1. Brasil Ecodiesel
Fueling Brazil with Biodiesel
Biofuel Supply Chain Summit 2009
Supply Chain Summit 2009
Ghent – 09/15/09

2. Brazilian Experience on Renewable Fuels

3. Brazilian Experience on Renewable Fuels
Energy Matrix
100%
87,1%
90%
80%
70%
60% 54,6%
50% 45,4%
0%
40%
30%
20% 12,9%
10%
0%
World (2007) Brazil (2008)
Renewable Non renewables
RENEWABLE AND CLEAN ENERGY IS ALREADY A REALITY IN BRAZIL
RENEWABLE AND CLEAN ENERGY IS ALREADY A REALITY IN BRAZIL
Source: Resenha Energética Brasileira – Ministério de Minas e Energia

4. The Brazilian Biodiesel Program
Introduced in 2005, it was based on:
,
• Energy matrix diversification with an eco‐friendly,
sustainable and renewable f fuel.
• Reduction of mineral oil and diesel imports
of mineral oil and diesel imports.
• Social development and job creation while
incentivating family farming, mainly in the
Northeast of the country.
y
• Better use of available lands.

5. Biodiesel: Brazilian Market
Diesel market: potential market size for biodiesel.
Di l k t t ti l k t i f bi di l
Diesel is the main Brazilian fuel, 42% of all oil derivative fuels and more than 50% of transport sector fuels.
Brazilian Mineral Diesel Market (‘000 m3)
50.000 47,000 *
44,188 46,478
45.000 39,663 39,361 37,971 40,947 40 768 42,206
39 663 39 361 37 971 40 947 40,768 42,206
40.000
2007‐ 2008
36,581
8.3%
35.000
30.000
25.000
20.000
15.000
Imports 10.000
('000 m3)
5.000
Internal
Production ‐
('000 m3) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Domestic market extremely significant, allowing for the development and consolidation of the
Domestic market extremely significant allowing for the development and consolidation of the
sector.
5 Source: National Agency for Petroleum, Natural Gas and Biofuels – ANP.
(*) 2009 Forecast

6. Transportation fuels mix
Gasoline C
Gasoline + A h d
G li Anhydrous Eth
Ethanol
l
21,8 + 7,7 = 29,5%
Gasoline: 21,80%
Diesel:49,20%
Anhydrous Ethanol: 7,70%
A h d Eth l 7 70%
Hydrated Ethanol: 17 20%
Hydrated Ethanol: 17,20%
Ethanol (total)
7,7%+17,2%=24,9%
Diesel (total)
B100: 1,30%
49,2% + 1,30% = 50,5% Natural Gas: 2,80%
Source: MME ‐ Resenha Energética Brasileira – Resultados Preliminares de 2008 (Maio/2009)

7. National Biodiesel Program – where do we stand
Biodiesel Law: Mandatory use to leverage production.
July 2008 –
y July 2009 –
y 2010 on
2010 on
2005 ‐
2005 2007 First half 2008
Fi t h lf 2008
June 2009 2010
Authorized Blend of Mandatory 2% Mandatory 3% Mandatory 4% Mandatory 5%
up to 2% Minimum Blend Minimum Blend Minimum Blend Minimum Blend
Expected anticipation of 5% blend, as happened with 3% and 4%...
Brazilian Biodiesel Production (‘000 m3)
2,500
2 500
2,500
Production Increases show the success
2,000 1,645
of the program
p g
1,500 1,168
1,000
402 Current blend percentages are only the
p g y
500 0.7 69 initial stimulus: higher blends and
pure B100 already feasible in
‐
engines.
2005 2006 2007 2008 2009 2010
Production Production Forecast
7 Source: National Agency for Petroleum, Natural Gas and Biofuels – ANP.
(1) Forecast considers B4 in 2S09 and B5 in 2010.

8. The Ethanol Parallel
Government policy and support
Technological Evolution:
Agricultural: the productivity of sugar cane increased from 55t/ha in 1975 to 85t/ha in 2008
Industrial: in the Ethanol production and in the automotive industry
World Trend
Potential for Brazil to become a leader
Domestic alternative with impact in the Trade Balance
Domestic alternative with impact in the Trade Balance
Brazilian Biodiesel can achieve, in less time, the same stage ethanol took 40 years!
It will happen with immediate investments and resources!
ill h i hi di i d !
8

9. The Brazilian Biodiesel Sector
• The biodiesel program was introduced in 2005 and Brazil has
become, already, the world’s 5th largest producer.
• In 2010, B5 will be introduced, representing a 25% increase in the
demand.
• Extensive available areas, climate, strong and increasing domestic
Extensive available areas climate strong and increasing domestic
market favor the growth of the industry.
• Besides the traditional feedstock (Soybean, Sunflower, Cotton and
d h d lf d k( b fl d
animal fats/grease), there are many viable options of non‐edible
vegetable oil – Castor, Jatropha, Palm, Macaúba, Babaçu, etc.
• As the industry matures, Brazil will become more competitive in
the internacional market.

10. The Brazilian Biodiesel Sector (cont.)
• The industry has been working with, aproximately, 50% of its
capacity.
• The industry is most likely to face a consolidation process in the
Th i d t i t lik l t f lid ti i th
near future.
• Verticalization or some sort of control of the feedstock will be
essential for survival.
essential for survival
• Efficiency in the industrial process and productivity in the
agriculture side will be extremely important when the free market
takes place.
p

11. The competitive advantages of Brazil

12. Technology or Raw Material: Key Success Factor?
100% 10%
10% Other Inputs and
80% General Expenses
60% Methanol/ Ethanol
80%
%
40%
Vegetable Oil
20%
0%
Biodiesel Cost Structure
Bi di l C t St t
Technology Well‐Known! Main Input is Vegetable Oil, in volume
and cost.
Not an entry barrier.
Second main input is methanol.
Achieve uniform quality in large scale
production and with different vegetable So, it's a variable cost industry.
oils is the challenge!
oils is the challenge!
Known Technology + Variable Cost Industry =
Access to raw material is the key success factor.
12

13. Biodiesel Producion by Raw Material ‐ B il
Bi di l P d i b R M i l Brazil
jan/09 feb/09 mar/09 apr/09 may/09 jun/09
Soya 71.16% 73.68% 85.37% 76.37% 81.33% 81.10%
Animal Fat 24.54% 19.25% 10.94% 19.36% 16.11% 14.03%
Cottom 3.25% 4.96% 1.59% 2.04% 0.00% 2.97%
Others 1.05% 2.11% 2.1% 2.36% 2.56% 1.90%
Total 100% 100% 100% 100% 100% 100%

14. Optimized Mix of Oils in the Long Term…
SOYA COTTON SUNFLOWER CASTOR JATROPHA PALM
% of oil
18 ‐ 20 15 ‐ 20 40 ‐ 45 45 ‐ 50 30 ‐ 39 18 ‐ 22
in the seeds
in the seeds
kg of oil
400 350 700 700 1,500 3,000
per hectare
Technologically
Developed
Perennial
Edible
Avoid competition for food lands; Diversify Risks!
Higher content of oil per hectare; Optimize land usage!
Take advantage of regional potential of crops; Occupy idle areas, with poor soil correction!

15. Brazil: Land, Climate, Regular Rainfall, Sun
AMAZON REGION: No plantation
expansion, avoiding degradation
NORTHEAST:
Available land, mostly inadequate
for food production;
Excellent for alternative crops, such
p,
as Castor and Jatropha;
Contribution to social development.
BRAZIL - Area Million ha
Total 851
Suitable for Agriculture 340
Cultivated 72
Pastures 172
Available 96
Source: FGVAgro – 2º Brazil –EU Business Summit, Dec 22,
2008. Keynote Speaker Roberto Rodrigues.
CENTER‐WEST, SOUTH and
CENTER WEST SOUTH and
SOUTHEAST: Current main
production areas

16. Fuel Distribution Bases and Diesel consumption
North ‐ 9%
Northeast ‐ 15%
Mid‐west– 11%
Southeast ‐ 45%
South ‐ 20%

17. Brasil Ecodiesel SA
Highlights

18. Brasil Ecodiesel on the map
Major biodiesel producer in Brazil and
the only one with nationwide presence
Biodiesel Plants – 580 ths m3 p.y.
Biodiesel Plants 580 ths m p.y.
6 operational multi–feedstock
Crushing Units
2 operational Multi‐seed– 1,600 tpd
3 Certification Laboratories (CE, TO e RS)
3 Certification Laboratories (CE TO e RS)
Farms: 41,500 hectares of own land + 17,000 leased

19. Investments in agriculture
• Initial investment in Castor based on family
ta est e t Casto based o a y
farming ‐ disappointing results
• Investment in experiments with Jatropha
p p
plantation – 5,000 hectares
• Most likely the company will have Jatropha as
the main alternative feedstock

20. Company s Financial Restructuring
Company’s Financial Restructuring
Debt (in ths R$) 1T09 2T09 After 2nd Capital Raise
Short Term 120,106 92,543 12,877
( )
(+) Long Term
g ,
177,991 136,912
, 80,499
,
(=) Total Debt 298,097 229,455 93,376
(-) Cash 7,416 2,321 151,66
(=) Net Debt 290,681 227,134 -58,284

21. Issues to be tackled by
the Biodiesel Industry

22. Issues to be tackled by the industry
• Worlwide involvement of society in the global warming
issue and in the biofuels discussion.
• The need to lower the cost of biodiesel production.
• Definition of the most suitable feedstock for each region.
Definition of the most suitable feedstock for each region.
• Genetically modified seeds will play a decisive role in
p
productivity of the non‐edible feedstock.
y
• The water footprint and NxO emissions will become
recurrent issues in biofuels discussions.
• Artificial comercial/specification barriers, such as the
land use restrictions and the different national
certifications so as to protect local industries, hindering
world supply of biodiesel.

23. “Biodiesel is an industry in its infancy”
od ese s a dust y ts a cy
“The production of oil seed biodiesel occurs in
conjunction with the production of proteins”
j ti ith th d ti f t i ”
“Mineral oil should be directed to the chemistry y
industry, which is a higher value aggregator”
“How much does it cost not to produce biodiesel?”
How much does it cost not to produce biodiesel?
“Biodiesel: no war required”

24. Thank you!
Contacts:
Investor Relations
Phone: 55 21 2546-5031
ri@brasilecodiesel.com.br
@
www.brasilecodiesel.com.br