini Automação de Processos – Automation using intelligent software up to MES Level – Manufacturing Execution System

Process sweet sorghum at the sugarcane mill Technological Partner Patent Application

Dedini S/A Indústrias de Base

Dedini Patent Application

Page 6 of 24

Expansion of the sucro-energy Industry and the new Greenfield Projects in Brazil from the view of the equipment industry bioelectricity production. Sugar and ethanol – there have been significant improvements in yields and efficiencies, maximising the extraction of cane sugars, minimising process losses and optimising the transformation of juice into sugar and ethanol. There have been many improvements in the existing processes, and numerous innovations have been introduced, which together have enabled optimum sugar and ethanol production per tonne of cane. Table 1 lists the technologies that the equipment manufacturers in Brazil, in special Dedini, uses when a new mill project aims at the optimal sugar and ethanol production. Some of these technologies will be discussed later in this paper; for an overview, see Olivério et al., 2010a. Bioelectricity – similarly, the industry has experienced considerable improvements in energy efficiency, aiming at the maximum production of bioelectricity per tonne of cane. Maximum bioelectricity production is attained by two kinds of technologies designed to: Minimum consumption of electrical and steam energy by the mill, i.e., minimum use of energy (electric

power, steam) for cane processing and in the sugar and ethanol production processes. As a result, we have maximum surplus of bagasse and/or straw, i,e,, maximum surplus biomass; and Maximum use of the energy available in the sugarcane and in the mil, i.e., use of the energy from bagasse and/or straw, and biogas from vinasse with maximum energy efficiency. Table 2 lists the technologies, which, together, enable maximum production of surplus bioelectricity; for an overview of these technologies, see Olivério et al, 2010a. With the new techno logies implemented by the Brazilian mills since the beginning of ProAlcohol (1975), there has been a significant increase of productivity gains and efficiencies in sugar, ethanol and bioelectricity production, as can be seen in Table 3 (CNI 2012). As a reference, and to correlate the current equipment performances with typical state-of-the-art solutions, we included in Table 3 the products and technologies already presented in Tables 1 and 2 and which are commercially available from the Dedini Company as part of their products line.

Table 2 – Technologies for maximum surplus bioelectricity production TECHNOLOGIES FOR MAXIMUM SURPLUS BIOELECTRICITY PRODUCTION 1. 2.

3. 4. 5. 6. 7. 8.

9. 10. 11. 12. 13. 14.

15. 16. 17.

Electric Drive to Knives/Shredder Electric-Hydraulic Drive / Electro-Mechanical Drive via planetary gearbox to milling units or Dedini-Bosch Modular Diffuser Multi-effect Falling Film Evaporation System Regenerative Heat Exchangers Ecoferm – Dedini-Fermentec Fermentation System with higher ```` ethanol content and with Ecochill (absorption chiller) Dedini-Siemens Split Feed Distillation Dedini-Vaperma Membrane Dehydration System Dedini-Bosch Continuous Vacuum Pan DRD – Dedini Refinado Direto (Dedini Direct Refined) DCV – Dedini Stillage Concentration System Maximum surplus bagasse utilization as boiler fuel (except re-start) System and equipment for straw utilization as boiler fuel M ethax – Stillage Anaerobic Biodigestion System producing biogas/biomethane Dedini AT Single Drum Multifuel Boilers – high: pressure/ temperature/ energy efficiency Condensation turbine with multi-stage extraction control Process sweet sorghum at sugarcane mill DAP – Dedini Automação de Processos – Automation using intelligent software up to MES Level – Manufacturing Execution System

Maximum available energy utilization Technological Partner Patent Application

Dedini S/A Indústrias de Base

Minimum energy consumption Dedini Patent Application

Page 7 of 24

Expansion of the sucro-energy Industry and the new Greenfield Projects in Brazil from the view of the equipment industry Table 3 – Evolution of the technological capabilities as a function of the equipment and technology available.

RESULTS OF INDUSTRIAL TECHNOLOGICAL EVOLUTION IN THE SUCROENERGY SECTOR – 2011 Today DEDINI Beginning State of PRODUCTS PROALCOHOL the Art

1. Production/equipment capacities increase Crushing Capacity (TCD) - 6x78”

Vert. Shredder/ Milling Tandem

5 500

15 000

Fermentation Time (h)

Batch/Cont. Ferm.

6-8

Beer Ethanol Content (°GL)

Ecoferm

6.5

Up to 16

Extraction Yield (%Sugar) - 6 Mill Units

Milling Tandem/ Modular Diffuser

97/ 98

Fermentation Yield (%)

Ecoferm

Distillation Yield (%)

Destiltech

99.5

DEDINI Technology

600

320

Split Feed+ Membrane/Mol. Sieve

4.5

2.0

60 / 21 / 300

400 / 120/ 540

Methax

0.1

Total Yield (Litre Hydr. Bioeth./t cane)

DEDINI Technology

Surplus Bagasse (%) - Bioethanol Mill

DEDINI Technology

Up to 8

Up to 78

DEDINI Technology

50.7

DEDINI Technology

84/112

Ecoferm/ DCV

5.0/ 0.8

Water Mill

187

(-) 3.7

2. Efficiency/yields increase

3. Optimising energy consumption/efficiency Total Steam Consumption (kg Steam/t cane) Steam Consumption Anhydrous. (kg steam /Litre) Boiler – Efficiency (% LHV) Capac.(t/h) /Press.(Bar) / Temper.(ºC)

AZ/ AT/ Single Drum

Biomethane from Stillage (Nm /litre of Bioethanol)

4. Global parameters

Surplus Bioelectricity to the Grid, Bioethanol Mill, 12 000 TCD (fuel: bagasse) (MW) Surplus bioelectricity to the grid – Bioethanol mill, 12 000 TCD (bagasse + 50%/100% straw) – (MW) Stillage Production (litre stillage/litre Bioeth.) Intake Water Consumption (litre Water/litre Bioeth.)

TCD = tones of processed cane per day; LHV = based on bagasse Low Heat Value; Capac. = Boiler Steam Production; Press. = Pressure; Temp. = Temperature; Bioeth.= Bioethanol; Cont. Ferm.= Continuous Fermentation system; Vert. = Vertical; Ecoferm = Ethanol fermentation system up to 16ºGL; Destiltech = Ethanol distillation Plant with flegma recirculation;

Dedini S/A Indústrias de Base

Mol. Sieve = Dehydration by Molecular Sieve System; AZ/AT/Single Drum = Boilers models and types; Methax = Stillage Biodigestion Plant producing biogas and/or biomethane; DCV = Evaporative Stillage Concentration Plant Hydr: Hydrated

Page 8 of 24

Expansion of the sucro-energy Industry and the new Greenfield Projects in Brazil from the view of the equipment industry Table 3 is self-explanatory, but we highlight the development in processing capacity: six 78” milling units processed 5500 TCD in 1975; in 1985 the processing capacity was 10,000 TCD (Giannetti, 1985); in 2002 it reached 13,000 TCD (Olivério, 2002); in 2006, 14,000 TCD (Olivério, 2006); and from 2010 to now the milling tandem can process 15,000 TCD (Olivério et al., 2010a, CNI 2012). We consider this evolution in various steps very interesting, and appropriate to illustrate how continuous improvements, with small incremental increases, can reach a very significant final result. And, in parallel, extraction process yields increased from 93% (1975) to 97% (2011).

The profile of the Brazilian “new mills” As already shown in this study, 117 “new mills” were built in Brazil in the past ten years. A common characteristic of the recent and current Brazilian mills market is that each solution is individually defined; so, as a whole, you will find unique solutions in each of the mills. From the project design to equipment and installation definitions, the mill is customized to suit the goals and interests of the investors and/or their consultants, engineering companies and equipment manufacturers. This was not always so: in early ProAlcohol, the manufacturers used to offer standard ethanol plants, and also complete turnkey mills. Thus, we have today almost 117 different solutions in the 117 “new mills” installed. Therefore, to

determine the profile of the new recent mills, a long and detailed survey and an evaluation of the different solutions adopted would be necessary, which is not the purpose of the present study. Our interest is to define a profile that can be used as a reference for the development trends of the future “greenfields” to be built in Brazil. According to the characteristics and solutions adopted, we will use for this purpose the most recent “new mill” in Brazil – the Água Emendada Mill in Goiás, of the ETH/Brenco Group, which started operations in November/2011. This mill was part of a package of four new mills implemented by ETH/Brenco, with similar, not identical, solutions, and Dedini supplied all process mechanical equipment and half of the bagasse boilers, as well as the so-called “process islands”, i.e., “sugarcane reception and processing”, “fermentation”, “distillation”, and “boiler”. These are the new mills: Morro Vermelho, GO, (started operations in 2010), Alto Taquari, MT (2010), Costa Rica, MS (2011) and Água Emendada, GO (2011). All of them produce ethanol and bioelectricity, with a capacity of 18,000 TCD, 3.6 million of TCC. Figure 12 gives an overall view of the Água Emendada Mill, with indication of its main sectors. Figures 13, 14 and 15 show in details the sugarcane processing sectors, bioelectricity production, bioethanol production, and the tanking area.

Fig. 12 – Typical profile of the recent Brazilian new greenfield mills – overall view – Odebrecht (ETH/Brenco) Água Emendada Mill.

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Expansion of the sucro-energy Industry and the new Greenfield Projects in Brazil from the view of the equipment industry

Fig. 13 – Typical profile of the recent Brazilian new greenfield mills – view of sugarcane processing and bioelectricity production – Odebrecht (ETH/Brenco) Água Emendada Mill.

Fig. 16 – Typical profile of the recent Brazilian new greenfield mills – biosugar + bioethanol + bioelectricity mill – overall view

Drivers of development trends of products, capacities, and technologies Advancements in the mills and in overall performances have been impressive from early ProAlcohol to now. Part of such evolution followed some trends that can be easily identified when we examine the progress of such performance in a sequence. Earlier studies (Olivério 2002, Olivério 2006, CNI 2012) identified models of the technological development that the industry has experienced, namely:

Fig. 14 – Typical profile of the recent Brazilian new greenfield mills – view of bioethanol production – Odebrecht (ETH/Brenco) Água Emendada Mill.

Fig. 15 – Typical profile of the recent Brazilian new greenfield mills – view of the ethanol tanking area – Odebrecht (ETH/Brenco) Água Emendada Mill. The ETH/Brenco mills do not produce sugar, but schematically, as a way of illustration, Figure 16 shows what would be a sugar, ethanol, and bioelectricity-producing mill.

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▪

Equipment and plant capacity and productivity increases;

▪

Efficiency and yield increases;

▪

Better use of sugarcane energy;

▪

Diversification of products and by-products from sugarcane increase;

▪

The mill defined as an energy-and-foodsproducing unit.

By analysing the stages of this model, having as reference the existing mills, particularly the “new mills”, we can see that some stages can still be considered as drivers that will direct the development trends of the “future mills” – the greenfields. Others remain with some adjustments, while some have been changed into more specific drivers, losing the generic characteristic that they used to have. But new drivers have also emerged, as a result of new concepts, requirements, and even the development of the earlier stages. Thus, we believe that the considerable expansion of the Brazilian sucroenergy industry, from 600 million TCC to 1.2 TCC, and expected to have 120 additional greenfields, will be attained by using the five drivers that will govern the evolution trends of products, capacities, and technologies:

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Expansion of the sucro-energy Industry and the new Greenfield Projects in Brazil from the view of the equipment industry 1.

Equipment and plant productivity increases;

capacity

and

Efficiency and yield increases;

Sustainability increase;

Synergy and integration;

Higher value-added products from sugarcane and the sugarcane mill.

Following we will discuss each of these drivers, in some cases presenting possible technological improvements to be developed, but mainly the real solutions already existing, in operation or available waiting for a pioneer commercial use. These examples aim to support the central thesis of this study, i.e., that the new “greenfields” may continue to be customized, but that the “future mill” should consider in its basic project the developments already resulting from these five drivers.

Driver 1: Equipment and plant capacity and productivity increases This driver defines that the trend is of larger and more productive equipment and mills. A good example is the increased capacity of the six 78” milling units, as already seen, which jumped from 5,500 to 10,000 TCD, then 13,000 TCD, and today 15,000 TCD, mainly because of higher productivity rates. This occurred first from adjustments in equipment engineering to meet a national super crushing demand, as a result of pressure put on the mills to crush more and more cane to produce larger ethanol volumes (due to ProAlcohol), along with the lack of financial resources to expand the mills. As a consequence, the existing equipment were used to the their limits and improved with the use of materials, accessories, new components, and design modifications that have been introduced to attain higher performances. Then, when such possibilities were exhausted, in a second stage there were changes in geometry, in dimensioning, and use of more advanced devices, resulting in a new rise in productivity for this same set of 78” crushers. Further productivity increases for this same crusher are increasingly difficult to obtain, but the need for increased capacities remains, i.e., this driver will continue to influence the design of the future mills, which will have as limitations to daily crushing capacities the technical and economic feasibility of the maximum amount of cane that could be supplied to the plant. It is known that cane supply from long distances may be unviable. But, in Brazil, the future mills will be

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built mainly at the new agricultural frontiers, where there are more contiguous lands available for cane crops. Thus, large areas in hectares of cultivation will have short average distances for the transportation of sugarcane to the plant during harvest, which will make viable the increase of the yearly/daily crushing volume. Thus, the new projects requirements will be for even larger cane processing capacities, and the best economic solution is a single processing line, i.e., a single crushing tandem or a single high-capacity diffusion plant. Regarding crushers, productivities are close to their limits; an increase in cane processing will be achieved mainly by means of capacity increases, using larger equipment, i.e., 90”, 100”, 110”, and 120” crushers. In the case of diffusers, the traditional chain diffusers have design and mechanical complexities that are not easy to be overcome in so large capacities. Thus, we believe that increased capacities will be attained by chainless modular diffusers, which are expansible in their own conception (Olivério, 2011). Another possibility is the evolution of the diffusion systems by the incorporation of new technologies, reducing the time of cane in the equipment (e.g., use of vacuum for the intake of imbibition juice). Some equipment and solutions already found in “new mills” (see Figures 17 to 23) support our belief that this driver will be very important for designing “future greenfields”. Figure 17 shows the world’s biggest capacity diffuser 21 000 TCD, and Figure 18 the same for the milling tandem, 31 200 TCD. Figure 19 is an example of the same trend expressed by driver 1 in steam generation, two boilers with capacity of 320 tonnes of steam per hour each. Figure 20 demonstrates the capacity increase driver impact on juice treatment and concentration stages: the world’s biggest short retention time clarifier, and a high capacity five effect falling film evaporators. Also, driver 1 impact is shown on ethanol process: Figure 21 presents a fermentation plant using the world’s biggest feed-batch fermentation vessel utilising yeast recycle process: 2000 m³; Figure 22 presents big capacities on distillation plants to produce: hydrated ethanol, (total of 2 700 000 litres/day, composed of three installations of 900 000 litres/day each), and anhydrous ethanol (molecular sieve plant of 1 000 000 litres/day capacity). The correspondent impact of driver 1 on sugar process is presented in Figure 23.

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Expansion of the sucro-energy Industry and the new Greenfield Projects in Brazil from the view of the equipment industry

Fig. 17 – Trend: increased diffusers capacity/productivity – Raízen Jataí Mill –high capacity chainless modular diffuser

Fig. 20 – Trend: increased juice treatment/concentration equipment and systems capacity/productivity – high capacity solutions: Raízen Jataí clarifier/ Bunge Santa Juliana Mill evaporators

Fig. 18 – Trend: increased milling units/milling tandem capacity – US Sugar Mill –high capacity milling unit/tandem

Fig. 21 – Trend: Larger fermentation vessels and increased plants capacity/productivity – Odebrecht (ETH) Agua Emendada Mill – high capacity Fermentation Plant

Fig. 19 – Trend: increased boilers capacity/productivity – Raízen Barra Mill –high capacity bagasse boiler

Fig. 22 – Trend: increased distillation and dehydration capacity/productivity – high capacity plant: Santa Luzia Mill distillation plant/ Rio Brilhante Mill dehydration plant.

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Expansion of the sucro-energy Industry and the new Greenfield Projects in Brazil from the view of the equipment industry straw, and 112 MW from bagasse plus 100% straw (Olivério and Ferreira, 2010). These figures confirm our premise that bioelectricity production and the full use of sugarcane are the greatest potential area for evolution when targeting efficiencies and yields. The most competitive future greenfields which will deliver more profits to the stockholders investors are those with the highest efficiencies yields in the production of sugar, ethanol, bioelectricty per tonne of cane.

Fig. 23 – Trend: increased sugar equipment and plant capacity/productivity – Clealcool Mill sugar plant. More information regarding these equipment/solutions can be seen in Figures 17 and 18, Olivério 2011; Figure 19, Olivério and Ferreira 2010.

and and and and

A large number of “new mills” have already incorporated solutions (equipment, plants) related to this development driver, as can be seen in Figures 24 to 28, which we present to show that good solutions already exist, have already been implemented, and should be improved and used in the “future greenfields”.

The driver “increased capacity and productivity” is one of the most effective trend of the new greenfields because the investments in equipment, plants, and the mill itself are very sensitive to economies of scale, having a positive effect on CAPEX (Capital Expenditure), and, therefore, usually largescale solutions result in specific low-cost investments, i.e., the larger the scale the lower the investment expenditures per tonne of processed cane per crop (TCC).

Driver 2: Efficiency and yield increases It is natural that this driver should influence the future greenfields design because in essence this means producing more with less. Solutions resulting in a larger amount of products per tonne of cane are usually more competitive, with lower costs, thus enabling larger sales volume.

Fig. 24 – Trend: increased efficiency and yield – cane and straw dry cleaning and separation plant, allowing energy production from straw and minimum sugar losses by replacing cane wash

The industry has advanced considerably in sugar production, where losses are relatively small, but still there is room for further developments in the ethanol process (in fermentation there is great potential of improvements), and mainly in bioelectricity production. With respect to energy, sugarcane has not ben used to its full potential in Brazil. There are wastes in the mills processes, as well as an effective low use of the energy available in bagasse, especially in straw (crop residues). Table 3 illustrates the state-of-the-art technology for potential bioelectricity to be exported to the grid: a state-of-the-art mill of 12,000 TCD can provide 50.7 MW of surplus power while few “old mills” have the capacity to produce surplus electricity. Even the “new mills” are not optimised, producing surplus power not over 30/35 MW. By using the energy from straw, Table 3 shows that a potential surplus is even more representative: 84MW from bagasse plus 50%

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Fig. 25 – Trend: increased efficiency and yield– Fluidized bed boiler allowing flexibility on fuel utilization: new bagasse (because of mechanical harvesting + bagasse from diffuser + straw utilization + higher moisture + “sulphur traces” + “chlorine traces”), concentrated stillage, other solid recovered fuel, operating at a higher energy efficiency.

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Expansion of the sucro-energy Industry and the new Greenfield Projects in Brazil from the view of the equipment industry More information regarding these equipment/solutions can be seen in Figure 24, Gurgel 2012; Figure 25, Faiad and Acenso 2011; Figure 26, Olivério et al. 2010b, and Amorim and Olivério 2010; Figure 27, Moura 2006, Moura and Medeiros 2007 and Olivério et al. 2010c; Figure 28 Gabardo 2011 and Ferreira 2012. This driver, “increased efficiencies and yields” is crucial to the business economic results because it means more products for the same, or less, inputs. It has a positive impact on OPEX (Operational Expenditure), by reducing direct costs or variable costs per unit produced and, thus, allowing higher operational profits.

Fig. 26 – Trend: increased efficiency and yield – Ecoferm: higher fermentation yield, lower stillage volume, energy optimisation.

Driver 3: Sustainability increase Today, sustainability is mandatory in all human activities. Pressures of society, scientific facts, governments, laws, and even the consumers awareness are demanding more and more sustainable solutions and practices, including, and particularly, in industrial activities. The sucro-energy mill is no exception; on the contrary, in mills, the need to comply with sustainability concepts is even greater, because their products are food (sugar) and energy (ethanol and bioelectricity) for which the whole world today demands sustainable solutions.

Fig. 27 – Trend: increased efficiency and yield – sugar losses reduction and lower steam/energy consumption – Bunge Santa Juliana Mill Evaporators, Laginha Mill split feed distillation, Distillation/Dehydration Dedini membrane Demo Plant at São Martinho Mill.

In addition, such demand is even stricter, since ethanol and bioelectricity are presented as “green”, clean, renewable energy from biomass, with optimum energy balance, and are beneficial to people and the environment because of the improved air quality, decreased pollution, and the mitigating effect of the greenhouse gases; additionally, from its production processes solid wastes and effluents can be recycled, and, at the same time, replace fossil inputs. Both ethanol and bioelectricity are considered sustainable products and, therefore, it would be inconsistent if they were produced using unsustainable resources, and technologies. For that alone, this driver would be important to influence the future greenfield projects. Furthermore, the full use of sugarcane still has a huge potential to further improve the favorable balance that the industry has attained with respect to sustainability.

Fig. 28 – Trend: increased efficiency and yield – stillage concentration plant with energy integration reducing energy/steam consumption (Gabardo, 2011; Ferreira, 2012)

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As a result, we understand that this will be one of the most important drivers of technological

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Expansion of the sucro-energy Industry and the new Greenfield Projects in Brazil from the view of the equipment industry development to be considered in the expansion of the sugarcane industry in Brazil. In fact, some sugarcane mills have already been submitted to an evaluation from specialized auditing companies which are internationally qualified to certify those mills that comply with sustainability criteria and systems, such as Bonsucro EU, ISCC International Sustainability and Carbon Certifications, etc (CNI 2012). Following, we highlight some of the solutions for sustainability that have already been employed. Vinasse, an effluent from ethanol production, is sent back to the cane field, thus making use of its fertilizing and salvage irrigation qualities and eliminating its potential polluting potential when discarded into water courses; Concentrated vinasse, which enables its application in more distant crops, eliminating the use of sacrificial areas near the mill and the consequential risk of becoming saturated with salts that would ultimately contaminate the groundwater. The use of process residues as fertilizers, such as boiler ashes and soot, and filter cake, replace chemical fertilizers and prevent them to become polluting agents; and Reduced water consumption in the industry, which has been obtained over the years, is a major goal of new projects currently. Table 4 next illustrates such evolution, and it is worth noting that some mills already have achieved better results, lower than l tonne of water/tonne of cane. Table 4: Evolution of water consumption in the mills Typical intake water consumption to produce ethanol Year

m³ water/t cane

l water /l ethanol(4)

1975(3)

15.00

187

1990(1)

5.60

1997(2)

5.07

2005(3)

1.83

(1) PERH – Plano Estadual de Recursos Hídricos (State Plan for Water Resources), 1994/95

(2) CTC – Research with 34 mills in São Paulo State, 1997 (3) CTC/Unica – 2005 (4) Assuming 80 litres ethanol/t cane

a) Better rates of “clean energy output” per ”fossil energy input” are the result of the increasingly use of bagasse and straw to produce bioelectricity, raising the rates from 7 to over 10. (CNI 2012; Seabra and Macedo, 2008). But in order that “sustainability increase” could be considered a driver, the development of a systemic approach was necessary, which would be used to produce sustainable projects. As a result, to meet the new world demands for sustained solutions in the economic, environmental, and social aspects, Dedini has developed the DSM – Dedini Sustainable Mill (Olivério et al., 2010a). It is a product in continuous development and was commercially available in 2008 in its first commercial stage. The innovative feature of DSM is that it is a physical system, comprising of, for example, machines, tubes, tanks, and sustainability is more evident in the operational management. The question then is: How can a set of physical items contribute to sustainability? This question is briefly answered in Figure 29, that also describes the concepts of “increased sustainability” as employed in the DSM design. What is DSM – Dedini Sustainable Mill? The following text explains what is DSM, considering a higher focus on environmental issues, for simplification reasons. To conceive the DSM, the mill needed to be seen as a “macro-machine”, designed to meet the optimum criteria of sustainability, with emphasis on the environment. Therefore, DSM was conceived to enhance the environmental qualities of ethanol without neglecting the business economic results and social aspects. In the DSM, developed technologies enable the production of 6 bioproducts: biosugar, bioethanol, bioelectricity, biodiesel, biofertilizer and biowater in a single, integrated design, aiming to minimize emissions while maximizing the contribution of sugarcane ethanol to the mitigation of GHG-greenhouse gases. The DSM can be implemented gradually, as it is the case of the Barralcoool Mill in Barra do Bugres, MT, which has been producing the first 4 Bios since 2006, with a pioneering biodiesel plant supplied by Dedini and integrated to the mill (Figure 38).

NOTE: Some mills consumption < 1m3 water/t cane

If you compare the DSM with a traditional mill, you will find the following benefits:

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Expansion of the sucro-energy Industry and the new Greenfield Projects in Brazil from the view of the equipment industry

DRIVER: SUSTAINABILITY INCREASE DSM - DEDINI SUSTAINABLE MILL

ECONOMIC 

DSM is competitive in a free market, without subsidies

SOCIAL

ENVIRONMENTAL 

DSM solutions include the commitment of not wasting (also minimizing consumption) and not polluting the environment and the natural resources, mainly air, water, energy, materials/raw materials, biodiversity, and minimum or zero generation of emissions, effluents, residues, and odors.



DSM complies with the standards and regulations, reducing/ eliminating environmental impacts, and contributes to agricultural sustainability



DSM contributes to, and makes it easier, the management system ISO 14001

 In

DSM, the equipment, processes, materials, installations need to be located, to move, to operate, complying with the best practices and regulations to provide comfort hygienic and safe conditions, and good health in the workplace  Using ergonomics concepts, DSM provides appropriate man-machine interactions, requiring minimum physical efforts from workers.  DSM uses automation through integrated and intelligent software, MES level, linked and integrated to ERP System  DSM contributes and makes it easier the management system SA 8000

Fig. 29 – Sustainable development characteristics of the DSM - Dedini Sustainable Mill b) It optimises the production processes by increasing yields and efficiencies and allowing the maximum production of biosugar and bioethanol per tonne of cane. Therefore, much more gasoline can be replaced by ethanol, thus reducing GHG emissions even further; c) It optimises the use of the sugarcane energy by producing the maximum bioelectricity to be supplied to the grid, also by using sugarcane “straw” as a source of energy. With a greater supply of energy from renewable sources, the use of fossil fuels can be avoided, thus diminishing emissions; d) It includes the integrated production of biodiesel in the mill with agricultural integration (e.g., soybean production in rotation with sugarcane) and industrial integration (biodiesel plant added to the mill, with the use of vegetable oil from soybean and the renewable bioenergy from bagasse and bioethanol, thus enabling a 100% green biodiesel, in substitution for methanol from fossil origin, which is traditionally used as the second feedstock). So, ethyl biodiesel is produced to fuel the crop fleet and to be sold to third parties as a new business, in both cases replacing fossil diesel and avoiding emissions;

the

e) It uses all process wastes as feedstock for production of BIOFOM – Organomineral

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biofertilizer, which replaces at least 70% of the chemical fertilizers and also contributes to mitigate emissions; f) The mill becomes water self-sufficient, using, saving and recycling only the water contained in the sugarcane and without requiring water uptake from natural sources, also producing surplus water to be exported: the biowater. It should be noted that a typical mill requires 23 litres of water per litre of ethanol produced, while the DSM exports 3.7 litres. g) The DSM incorporates the most advanced concepts of occupational hygiene and safety. Considering all items mentioned above, higher economic results would be obtained, as well as an optimised accomplishment of the three sustainability pillars: economic, social and environmental. As a final result, the DSM attains two concepts: optimisation and zero concepts. In the optimization concept, the goal is to use the minimal amount of feedstock and inputs to obtain maximum products per tonne of cane: maximum biosugar, bioethanol, bioelectricity, and integrated biodiesel production. The DSM also meets the zero concept, whereby the goal is the zero use and zero contamination of the natural resources and maximum environmental preservation, allowing: zero wastes /

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Expansion of the sucro-energy Industry and the new Greenfield Projects in Brazil from the view of the equipment industry zero effluents / zero odors / zero water from natural sources /minimum CO2 emissions. It is noteworthy that the bioethanol produced by the DSM has a mitigating greenhouse effect as significant as 112% (132% when using 50% of the straw as energy source), while the ethanol produced by the traditional mill represents 89% of mitigation (Olivério et al., 2010a). Finally, the DSM enhances the sustainability of the sugarcane industry and may contribute significantly to the mitigation of climate changes caused by the global warming. The DSM is the result of the integration of various technologies under the focus of sustainability, some of them developed by DEDINI itself or with partnerships, resulting in eleven patent applications, eight filed by Dedini, some of them already granted. Figure 30 is a schematic representation of DSM

Fig. 31 – Trend: increased sustainability – reduced water consumption in water self-sufficient mill design.

Fig. 32 – Trend: increased sustainability – The Biowater Production Mill. Fig. 30 – DSM – Dedini Sustainable Mill: The 6 BioProducts, the optimisation and zero concepts, and maximum mitigation effect on GHG

Most of the technologies used in DSM design are presented in this study, including solutions for maximum biosugar, bioethanol, and bioelectricity production. For biodiesel production integrated to the mill, some information will be provided later in this study, and more details can be found in (Olivério et al. 2007). With respect to biowater and Biofom, following Figures 31, 32, 33 and 34 summarize the information relating to the production of these byproducts.

Fig. 33 - Trend: increased sustainability – elimination of effluents and residues via Biofom production process.

As references for biowater, we cite (Olivério et al. 2010a, 2010d), and for Biofom (Olivério et al. 2010e).

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Expansion of the sucro-energy Industry and the new Greenfield Projects in Brazil from the view of the equipment industry renovation lands, which benefit both cultures; the energy surplus that cane provides attracts other industries to the mill’s proximity. Figure 36 illustrates the integrations that can be accomplished. Having as core elements the land, human, physical, and financial resources, as well as systems and management, integration in the sugarcane mill takes place in the farm, in the industry, in management/business, and leads to economic, energy and process integration.

DRIVER: SYNERGY AND INTEGRATION

Fig. 34 - Trend: increased sustainability – agricultural evaluation of Biofom as a proven organic biofertilizer. Figure 35 presents an option that is being analysed in Brazil: to process sweet sorghum at the sugarcane mill. Sweet sorghum is produced integrated and in rotation with sugarcane, allowing diverse feedstock processing, longer operation crop period, increasing bioethanol and bioelectricity production, so, contributing to a better return on sugarcane plant investment.

ECONOMIC INTEGRATION

FARM INTEGRATION (CROP)

RESOURCES

PROCESS INTEGRATION

LAND HUMAN PHYSICAL FINANCIAL

BUSINESS/ MANAGEMENT

SYSTEMS MANAGEMENT

INDUSTRY INTEGRATION (MILL)

ENERGY INTEGRATION

Fig. 36 – Trend: synergy and integration – different solutions available at the sugarcane agribusiness.

Figures 37, 38 and 39 illustrate three real cases of synergy and integration, of which Santa Vitória mill is in the stage of design/implementation.

DRIVER: SYNERGY AND INTEGRATION ENERGY INTEGRATION IS AN OLD TOPIC IN SUGARCANE AGRIBUSINESS ETHANOL-AND-ENERGY PRODUCING UNIT (BIOETHANOL MILL) 1985 - DESTILARIA COAMO - CAMPO MOURÃO-PR-BRAZIL – DEDINI TURN-KEY SUPPLY JUICE

CANE

Fig. 35 – Trend: Increased sustainability by processing sweet sorghum at the existing sugar cane mill. (Gurgel,2010)

Driver 4: Synergy and integration The sucro-energy mills and the respective crop areas are extremely favorable to synergy and integration. Some practices currently in use in Brazil are clear evidences of this trend: intercropping of sugarcane with other cultures in crop rotation systems, in

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RECEPTION

PREPARAT./ EXTRACTION

Bioethanol

BIOETHANOL PROCESS

Stillage

Bagasse ELECTRICITY GENERATION

STEAM GENERATION BOILER: 30 BAR/350º C

BIOETHANOL MILL 2 500 KVA

Steam Process

Electrical Power 3 000 KVA

EDIBLE OIL PLANT 3 000 KVA

Fig. 37 – Trend: synergy and integration – Ethanol and energy mill (steam, bioelectricity); energy supplied to an edible oil producing plant near the mill (energy integration of two plants) – Coamo Mill.

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Expansion of the sucro-energy Industry and the new Greenfield Projects in Brazil from the view of the equipment industry

DRIVER: SYNERGY AND INTEGRATION AGRICULTURAL AND INDUSTRIAL INTEGRATION  ( ENERGY + PRODUCTS + PROCESSES) INTEGRATION

1st

GENERATION 4 BIOS MILL – BIODIESEL PRODUCTION INTEGRATED TO A SUCROENERGY MILL Biodiesel Plant integrated to Barralcool Mill

Barralcool Mill

SURPLUS BIOETHANOL + WATER DEHYDRATED BIOETHANOL IN EXCESS

BIOENERGY

BIODIESEL - USED AT THE FARM

BIODIESEL/GLYCERINE SOLD TO THE MARKET

SOYA OIL

Sugarcane Farm/ Refurbished Area DEDINI: INTRODUCTION OF THE CONCEPT TO THE WORLD MARKET AND FIRST WORLD SUPPLY/ 1st WORLD CONTINUOUS ETHYLIC PROCESS PLANT BARRALCOOL MILL: 1st MILL IN THE WORLD PRODUCING THE 3 BIOs: BIOETHANOL, BIOELECTRICITY AND BIODIESEL, PLUS BIOSUGAR = 4 BIOs MILL

This driver “Synergy and Integration” has positive effect on CAPEX, OPEX, management/business fixed and logistic costs

Fig. 38 – Trend: synergy and integration – Synergies between bioethanol/bioelectricity and biodiesel processes – farm, business/management, industry (process, energy), economic integrations – Barralcool Mill integrated to a biodiesel plant. DRIVER: SYNERGY AND INTEGRATION PRODUCTS AND ENERGY INTEGRATION

GREEN PROJECT – DOW/MITSUI - SANTA VITÓRIA PROJECT (MG) CANE

BIOETHANOL MILL ETHANOL

STEAM

CANE

6 mi to 8 mi TCC

ELECTRICITY

BIOETHYLENE

BIOETHANOL MILL ETHANOL

STEAM

ELECTRICITY

LINEAR BIOPOLYETHYLENE

350.000 T/YEAR LINEAR BIOPOLYETHYLENE

Fig. 39 – Trend: synergy and integration – bioethanol/bioenergy (steam, bioelectricity) mill x linear biopolyethylene plant integration – Santa Vitória Project. Let’s examine the integration of biodiesel production in the sucro-energy mill as represented in Figure 38 (Olivério et al., 2007). In the agricultural sector, know-how for oleaginous grains production in rotation to sugarcane crops is already available. A traditional practice is the cultivation of soybean in areas of sugarcane renovation, after 4-5 cuts. Such practice maximizes land productivity with optimum and profitable use of the land. It also breaks the cycle of pests and diseases and

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contributes to recover the soil fertility; from soybean can be extracted the oil to be used as feedstock for biodiesel production. Another synergy that benefits integration is the shared use of farming and industrial infrastructure and resources, allowing cost savings, optimised use of facilities, and less investment. This includes tractors, harvesters, trucks, machinery, agricultural implements, steam, co-generated electrical power, water, integrated solutions for wastewaters, agricultural and industrial manpower, and shared use of plants, facilities and support services. An important integration is the use of three products from the sugarcane mill as inputs for the biodiesel plant: anhydrous bioethanol (as the second feedstock; the first is vegetable oil), bioelectricity and steam. The surplus bioethanol with water, which derives from biodiesel production, as can be seen in Figure 38, is reprocessed in the distillery already available at the mill and, after dehydration, bioethanol is sent back to the biodiesel process. The biodiesel produced can fuel the vehicles used in the production of sugarcane and the oleaginous grains. Regarding management and businesses, there are some synergies and advantages that we can point out: a new market is created for anhydrous bioethanol (currently methanol is used as the second feedstock), the increase of income/profits from the new products,

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Expansion of the sucro-energy Industry and the new Greenfield Projects in Brazil from the view of the equipment industry biodiesel and glycerin, which also helps to dilute market risks. Biodiesel commercialization will make use of the experience and expertise developed in the bioethanol business, and will be made with the same clients. The operational structure and management systems can be shared. When using biodiesel in the mill vehicles, the fuel is exempt of tax, so it costs less (for being own production), and replaces diesel, which is taxable fuel. The Coamo Mill Figure 37 presents energy, economic, management/business integration (Olivério and Ribeiro, 2006), which is also seen in Dow/ Mitsui Santa Vitoria Project, Figure 39. In addition, the intermediate product from the latter, bioethanol, is the feedstock for biopolymer, the end product of the project, i.e., linear bio-polyethylene (Dow 2012), defined as the biggest biopolymer integrated plant in the world. It is worth noting that this driver, synergy and integration, has a positive impact on both OPEX and CAPEX, as well as on management and business, including a possible reduction of fixed and logistic costs.

Driver 5: Higher value-added products from sugarcane and the sugarcane mill Today, sugarcane is processed predominantly into three end products: sugar, ethanol, and bagasse and bioelectricity. However, as it is a biomass consisting of organic components, it can be the raw material for a large number of products. Sugarcane is basically constituted of Carbon, Hydrogen and Oxigen, which, after been broken down and then recombined via chemical reactions, may generate an almost infinite variety of compounds.

As technological advancements promote cost savings, bioproducts become more competitive, and on this logic is based the use of cane to produce them. As a result, the sugarcane mill design will be changed accordingly, so that new processes, equipment, and plants can make such new products. This is a more sophisticated way to produce higher value-added products from sugarcane. And we can already find numerous examples, new real cases in Brazil, in which the mills have promoted upgrades in this direction. Another way, more simple, is the processing of cane products and by-products into higher value-added products, by means of additional process stages. Figures 40 and 41 are examples: Figure 40 presents an “upgraded yeast” production plant integrated to a mill, and Figure 41, refined sugar can be produced directly by the mill using traditional processes (production of raw sugar and, from this, refined sugar) or by incorporating a new technology (production of refined sugar directly from the juice in a single crystallization step, Olivério and Boscariol, 2006). In Figure 42, a sodium bicarbonate plant (having CO2 from fermentation as feedstock) is integrated into the ethanol mill (Olivério et al., 2010a). Figure 43 also illustrates this new greenfields development trend: a larger amount of products to be made in the future mills, consisting of higher valueadded products serving profitable market niches. The example in Figure 39 also illustrates this trend driver, the production of linear bio-polyethylene production using ethanol as a feedstock.

But we need not go that far: in sugarcane juice, we can find several types of sugar; in bagasse and straw, several cellulosic and lignocellulosic materials. For these tree inputs there already exist numerous chemical, physical, and biological processes and their combinations, which may be used to obtain products, many of them with high economic value. With the advancements of science and technology, new processes have been introduced for this purpose. Most of the products obtained mainly from non-renewable fossil materials can be produced from biomass.

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Fig. 40 – Trend: higher value-added products – use of sugarcane juice as a feedstock to produce large amounts of upgraded yeast for animal feed (export market) – Biomass to Animal Feed Plant integrated to Vale do Ivai Mill.

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Expansion of the sucro-energy Industry and the new Greenfield Projects in Brazil from the view of the equipment industry Regarding Figure 43, there are many projects being implemented in Brazil: ▪

In a joint venture between Amyris and the São Martinho Group, a farnesene plant using sugar as feedstock is being added to the São Martinho mill (Amyris, 2012);

▪

Amyris has also partnered Paraiso mill to produce farnesene by means of a plant integrated to the mill (Amyris, 2012);

▪

PHB Industrial, a joint venture between Pedra Agro Industrial and Balbo Goup, is expanding the biodegradable plastic plant integrated to the Usina da Pedra mill (Biocycle 2012);

▪

Granbio is integrating a 2 generation ethanol plant in Usina Caeté, using bagasse as feedstock (Graalbio, 2012);

▪

Many international companies that are investing in the Brazilian sucro-energy sector as well as some traditional businessman announced partnership and investment with technological bio-based chemistry companies, declaring future plans to integrate new plants into a sugarcane mill to produce bio-products from sugarcane: Bunge and Solozyme, Rhodia and Cobalt, Butamax a joint venture between BP and DuPont, Total and Amyris, JB (Brazilian Sugarcane Mill Group) and SAT (anon, 2012).

▪

Many mill groups in partnership with diverse technology-based companies, were selected by Brazilian Development Bank – BNDES and Engineering and Technology Development Agency - FINEP to be considered to be granted with prime financing credit lines to develop new technological routes for the production of new bio-products, as well as second-generation ethanol (based on enzymatic cellulose hydrolysis) and third-generation biofuels/bioproducts (BTL Biomass to Liquid technologies), comprising bagasse/straw gasification for synthesis gas production, which in a Fischer-Tropsch type reactors are converted into synthesis bio-products (PAISS, 2012).

Fig. 41 – Trend: Higher value added Products – Refined sugar production integrated to a sugar mill using different feedstocks: raw sugar (Vale do Paranaiba) and sugarcane juice (DRD-Dedini Direct Refined)

Fig. 42 – Trend: Higher value-added products – “green” sodium bicarbonate production using CO2 from fermentation as feedstock, integrated to São Carlos do Ivai Mill. DRIVER: HIGHER VALUE ADDED PRODUCTS FROM SUGARCANE AND SUGARCANE MILL

New technologies will be integrated to the Sugarcane Mill towards a Biorefinery, producing higher value added products Feedstock: Sugarcane Juice, Concentrated Juice, Syrup, Sugar, Bioethanol, Bagasse, Straw. Different kind of fuels and several types of chemical specialties can be produced from the above feedstocks, through specific fermentation processes and physicalchemical complementary treatments.     

Fuel as renewable diesel oil (1) Jet Fuels (1) Lubricant oils (1) Cosmetic products (1) Aromatics and flavors (1)

    

Butyl Alcohol (2) Solvents (2) Biodegradable Plastics (3) Polypropylene (4) 2nd and 3rd generation products (5)

Some companies are in early commercial or in advanced stage of development: (1) Amyris, (2) Braskem, (3) PHB Industrial, (4) Rhodia, (5) GranBio

Fig. 43 – Trend: Higher value-added products –higher value bioproducts integrated to a sugarcane mill, using sugarcane components as a feedstock – the sugarcane mill will become a biorefinery.

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All these projects, already underway in Brazil, allow us to conclude that the BIOREFINERY integrated to the SUGAR MILL, will be, or rather already is, a REALITY.

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Expansion of the sucro-energy Industry and the new Greenfield Projects in Brazil from the view of the equipment industry

The new “greenfields” and the sugarcane mill equipment industry The Brazilian sucro-energy industry will be in considerable expansion, with projections of 120 “future greenfields mills”, and doubling the processing capacity. This work aimed to show that such future expansion has a large number of solutions already underway, which means that solutions are ready to be used in the new configurations of the “future mills”. In order to contribute to this discussions, aiming to foresee the trends in conceptual design of the “future mills”, in this paper we propose a model using five drivers that will define the evolution trends regarding products, capacities and technologies, from the view of the equipment industry. As a consequence, an important question now arises: is the equipment industry ready and able to meet such huge expansion, not only in Brazil, but worldwide speaking? We know that until now the equipment industry has succeeded in responding accordingly to the growth of the sucro-energy business. In ProAlcohol period, more than 300 ethanol mills were installed in 10 years (Olivério 2007), and recently 117 “new mills” started operations. The expansion already attained, from 68 million tonnes (1975/76) to 620 million tonnes of processed sugarcane per crop (2010/11), was fully achieved by the equipment industry, with almost 100% own development and supply. But this is the picture of the past. And what about the future? For a secure and reliable response, we should review again the respective “capability” and “competitiveness” of the equipment industry in the light of the new challenges. We understand that in this case “capability” means “to meet the market needs”, i.e., to fulfill the technological needs, having industrial, manufacturing, and financial capabilities as well as guarantees.

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Likewise, as “competitiveness” we understand “to meet the clients’ needs”, i.e., the industry should offer quality, delivery times and prices competitively, according to the client’s requirements. Taking into account the past accomplishments and the most recent supplies, conclusion is that the equipment industry has the necessary capabilities and competitiveness to fully meet the market and the clients’ demands. Figure 44 summarizes these conclusions. THE NEW “GREENFIELDS” AND THE SUGARCANE MILL EQUIPMENT INDUSTRY IS THE EQUIPMENT INDUSTRY PREPARED AND ABLE TO ATTEND THE NEEDED HEAVY EXPANSION ON SUGARCANE AGRIBUSINESS?

CAPABILITY

COMPETITIVENESS

ATTEND TO THE MARKET NEEDS

ATTEND TO THE CLIENTS NEEDS

CAPABILITY

COMPETITIVENESS

 TECHNOLOGICAL

 QUALITY

 INDUSTRIAL/MANUFACTURING

 DELIVERY TIME

 FINANCIAL/GUARANTEE

 PRICE

Fig. 44 – Evaluation of the equipment industry “capability” and “competitiveness” to meet the heavy expansion of the sugarcane agribusiness.

This work aimed to show that such future expansion has solutions already underway, and that there are processes, equipment, and plants, that means, solutions ready to be used in the new configuration of the “future mills”. Our conclusion is that the equipment industry is prepared to serve the future with updated and innovative technologies, adequate supply capacity, and competitive quality, delivery time, and prices. Finally, this is a challenge that the equipment industry accepts and is ready to meet.

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Expansion of the sucro-energy Industry and the new Greenfield Projects in Brazil from the view of the equipment industry

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