Bp investment plant woodpellets

BRAZIL BIOMASS AND RENEWABLE ENERGY SCENE

INVESTMENT INDUSTRIAL WOODPELLETS LAGES SC

BRAZIL BIOMASS AND RENEWABLE ENERGY 570 Candido Hartmann 24-243 Champagnat Curitiba Paranรก 80730-440 Phone +0055 41 33352284 Skype Brazil Biomass EMAILS diretoria@brasilbiomassa.com.br brazilbiomass@aol.com Brazil Biomass http://www.wix.com/abibbrasil/brazilbiomass Brazil WoodPellets - http://abibbrasil.wix.com/brazilpellet

BRAZIL BIOMASS AND RENEWABLE ENERGY INVESTMENT

THE COMPANY BRAZIL BIOMASS SCENE

Brazil Biomass and Renewable Energy WoodPellets is manufacturer of wood chips pine and eucalyptus and bio wood pellets. The company was founded in 2000 in the Curitiba, State Paranรก Brazil.

With their combined production capacity, we are capable of supplying several hundred thousand households with environmentally friendly wood chips and pellets. Brazil Biomass and Renewable Energy is the largest business consulting and development of industrial projects in Brazil in bioenergy and biomass.

We are deploying the largest international unit Biopellets Sugarcane Bagasse in Sao Paulo with the most modern industrial technology and a product of high quality energy.

This project that has been recognized around the world and is used as a model for other companies to use raw materials (sugar cane bagasse) 100% renewable resource that reduces greenhouse gas emissions.

Vision. Brazil Biomass and Renewable Energy will be instrumental in expanding the utilization of renewable energy systems throughout the Brazil and will be the customer's first choice in the communities we serve. Our vision is to optimize renewable energy and sustainable development for future generations.

Mission. Our environmental sustainability.

mission and

is

to grow community

Values. We conduct our business with openness, fairness and integrity. We strive for innovation, creativity, learning, excellence and environmental stewardship in all that we do. We help our customers succeed. We provide exceptional service to our customers, meeting their requirements and exceeding their expectations.

Brazil Biomass and Renewable Energy its President Celso Oliveira. Consultant on several national and international industrial projects in Renewable Energy and Biomass Management and Wood BioPellets.

Director of the European Energy SRL. President Brazilian Association Industry Biomass and Renewable Energy

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BRAZIL BIOMASS AND RENEWABLE ENERGY INVESTMENT

EXECUTIVE SUMMARY Project Title: Industrial WoodPellets Brazil SCENE Information Nominee: City Lages, Brazil Country: Brazil Nominating Institution: Brazil Biomass and Renewable Energy Brazil Business sector: Energy Public/Private: Private Project description and objectives: The project involves the construction Pellets production facility in South Brazil.

In spring 2012, a group of forest industry managers and members of Brazil Biomass and Renewable Energy came together as a "Working Group" to pursue a wood pellet plant for Lages Brazil. The Working Group formed Brazil Biomass and now plans to construct a $5.5 million wood pellet plant that will produce 70,000 or 80,000 tonnes of wood pellets per year while providing jobs and economic development.

Wood pellets are a renewable source of fuel. To get more wood, you simply grow more trees. When trees grow, they use energy from the sun to convert CO2 into wood. When wood is burned, the CO2 emitted is the same CO2 that was taken out of the atmosphere by the growing plant. This means that overall there is no change in the levels of atmospheric CO2. Even allowing for CO2 emissions produced by fossil fuels used to make the energy needed for planting, harvesting, processing and transporting the fuel, replacing fossil fuel with wood pellets will typically reduce net CO2 emissions by over 90%. It is because of these qualities that European power plants currently import about 1.800,000 tonnes of wood pellets per year from USA and Canadรก. Europe presently consumes 14 million tonnes of wood pellets annually, a figure that is expected to rise to 80 million tonnes by 2020.

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BRAZIL BIOMASS AND RENEWABLE ENERGY INVESTMENT

EXECUTIVE SUMMARY Transition impact: The project will have a significant transition Impact derived mainly from: supporting SCENE regional expansion business encouraging foreign direct investments into South Brazil, skill transfer as well as demonstration effect of environmentally sound wood processing and bio-fuel industry in Brazil, promotion of sustainable forest management standards and certification through market mechanisms in Brazil. The project will also contribute to the facilitation of more efficient use of wood resources.

Santa Catarina expect their basic needs to be met. They expect the State of Santa Catarina to plan for and develop an environment that produces social and economic benefits that meet current and future needs, while preserving and restoring the health of the natural environment. Investments in renewable energy result in a net increase in jobs.

Goals and Initiatives. The Plan’s goal is to encourage and accelerate the sustainable production of energy from renewable sources, stimulate economic development, particularly in rural parts of the state, and improve the environmental future of the state. The Plan intends to demonstrate a variety of technologies for tapping renewable resources, and to help remove barriers to renewable resource development. Currently, there are biomass combustion boilers at more than industrial sites in Santa Catarina. These boilers supply heat and energy for industrial processes.

New biomass energy markets may provide a way of disposing of otherwise problematic forest biomass residues from timber harvests, stand improvement activities, fuels treatments, and thinning in a costeffective manner. However, investments in forest and other biomass conversion to energy will lead to multiple environmental, economic, and social benefits. These include:• reduced wildfire risks to communities and wildfire suppression costs to taxpayers • increased timber supplies • improved forest health, water quality, wildlife habitat, and recreation areas • reduced air pollution from wildfire and prescribed forest. • extended landfill life with recovery of biomass • reduced and avoided carbon dioxide emissions, and • maintenance of family-wage jobs and a forest industry infrastructure in rural Santa Catarina.

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BRAZIL BIOMASS AND RENEWABLE ENERGY INVESTMENT

THE WOODPELLET INDUSTRY Wood pellets are densified biomass fuel typically made from material rejected by wood product SCENE manufacturers. By pelletizing residual forest waste, sawdust, planer shavings, and beetle-killed timber, millions of tons of waste can be put to work for the bioenergy economy while enhancing the environment by reducing greenhouse gas emissions.

Our primary goal at Company Brazil is to establish an international biomass energy producer providing a high quality value added product that will provide a competitive, environmentally based energy source. Brazil Premium Wood Pellets has a current production capability of 2014 70.000 tonnes year and 2015 80.000 tonnes of high quality, premium grade wood pellets annually. Premium quality wood pellets are available in 40lb bags, palletized in 1 ton lots for retail distribution. Bulk quantities are also available in mini bulk bags (1 ton), truckloads, rail car loads, or ship hold lots for offshore markets.

The pellet mill is positioned on a major highway and a major rail line and has been designed for efficient operations, shipping and handling. Manufactured from lightweight, soft, pine shavings, sawdust and fines left over from the processing of pine and spruce trees.

Pellets are pressed from dried wood shavings. Two types of raw materials can be distinguished. A sawmill residual wood is used. These are wood chips and saw dust shavings as well as co-products called waste or by-products in the sawmill industry. For several years, we are also producing our own chips. In addition, so-called industrial wood, round wood (logs) not suitable for sawing, is used. Then the chip is fed to the manufactoring process for production of pellets. The chips are further crushed in the hammer mills to the desired grain size, dried and the pelletized. For your pellet heating system or your pellet stove to operate efficiently and trouble free, our pellet production is monitored constantly.

Meticulous quality control, excellently trained staff and modern equipment guarantee a high quality pellet.

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BRAZIL BIOMASS AND RENEWABLE ENERGY INVESTMENT

THE WOODPELLET INDUSTRY Investment profile for 80.000 TPY plant WoodPellets Lages SC Pellets have 4.5 to 5 MWh per ton, or 18.5 - 20 GJ/tonne ton

SCENE

Wood is made up of Carbon, Nitrogen and Oxygen. It has a typical calorific value of 19.2 GJ/tonne dry matter. One tonne of wood fuel with a moisture content of 45% has a calorific value of 9.42 giga joules.

Common forms of wood fuel are pellets, wood chip and firewood.To store the fuel for a wood chip boiler, one needs much more room than for storage of wood pellets. Wood chips will weigh ca 200-250 kg/ m3, wood pellets ca 650 kg/m3, pellets occupies 3 times less volume.

1 Metric Ton (1000 Kg.) Wood Pellets = 444 litre of bunker oil (heavy oil) 1 Giga Joule = 25.8 litre furnace oil 1 Giga Joule = 24 litre bunker oil 1000 Kg wood pellets = 18.5 Giga Joule 1000 Kg wood pellets = 18.5 * 25.8 = 477 litre furnace oil 1000 Kg. wood pellets = 18.5 * 24 = 444 litre bunker The typical house needs 14 m3 loose volume of wood chip, or 2200 kg of wood pellets, to replace 1000 litres of oil for heating and utilities. Typically made from sawdust from wood, a ton of pellets puts out approximately 20.4 gigajoules of energy. With a price of less than $5 a giga joule in the province, before manufacturing of pellets, including transportation, the pellets are a competitive alternative to natural gas.

Carbon credits 922,29 kg of CO2 per year for 8 MWh per home 922,29 kg of CO2 x 31250 homes = 28818 tons of CO2 year x ( U$ 20,00/ton ) = U$ 576,393.00 in carbon credits

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BRAZIL BIOMASS AND RENEWABLE ENERGY INVESTMENT

THE WOODPELLET INDUSTRY Demands on our resources. Our Wood pellets Brazil are manufactures using untreated natural wood.

SCENE Origin and source of our raw materials are in the course of our quality management system continuously recorded and documented. For instance, foreign substances such as wood representative, glues and/or plastics, paints and other coating materials are excluded.

Monitoring the Production. The production of Pellets is monitored constantly. This way we guarantee a consistent high quality pellet.

Self monitoring: Regular samples are taken and all the important parameters are examined and documented. This is done in accordance with the requirements of the quality management as per ENplus A 1 and DINplus. At Pellets we conduct this investigation even more frequently than the required standards.

It's a renewable resource, right in our own backyard. Premium Wood Pellet Pine heating systems do not contribute to ozone levels and are considered to be in compliance with the Kyoto Accord stance on air emissions.. Premium Wood Pellets Pine are refined biomass which transports around the globe.

No tree is ever cut down for commercial pellet production. Instead, pellets are produced from forest industry waste wood. Automatic feed systems on the new state-of-the-art Premium Wood Pellet home heating systems mean less work for the operator.

Premium Wood Pellet Pine costs are stable, and not subject to the whims of foreign producers. Burn at a very high temperature, eliminating the waste product so often associated with wood heat.

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BRAZIL BIOMASS AND RENEWABLE ENERGY INVESTMENT

POTENTIAL BIOMASS RESIDUE LAGES SC Forest agribusiness has main economic activity in Lages/SC region. From this activity are generated SCENE significant volumes of residues, glimpsing to use for energy production. Many productive segments have started to use biomass as a source for energy generation causing significant changes in this market.

The main conclusions were: a) the forest production sector is focus in wood production of pinus species, vertical integration is high, technological level raised and small production is not integrated to the industry are the bigger concerns, ambient legislation and evolution of the planted area are restrictions; b) the industrial sector, with exception of the cellulose and paper, showed low level in technology, management of processes and qualification of human resources and does not have action of collective planning aiming at reorganization for improvement of this competitiveness conditions; c) the generation of biomass energy sector shows a trend of increase of investments, aiming to use more forest residues and residues from forest industries for generation of thermal and electric energy, being that, one of the determinative factors is the identification of availability and potential of generation of residues in the region; d) the treatment of forest and industrial residues are consider inadequate and it is a current difficulties that limit utilization as raw material for energy generation; e) there are many organizations in the region that supply information, scientific and technological support and representation of sector to the chain however they are linked mainly to the biggest companies; f) there is favorable institutional environment to use forest residues for energy production, over all because there is scarcity fossil fuels and search for renewed resources is increasing; and g) the diagnostic and prospective analysis of the critical factors to the performance of productive chain allowed to identify demands to research, qualification and collective actions, which will be able to subsidize public and private managers on elaboration strategic planning actions.

RESIDUE BIOMASS LAGES SC

Quantity (t/monthy)

%

Biomass Fuel Wood Chips

37.738,0

48,31

Wood Chips

11.100,0

14,21

Sawdust

10.851,0

13,89

Biomass

8.350,0

10,69

Bark

3.630,0

4,75

Dust

2.190,0

2,80

Dust News

2.176,0

2,79

Residue

827,0

1,06

Residue and Bark

690,0

0,78

Residue Pinus

290,0

0,37

Residue Bark Pinus

280,0

0,36

Wood Chips Residue

80,0

0,10

78.122,0

100,00

TOTAL

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BRAZIL BIOMASS AND RENEWABLE ENERGY INVESTMENT

POTENTIAL WOOD LAGES SC SCENE

We have a large forestry assets in the region that could be used for the sustainable production of Woodpellets Lages Santa Catarina: Bulk total (m続)

Assortments of wood (m3)

5-10 years

10-15 years

> 15 years

Total

Bulk > 30cm

0,00

0,00

1.316.829,64

1.316.829,64

25-30cm

0,00

20.640,73

11.674.201,21

11.694.841,95

20-25cm

0,00

3.515.804,94

17.815.185,58

21.330.990,52

15-20cm

24.186,54

8.951.198,09

9.319.102,05

18.294.486,68

12-15cm

1.396.772,56

4.940.015,55

3.861.856,15

10.198.644,26

8-12cm

1.795.850,43

2.119.115,31

1.519.418,81

5.434.384,55

<8 cm

740.712,72

1.114.599,61

1.088.916,82

2.944.229,15

TOTAL

3.957.522,25

20.661.374,23

46.595.510,26

71.214.406,75

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BRAZIL BIOMASS AND RENEWABLE ENERGY INVESTMENT

INCENTIVES LAGES SC Our technical team has been present in the region and shark in the state of Santa Catarina where a SCENE radius of 80 km had contact with over fifty companies produce 80.000 - 100.000 tonnes per month of forest residues and wood. Are used 90% in the cultivation and processing of pine, and also one of the places of greatest concentration of forest residues unexplored and causing environmental problems.

Armed with this information, we sought data and background information about the area, forest plantations, power generation and waste recovery. We maintain a contract with the largest producer of chip dirty / clean wood to meet our design business.

The tax incentives provide will be to: I - exemption from municipal taxes for a period of ten years; II exemption from fees and other fees levied on the construction or expansion of facilities; 1 The exemptions mentioned in this article may be granted to new projects and expansion or extension of existing projects, as many as they occur. 2 The incentives could be granted, including the enterprises already benefited from the grant of exemption from taxes and municipal taxes upon its implementation or when the previous expansions and extensions.

The economic incentives to be provided, individually or cumulatively with tax incentives, on available material, equipment, labor, labor and other resources of the municipality at the time of the request form will be to: I - extension of the deadline for payment of municipal taxes; II - implementing all or part of the earthwork services and infrastructure required for deployment or magnification; III allocation of land areas necessary, in appropriate locations; IV - exchange areas in response to requests from existing businesses, since falling into the other requirements of this law; V - project design and / or consulting services; VI - training staff to be recruited in the city; VII - the transfer of charge or not use of property belonging to municipal property or transferred to the municipality, by any form and by any agents, public or private; VIII - concession of real right of use or donation of land to existing business or will be installed in the city in order to meet the socio-economic priorities. IX - other economic incentives, when the development is considered of significant interest to the municipality.

.

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BRAZIL BIOMASS AND RENEWABLE ENERGY INVESTMENT

EQUIPMENT INDUSTRIAL WOODPELLETS Capacity: 10 TON/H SCENE Input Material: Logs with diameter <200mm, Wood Chip with thickness < 5mm, Saw Dust. Product Diameter: 6-8mm (optional) Product Density: 1.1 - 1.3 Ash Content: 1.0% Calorific Value: 4500 (for wood as input material) Final Moisture Content of Wood Pellet: <6,5% The input material must not contain any interfering substances like over-sized material, such as stones, glass, nails, ferrous and non-ferrous metals. As the wood to processed is a natural product, the mentioned data on capacities, product parameters, and consumptions may vary depending on the origin, type and properties of the raw input material.

Pelletizing is the process of making waste materials into solid fuel. The objects are used for burning purposes. Wood Pellet can be made from any type of Forestry waste.

1. Crushing Process: Depending on the different input material, we fit out the suitable Crushing machines. The BX-Series Combined Chipping and Crushing Machine is used for the raw Log with diameter <200mm; SFSP-series Hammer Mill is widely used to crush each kind of straw, wood chip, tree branch, bark and leftover bits from agricultural wastes. The best moisture content in the Crushing Process is less 20%, and the thickness of the wood chip is less 5mm.

2. Drying Process: The best moisture content to pelletizing is about 14-16%. Our new Air-Current Rotary Dryer is made up of Burning Stove and Main Rotary Dryer, which can realize to reduce the moisture from 50% to 10%,and save about 30% energy consumption comparing the old Rotary Dryer. Our burning stove is fueled by coal and wood material, which can save electricity consumption largely. If the users want to use the other fuel such as gas and electricity, one Burner is necessary, but the extra cost will be charged.

Pelletizing Process: Wood Pellet Mill is the most important equipment, which have the following features: (1). The lubrication system for wood pellet mill adopts the tracing and inspecting system controlled by the microcomputer. When the temperature of the bearing is over the normal temperature, the microcomputer will start the round closed Auto-Lubrication System to lubricate the bearings, which complete solved the trouble of lubricating roller depending on the operation experience. The Lubrication System is made up of the tracing and inspecting system controlled by the microcomputer, auto-lubricating system on time and compelled lubricating system by hand. (2). Driving Gear adopts the high precision gear transmission structure. The ring die adopts the hoop fastening method, which is increasing the speed of discharge comparing with the past bolt fastening method. As a result, the capacity is 10-15% higher than the belt transmission structure. (3). As per the ring die and roller of the wood pellet mill, we have the fine machining with the alloyed steel, such and stainless steel. And our heating treatment is also different from the other domestic manufacturer, our carburizing treatment make the depth of hard facing to 2mm, which improve the anti-abrasion of the ring die and roller more than 10 times, it can save the production cost heavily.

Cooling Process: After the pelletizing process, the temperature of the wood pellet is about 60-80 degree, and the moisture content of the wood pellet is about 15%, so we need use Cooler to reduce about 3-4% moisture, such this the wood pellet is easy to store.

But considering the feedback from some foreign clients, the local climate is very humidity; they hope to cool the wood pellet with moisture 7-8%. In order to satisfy the different need from different clients, we develop one kind of new Stabilizer Combined Cooler.

Packing Process: After cooling, the wood pellet will not directly enter into the fuel process, avoiding the wood pellet affected with damp. The packing process is necessary. In this process, we assemble our domestic best Semi-Auto Packing Machine to you.

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BRAZIL BIOMASS AND RENEWABLE ENERGY INVESTMENT

INVESTMENT INDUSTRIAL WOODPELLETS SCENE

MONTHLY (US$)

YEAR (US$)

GROSS REVENUE WITHOUT TAXES

1.080.000,00

12.960.000,00

GENERAL FIXED COSTS AND OUTCOMES

348.904,00

4.186.848,00

FINANCIAL RESULT

731.096,00

8.773.152,00

36.554,80

438.657,60

694.541,20

8.334.494,40

TAX IMPLICATIONS

RESULT FINAL

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BRAZIL BIOMASS AND RENEWABLE ENERGY INVESTMENT

INVESTMENT INDUSTRIAL WOODPELLETS SCENE

RESULT FINAL (USD) CUST FINAL PRODUCTION

4.186.848,00

FINAL COST OF PRODUCTION OF PELLETS (EXPENSES)

12.960.000,00

FINAL FINANCIAL RESULTS (WITH DISCOUNT TAX)

8.334.494,40

INVESTMENT - INDUSTRIAL EQUIPMENT UNIT

5.500.000,00

INTERNAL RATE OF RETURN> DISCOUNT RATE = POSITIVE INVESTMENT INTERNAL RATE OF RETURN> TD = POSITIVE PROFITABILITY INDEX> 1 = NET PRESENT VALUE > 1 RECOVERY EQUIPMENT INVESTMENT PAYBACK IN SHORT-TERM

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BRAZIL BIOMASS AND RENEWABLE ENERGY INVESTMENT

EQUITY CONTRIBUTION AGREEMENT The investment in building will be $5,5 MM in 05 years SCENE • operational costs will be $4,2 MM year.

• gross revenues $12.9 MM per year • profit margin will be $8,3 MM • cost of investment for $5,5 MM financed in 05 years with a discount rate of 12% • sales price FOB of pellets will be 200 dollars per ton; operational costs of pellets will be 110 dollars per ton • pay back of $5,5 MM will be in 2.78 years, and the (ROI) return of investment ( Gain from investment - cost of investment / cost of investment) will be 221% • NPV - Net Present Value of project after 10 year will be $31 MM • IRR - Internal rate of return 43% The contract guarantees that we provide to the investor: Equity Contribution Agreement for Financial Support of sponsors (Sponsors Support Agreement) commitment to contribute to shareholder equity by the investor integrating themselves into society for the specific purpose of fulfilling the obligations of the company with the loan for financial security to pay the costs of the first shipments of woodpelletscost overrun). Using its trading it will operate the project financially international woodpellets to advance financial and ACC and to monetize a letter of credit to the security of the supply and industrial. (b) Termination Undertaking (also called completion undertaking) --- commitment to completing the design of the first shipments of wood chips, and (and) agreements on distribution of dividends to the security of financial return. (c) The shareholder investor will have the security and the participation of 20% of the shares of SPE throughout the duration time of the contract. Has the business a fee of 20% of operating profit for the entire duration of the export. But where should the owner of the vessel to the chartering of the ship at cost, it will have a monthly dividend of 20% of operating profit. The operation of investments can be developed in advance of an operation to exchange contract or letter of credit with Bank Guarantees of the first row.



INVESTORS



KIND OF PARTNERSHIP



FINANCING



FORM OF RETURN



MONTHLY PAYMENT



VALUE



USD 5.500.000,00



PERIOD CONTRACT



60 MONTHY



VPL



USD 8.073.000,00



TIR



43,00% 13

BRAZIL BIOMASS AND RENEWABLE ENERGY INVESTMENT

CONCLUSION Since the wood pellet industry growing so rapidly, it is difficult to predict the future with a SCENE high degree of certainty. Several factors point to an extremely positive future for wood pellets: • The international political environment favours all forms of renewable energy - including wood pellets.

• Co-firing wood pellets with coal is a very cost-effective way of reducing greenhouse gas emissions.

• If the ROC caps on co-firing in the UK can be increased or even eliminated, then the UK market for pellets will explode exponentially.

• Brazil presently consumes 98 million tonnes of coal per year for energy production.

The political environment is ripe for federal and provincial governments and operators of coal fired power plants to be convinced of the benefits of co-firing with wood pellets.

The project is also very attractive considering that Europe will substitute 20% its of fossil fuels for renewable energy until 2020.

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