1. MINISTRY OF MINES AND ENERGY Secretariat of Oil, Natural Gas and Renewable Fuels Biofuel: Investment and Partnerships Marco Antônio Martins Almeida

2. Biofuel: Investments and Partnerships 1970-2020: 50 years in perspective The share of biofuels in Brazil Ethanol: from Pro-alcohol to Copenhagen Biodiesel: the new biofuel in Brazil The expansion of production in Brazil Biofuels and the Oil Industry Biofuels and the Consumer Conclusions

3. 1970 – 2020: 50 years in perspective ... in other words: the world will continue to use oil

4. Variation in demand for primary energy: 2007-2030 OECD countries Coal Other countries Oil Natural Gas Nuclear Hydro-electric Fossil sources will continue to be preponderant: 77% of rise in demand until 2030 Biomass Other Renewable - 500 0 500 1 000 1 500 2 000 Mtoe Source: IEA – World Energy Outlook 2009

5. Biofuel: Investments and Partnerships 1970-2020: 50 years in perspective The share of biofuels in Brazil Ethanol: from Pro-alcohol to Copenhagen Biodiesel: the new biofuel in Brazil The expansion of production in Brazil Biofuels and the Oil Industry Biofuels and the Consumer Conclusions

6. Recent Changes to Vehicle Fuels Use (Brazil) Anhydrated Ethanol Hydrated Ethanol Gasoline Diesel

7. Recent Changes to Vehicle Fuels Use (Brazil) Millions of m3 BY VOLUME 1990 2009 ETHANOL TOTAL: 11.4 24.0 ANHYDR. ETHANOL: 1.2 6.3 HYDRAT. ETHANOL: 10.2 17.7 Anhydrated Ethanol Hydrated Ethanol Gasoline Diesel

8. Biofuel: Investments and Partnerships 1970-2020: 50 years in perspective The share of biofuels in Brazil Ethanol: from Pro-alcohol to Copenhagen Biodiesel: the new biofuel in Brazil The expansion of production in Brazil Biofuels and the Oil Industry Biofuels and the Consumer Conclusions

9. US$ Millions of m³ Price of oil (US$) Consumption of ethanol in Brazil (m3) Consumption of gasoline in Brazil (m3) 2003: Flex-Fuel 1975: Pro-alcohol 2004: Biodiesel Source: BP Statistical Review 2009/ MME 2010

10. Fuel demand for Otto cycle vehicles Total demand for Otto cycle (with LPG) Total demand for Otto cycle (without LPG) Gasoline consumption 1.4 billion barrels of oil shipped US$ 20 billion Emissions avoided of more than 900 million tonnes of CO2 年

11. Biofuel: Investments and Partnerships 1970-2020: 50 years in perspective The share of biofuels in Brazil Ethanol: from Pro-alcohol to Copenhagen Biodiesel: the new biofuel in Brazil The expansion of production in Brazil Biofuels and the Oil Industry Biofuels and the Consumer Conclusions

12. Biodiesel: The New Biofuel in Brazil 2008 a 2012 2005 a 2007 A partir de 2013 2% 2% 5% Autorizado Obrigatório Obrigatório • Law no. 11.097/2005: As of to to Authorized Obligatory Obligatory Market: 1 billion liters/year Market: 2.4 billion liters/year • Targets planned by the government: Jan-Jun Jul – Dec Jan – Jun Jul –Dec Jan –

13. Biofuel: Investments and Partnerships 1970-2020: 50 years in perspective The share of biofuels in Brazil Ethanol: from Pro-alcohol to Copenhagen Biodiesel: the new biofuel in Brazil The expansion of production in Brazil Biofuels and the Oil Industry Biofuels and the Consumer Conclusions

14. Ethanol: Strong expansion of internal market Export Other purposes Billions of liters Fuel Source: MME / PDE 2009 – 2018 (preliminary results) Source: MME / PDE 2009 – 2018 (preliminary results) Billions of liters Biodiesel: Guarantee of supply of B5 with diversification of raw materials

15. 9% of production Amazon Forest Twice the distance between Shanghai and Beijing Principal areas of sugarcane planting production in 2009: 26 billion liters 91% of sugarcane production Source: NIPE-Unicamp, IBGE, CTC, UNICA, EPE and MAPA Location of production plants (in operation / design / being installed)

16. Biofuel: Investments and Partnerships 1970-2020: 50 years in perspective The share of biofuels in Brazil Ethanol: from Pro-alcohol to Copenhagen Biodiesel: the new biofuel in Brazil The expansion of production in Brazil Biofuels and the Oil Industry Biofuels and the Consumer Conclusions

17. Biofuels versus fossil fuels Fossil fuels Biofuels 0.08 x 1012 liters/year In the world 3.3 x 1012 liters/year Fossil fuels Biofuels 24 x 109 liters/year ... in Brazil Data refers to 2008 (Source: BP / MME) Light and medium derivates considered: Diesel, Gasoline and KAV 69 x 109 liters/year

18. Biofuels and Oil • The world will continue to use oil in the coming decades, with increasing environmental restrictions • Biofuels will have an increasingly important role, whether in mixtures or as replacements for fossil fuel. Biofuels, not just in Brazil’s opinion, are the best option to reduce the carbon content of fuels. • Biofuels are increasingly part of the investment portfolio of large oil companies. Petrobras, Shell and BP are examples of this. • The growing use of biofuels in the world is not a threat to investments in E&P, to the contrary, contribute to enabling the exploration of non-conventional oil. • With the Pre-Salt resources, Brazil has the potential to become an important actor in the geo-political world and to maintain its policy of incentives in the production and use of biofuels.

19. Principal partnerships with the Oil Industry • PETROBRAS: Investments of the order of US$ 2.8 billion in production of biofuels. Partner with Tereos. • BP: Investments of more than US$ 1 billion in Brazil for ethanol fuel production. Partners with Energy Biosciences Institute in California, with DuPont in the United Kingdom and joint venture with Verenium. • CHEVRON: Joint venture with Weyerhaeuser. Partners with the Technological Institute of Georgia and with the University of California in Davis (R&D). • EXXON MOBIL: Investments of US$ 600 million in biofuels with Synthetic Genomics. • SHELL: Partners with COSAN in Brazil, Iogen in Canada, Choden in Germany, Virent Energy Systems in the USA and investments in Codexis in the USA. • TOTAL: Investments in Gevo Biofuels, in the USA. Source: Ecomii (2010)

20. Biofuel: Investments and Partnerships 1970-2020: 50 years in perspective The share of biofuels in Brazil Ethanol: from Pro-alcohol to Copenhagen Biodiesel: the new biofuel in Brazil The expansion of production in Brazil Biofuels and the Oil Industry Biofuels and the Consumer Conclusions

21. Positive Externals for Biofuels • Renewable energy source • Best CO2 balance in the life-cycle • Contributes to energy security • Distribution of income, principally at the agricultural stage • Biofuels industry is not concentrated (multiplicity of companies, actors and countries) • Reduction of principal pollutant emissions • Higher job and income generation in the production chain

22. Conclusions • With the use of biofuels, Brazil shows that it is possible to obtain: • protection of consumer interests in the supply, guarantee of the supply, price/tariff and the quality of energy obtainable • diversification and energy security • expansion of internal energy supply as a pre-requisite of social and economic growth • mitigation of emissions of pollutants and greenhouse effect gases