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05  December  2006

Small, decentralized biofuel production plants

Luiz Prado

Luiz Prado is a journalist and an economist with a PhD in Biology and Human Ecology. He dedicated his life to environmental protection and sustainable development, acting in governmental positions, large consulting companies, international financial organizations, and private equity investment funds. He is now an independent consultant and can be reached at : www.luizprado.com.br .
In Southern Brazil, a cooperative of small farmers is setting a standard for effectively sustainable production and use of biodiesel. This decentralized model of biodiesel production will add value and income generation to small farmers.


In Southern Brazil, a cooperative of small farmers is setting a standard for effectively sustainable production and use of biodiesel. This cooperative, with technical support of German NGOs, has now tested for several months a small facility that can produce cold pressed vegetable oil for nutrition or, after an additional filtration, to direct use as fuel for vehicles. Different agricultural sources of oil can be used as raw material. Vehicles have used the filtered oil for more than 20.000 km without any problem. In addition – as opposed to governmental policies -, the cooperative will soon start the production of similar small facilities that can be transported on top of a rack of no more than 3 square meters. Suppliers of parts have already been selected and assembling will start once negotiations with the regional development bank are finalized in order to establish dedicated credit lines for small farmers, through associations or not, to acquire the oil extracting and processing equipment.

      

Decentralization is key to food and energy security! But in addition this model will add value and income generation to small farmers. Among the many reasons for this assertion is the fact that small farmers and their cooperatives or associations will not be dependent on large oil processing plant and on the few conventional traders who control the business. In fact, they will not be dependent on one single source of income and their product will surely have more aggregated value. On the one side, because the cold pressed edible oil has a higher nutrition value, better taste, and attains a better market price. On the other, because the residue of cold pressed oil has also a much higher market price due to its nutrition properties both for human consumption – production of cookies, cakes, pasta, and other – and for animal feeding. In addition, as self suppliers of fuel, these farmers and their associations will not pay the very high Brazilian sales taxes on fuels (as well as on all other products and services) that usually attain up to 18%.

Mixing of vegetable oil that use chemical extraction and then transported for long distances to be mixed to fossil diesel in specially built facilities before being distributed – i.e. once again transported for long distances – is surely not the best economic approach to attain any target for renewable energy in this area. A 2% consumption of vegetable oil in the overall consumption of conventional diesel could surely be easier and less expensive if there were focused targets on special fleets which get their fuel in specific pump stations, such as urban buses and some large transportation companies. Increasing these targets could also be attained by establishing a network of tanks of pure vegetable oil along the main transportation roads – transportation in Brazil is almost 100% done by trucks and buses -, as it has occurred before with natural gas.

The State Government of Parana and the Brazilian Ministry for Rural Development (which is different from the Ministry for Agriculture, which has a much larger budget, staff and deals with large agribusiness) have provided the project with some small financial support. A more strong commitment will surely reduce or even avoid many of the conflicts on land tenure that have marked Brazilian history and still happen very often.

Additional information on the special purpose company that will soon start the production of such small facilities can be found at www.biovegetal.com.br. The web page of the cooperative is www.cooperativawitmarsum.com.br.


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