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The business case for action
Future International Climate
Policy Workshop
The Business Case for Action
Ildo Luis Sauer
Petrobras Gas and Energy Director
PETROBRAS
The business case for action
STATEMENT OF G8 CLIMATE CHANGE ROUNDTABLE-JUNE/2005
G24
•Climate change poses one of the most significant challenges of the
21st century
• Responsibility to act on climate change
• The companies have assets or investiments that would be affected
by changes in climate
• Prospect of increased regulation
• Small costs today can become material costs in the future
• Companies have begun to act in a variety of ways
• Need for further, substantial efforts to reduce greenhouse gas
emissions
STATEMENT OF G8 CLIMATE CHANGE ROUNDTABLE-JUNE/2005
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The business case for action
KEY PRINCIPLES
• Policies based firmly on good science and rational economics
• Policy frameworks that use market-based mechanisms offer the
best hope for unleashing needed innovation and competition
• Solutions must be global
• Integrated approach to the problem and its solutions is critically
important – Business, Government and Consumers
• Climate change mitigation must not be viewed in isolation from
other highly important challenges
STATEMENT OF G8 CLIMATE CHANGE ROUNDTABLE-JUNE/2005
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The business case for action
SCIENCE
•More resources and attention on assessing the magnitude of
adverse effects on human health, natural ecosystems, and regional
and global economies - need of near-term adaptation measures
•Strengthen the global observation systems that are now underway
or may evolve in the future (e.g. sea level rise, sea/ice cover)
•Move expeditiously to adopt climate stabilization targets that will
define the scope and scale of mitigation needed in the years ahead
STATEMENT OF G8 CLIMATE CHANGE ROUNDTABLE-JUNE/2005
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The business case for action
POLICY FRAMEWORK
Create long term value
•Establish a long term, market-based policy framework extending to
2030 that will give investors in climate change mitigation confidence
in the long term value of their investments. Establishing indicative
signals extending to 2050 would also be beneficial
•Ensure that the policy framework is global in scope
•Define greenhouse gas emissions rights through a cap-and-trade
system or other market-based mechanisms
•Address climate change as part of an overall sustainable
development agenda, putting in place mechanisms which address
the challenges of poverty, energy, and economic growth in emerging
markets while mitigating greenhouse gas emissions.
STATEMENT OF G8 CLIMATE CHANGE ROUNDTABLE-JUNE/2005
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The business case for action
POLICY FRAMEWORK
Unleash technological
incentive programs
innovation
through
performance-based
•G8 governments must emphasize performance-based standards in
new initiatives aimed at rapid commercialization of low carbon
technology
•Ensuring compatibility with other societal objectives is equally
important, together with the ability to optimize greenhouse gas
reductions across product life cycles
Establish common metrics
Work toward convergence of existing greenhouse gas reporting
processes and systems.
Utilize the power of procurement and supply chain drivers
Business and the G8 governments should work together to establish
a practical toolkit for integrating climate change into their global
supply chain requirements
Business and government should commit to use such a common
framework and encourage its use in stages of supply chains
STATEMENT OF G8 CLIMATE CHANGE ROUNDTABLE-JUNE/2005
PETROBRAS
The business case for action
POLICY FRAMEWORK
Facilitate greater investment in low carbon economic growth
in emerging markets
• The G8 governments should step up collaborative efforts with
emerging market nations to streamline and encourage low carbon
investment
• The G8 nations should engage in a major new partnership with
China, India, Brazil, South Africa and Mexico to establish appropriate
frameworks
• G8 governments that have ratified the Kyoto Protocol should
launch immediately a consultative process with the UNFCCC to
engage experienced global businesses in an assessment of the
CDM, with the goal of implementing measures to streamline the
process substantially
STATEMENT OF G8 CLIMATE CHANGE ROUNDTABLE-JUNE/2005
PETROBRAS
The business case for action
CONCLUSION
Business and governments can – and must – work together on
climate change mitigation. Working together, we can identify and
implement policy measures that will create meaningful and effective
solutions, while at the same time ensuring long term value for
shareholders. With properly designed programs and incentives,
we can unleash the power of the market to accelerate the deployment of
low carbon technologies, engaging both producers and consumers alike.
And with the right kind of focus on both the needs and aspirations of
emerging markets, we can ensure that a truly global solution to the
problem is achieved.
We are firmly committed to do our part on climate change. A coordinated
and vigorous response from the G8 governments along the lines
suggested above will allows us to do even more.
STATEMENT OF G8 CLIMATE CHANGE ROUNDTABLE-JUNE/2005
PETROBRAS
The business case for action
BRAZIL IN ACTION
DEVELOPED COUNTRIES HISTORIC RESPONSABILITY ON
CLIMATE CHANGE
 COMMON BUT DIFFERENTIATED
RESPONSIBILITIES
AND BRAZIL ASSUMES ITS RESPONSIBILITIES
MAIN GOVERNMENTAL PROGRAMMES:
KYOTO PROTOCOL COMPLIANCE
NATIONAL BIODIESEL PROGRAMME
PROINFA
HISTORIC PROGRAMMES IN ACTION:
PROALCOOL, CONPET AND PROCEL
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The business case for action
PETROBRAS IN ACTION
PETROBRAS STRATEGY DECLARES ITS SOCIAL AND
ENVIRONMENTAL RESPONSIBILITY
AND PETROBRAS ASSUMES ITS RESPONSIBILITIES
MAIN PROGRAMMES AND ACTIONS:
DEDICATED AREA ON SUSTAINABLE DEVELOPMENT AND GHG
EMISSIONS AVOIDANCE PROJECTS
PETROBRAS ENERGY EFFICIENCY PROGRAMME
TECHNICAL AND FINANCIAL SUPPORT TO CONPET
BIOFUELS AND OTHER RENEWABLE ENERGY SOURCES
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The business case for action
Petrobras Energy Efficiency
Programme
•Efficiency actions will save 3,919
bbl oil equivalent / day in 2006 and
7,080 bbl oil equivalent / day in 2011
•It is expected that these actions will
avoid about 615 103 tCO2e in 2006
and 1,111 103 tCO2e in 2011
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The business case for action
Brazilian Programme for Rational
Petroleum Use - CONPET
• CONPET actions reduced the
burning of 272 106 liters of diesel in
2005
• These actions avoided about 974
103 tCO2
PETROBRAS
The business case for action
Biodiesel
2006
2007
2008
2009
2010
2011
Petrobras
Biodiesel Supply
[10³ m³/yr]
1
15
345
572
742
855
Avoided
Emissions
[10³ tCO2e/yr]
2
26
587
972
1,261
1,454
Source: Petrobras Business Plan 2007-2011
•There are no approved baseline and monitoring methodologies of
biofuel project activities in the context of Kyoto CDM
•All proposed methodologies include complex life cycle analysis of
either the biodiesel and the diesel production chain
•There is no definition about CER (Certified Emission Reductions)
“titularity”
PETROBRAS
The business case for action
Coari-Manaus Gas Pipeline
• Operation scheduled for 2008
• Pipeline will supply natural gas for Manaus
area
• Diesel and fuel oil will be substituted by
natural gas at the power plants that supply
Manaus system
• It is expected that the fuel substitution at
these power plants will avoid about 9.5 106
tCO2e in the period 2008-2012
PETROBRAS
The business case for action
Renewable Electricity Generation
Wind Power
Wind Power
2006
2007
2008
2009
2010
2011
10 MWh
5
138
376
488
488
488
103 tCO2/year
1
28
75
98
98
98
3
Source: Based on Petrobras Business Plan 2007-2011
•Until 2011 488 103 MWh will be generated
from wind power plants
•It is expected that the renewable energy will
avoid about 98 103 tCO2 in 2011
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The business case for action
Renewable Electricity Generation
Small Hydropower Plant (SHP)
SHP
2006
2007
2008
2009
2010
2011
10 MWh
0
0
557
975
975
975
103 tCO2/year
0
0
111
195
195
195
3
Source: Based on Petrobras Business Plan 2007-2011
•Until 2011 975 103 MWh will be generated
from SHP
•It is expected that the renewable energy will
avoid about 195 103 tCO2 in 2011
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The business case for action
Natural Gas Flaring Reduction
• Petrobras is making efforts to reduce
natural gas losses
• 4.2 106 m3/day of natural gas flaring
reduction avoided about 21 106 tCO2 in
six years
PETROBRAS
The business case for action
Conversion from single cycle to
combined cycle power generation
• Conversion from single cycle to combined cycle power
generation in Petrobras power plants will avoid GHG
emissions
• Três Lagoas Power Plant (MS) will have an increase of
110 MW in generation capacity, avoiding 400 103
tCO2/year
• Canoas Power Plant (RS) will have an increase of 90 MW
in generation capacity, avoiding 250 103 tCO2/year
• There are also other similar projects in Petrobras
thermal power system that are being evaluated. For
example, Eletrobolt Power Plant could avoid about 120
103 tCO2/year
PETROBRAS
The business case for action
Turboexpander Electricity
Generation
• The instalation of turboexpanders
in Petrobras’ Refineries can be
considered elegible for CDM
• For
example,
a
22.4
turboexpander can avoid
emission of 86,600 tCO2/year
MW
the
PETROBRAS
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N2O Abatement in Fertilizer
Production
• N2O technology abatement in
fertilizer plants can contribute to
reduce GHG’s
• Petrobras’ fertilizer plant could
reduce 57 103 tCO2e/year
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The business case for action
Agrofertilizer Production
• Petrobras is developing a project
to produce agrofertilizers from oil
shale,
which
can
substitute
conventional fertilizers
• It is expected that the use of these
agrofertilizers will avoid about 500
103 tCO2e/year
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The business case for action
Ethanol
• Brazil is pioneer and leader in ethanol
large scale production and use in
vehicles
• New technologies (e.g. flex-fuel) are
improving the use of ethanol in vehicles
• It is estimated that ethanol will avoid
about 93 106 t CO2e in the period 20062012
• These emission reductions are not
eligible under current United Nations
Framework Convention on Climate
Change CDM rules (due to additionality
issues)
PETROBRAS
The business case for action
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