Quality of Pure and Mixtures of Ethanol

Chairman Maria Antoniêta Andrade de Souza: Products and Biofuel Quality Superintendent of ANP – National Petroleum, Natural Gas and Biofuels Agency.

Speakers: João Alziro Jornada: President of Inmetro – National Institute of Measurements, Standards and Industrial Quality Pedro Buzatto Costa: President of the Brazilian Association for Technical Standards (ABNT) Sérgio Fontes: Consultant in Petrobrás Senior Business Sector, Business Solutions Management Sérgio Antonio Fontes: Senior Consultant, Petrobrás Business Supplies Solutions Manager – Petroleum Brazil S.A. Maxwell Shauck: Director of Baylor Institute of Air Sciences, United States of America

Maria Antoniêta Andrade de Souza I would like to speak on the AMNP’s activities and how we establish the quality specifications, in the specific case of anhydrous hydrated ethyl alcohol fuel and ethyl anhydrous alcohol fuel. The legal basis for ANP to specify the products is in article 8 of Law 9.478 dated 1997, altered by law11.096 dated 2005, which introduced the question of biofuels within the attributes of ANP, as well as changed the name of ANP, today the National Petroleum, Natural Gas and Biofuels Agency. At the start of part 1, it says that the ANP is responsible for implementing the national petroleum and natural gas policy with an emphasis on guaranteeing the supply of derivates and biofuels and, above all, protecting the interests of the consumers as to price, quality and offer of the products. We have a succinct chronology of the use of ethanol in Brazil:  It goes back to 1931, when additions were made to imported gasoline;  In 1975, with the advent of Proalcohol, the largest program for replacement of fossil fuel in the automobile market;  In 1989, Brazil is the first country to use ethanol as an octane booster, replacing lead- alcohol in gasoline;  In 1993, the addition of anhydrous ethanol to gasoline in range from 20 to 25%;  In 2003, gasoline, with a fixed percentage of 25% ethanol, was introduced in Flex Fuel cars by Brazilian vehicle assemblers;  In 2006, the addition of a marker to anhydrous ethanol to avoid mixing water and anhydrous ethanol and its sale as hydrated ethanol;  On 1st March 2007, the percentage of ethanol in gasoline was established at 20% ;  In November 2006, the percentage was fixed at 23%;  In June 2007, the Ministry of Agriculture announced the forwarding of a measure to increase this percentage to 25%, meeting the claims of the sugar-alcohol group. The exportable excesses continued growing in the search for demanding markets. We were the largest producers of ethanol in the world, today it is the United States. We need to live with the idea that the North Americans, by the next year, Hill be self -sufficient in ethanol. Quality is a set of characteristics that define a product. We have the specification, comprised of a minimum set of physical-chemical characteristics and their necessary limits, for the suitable performance of the product. We work with premises, related to economic questions, the availability of the product, adaptation of its use, technology and, obviously, the environment. The legal base of the ethanol quality in Brazil is established in the ANP resolution no 36 dated 2005. There are two kinas of ethanol: a) Anhydrous, used in mixtures with gasoline; b) Hydrated, used in alcohol vehicles and Flex Fuel vehicles, which may be supplied with mixtures of C and A gasoline. The comparison of the Brazilian specification with that of international ones is perfectly aligned, in spite of some differences, for example, in relation to the United States, where natural alcohol is not used. In Brazil, the alcohol is pure with water. The anhydrous alcohol has in the mixture a maximum of 0.7% water, and hydrated alcohol had 7% water. In the United States, ethanol has been added to gasoline since 1970. The mixture is often done with 10%, with tax advantages. Comino from maize, the manufacturers give a full guarantee to vehicles designed to use only gasoline, without modification to the design. The federal government does not define a specification for the rest of the country. The renewable Fuels Association, national entity for the sale of ethanol fuel, recommends the ASTM and D4806 standards. For ethanol fuel in mixtures of 75 and 85%, the ASTM D5798 is recommended. The State of California, with its own regulations for the quality of ethanol, adopted limits for sulfur (10 milligram per kilo) and some additional specifications to ASTM. The gasoline with which the refineries work may contain a maximum of 30% sulfur. In the European Union, ethanol is obtained from cereals, beetroot sugar, potatoes, and sub products from the agro industry. There are two applications for ethanol: a) Addition of up to 5% to gasoline, done by Switzerland, Poland and Spain, in small quantities; b) Conversion of ethanol to ETBE to mix with gasoline, in France, Poland, Spain and Italy. The expectation for the use of biofuels in the European Union in transport systems is 6% in 2010 and 7% in 2015, with the percentages based on energetic content and not on liquid volume. There is no standardized specification for ethanol. Switzerland did tests with E85, in a restricted number of Flex Fuel cars, while Spain, Germany and England studied the adoption of the E85 mixture. Finland established the addition of ethanol (wine), of 5% to gasoline. In France, of ethanol production, 70% comes from beetroot and 30%, from cereals. It is the country which has most advanced in the production of ethanol in the block. In 1987, a law allowed the addition of 3% pure anhydrous ethane or up to 15% of ethers like ETBE. In Italy, ethanol from wine is largely used in the production of ETBE. Spain and Switzerland produce ethanol, respectively, from flour, grains and timber. ANP established a resolution to mark anhydrous ethanol at the beginning of January 2006, for avoidance questions. The taxes were not collected. We detected a substantial reduction in the rates of non compliance of hydrated ethanol sold in the fuel stations in Brazil. UIT the addition of coloring, we had a firm entrance of legal ethanol into the market. In Alagoas, Brazilian state with the lowest consumption of fuels, in a general manner, there was a sale, monthly, of hydrated ethanol in the order of 800 thousand to one million liters. After the adoption of the coloring, the number increased to 5 million liters. In Eastern and Central Europe, although Russia predominates in production, ethanol is predominantly for the production of drinks. The Baltic countries, like Poland, Hungary, Estonia and Kazakhstan, showed interest in the production of ethanol fuel. In Poland, the specification for anhydrous ethanol is based on the ASTM, the same as the United States, but will be replaced by a future European specification, Ander study and revision. In China, the third largest producer of ethanol in the world, alter the United States and Brazil, manioc is used, sweet potatoes and sugar cane. The regulations through the GB18351-2001 standard, implemented in July 2003, define the addition of 10% ethanol to gasoline. India allows a mixture of, at the maximum, 5% to gasoline, in accordance with the Indian Standard 15464-2004. In Thailand, ethanol is produced from sugar cane, sugar syrup or manioc. The country uses the specifications for industrial ethanol or absolute ethanol, as it is known for certification of the product. The specifications for ethanol fuel are defined between the parties involved in the purchases contracts. The specification of ethanol is suited to the national market. There have been found to have elevated indices of quality in the reseller stations, according to the actions of ANP, the monitoring program both for hydrated ethanol as the gasoline mixture with anhydrous ethanol. We have data coming from more than 300 producers. To map problems of non compliance and direct inspection actions, with a base on resolution no 29, dated 2006, ANP contracts universities and research centers (45% in the Southwest region, 21% in the South, 6% in the North, 19% in the Northwest and 9% in the Center-West), to collect 150 thousand fuel samples per year. This program is an integrated monitoring and inspection action. The samples are collected, analyzed in 24 hours, and the results sent on-line to ANP. I would like to register that the elimination of technical barriers is indispensable to place and give credibility to ethanol as an international commodity. Making the quality of the product more transparent and facilitate the sale. Harmonize specifications through international methods, with the definition of reference materials and standardization pf measures, property and limits. Respect the specialties of the markets: distinct fleets, raw materials and processes. Seek cooperation between the regulatory organs and the standards entities in the national and international ranges. Thank you

João Jornada Inmetro is a Brazilian state organ in the center of a series of technologies fundamental to ensure the quality and competitiveness of products and services with relation to technical specifications, specifically those which are quantifiable. An important aspect to organize production is to use the technology of standards and regulations, I mean to say, to specify clearly what people want in actions of collective interest. Standards are specifications emanating from a technical segment of society and are of voluntary use. Technical regulations are compulsory prescriptions, emanating from a governmental agent. Inmetro makes regulations of a measurement nature, measurement of quantifiable values. Specifically with relation to a fuel, the government organ is the ANP. UIT relation to technical standards, ABNT is the entity. In front of the standards and regulations, it is fundamental to have discipline, to know if a product or service is in accordance with that specified or prescribed in a standards document. The technique of seeing whether a product or service meets a standard and regulation is called “compliance evaluation”, made by an external entity, through systems, protocols and rules, mounted by Inmetro. The discipline that seeks to give confidence in the measurements is all metrology. Inmetro is a Brazilian state metrological institution, that disseminates harmonized standards with its with its overseas similars. In the specific case of ethanol, we work with measurement standards to check their accuracy, reliability and international acceptance. In a globalized world, Inmetro is the Brazilian state institution with this representation in the appropriate international forums. The National metrology System was created in Brazil in 1973,, standardization and Quality (Sinmetro), coordinated by the National Metrology Council, standardization and Industrial Quality (Conmetro), presided over by the Ministry of Development, Industry and Commerce. To Inmetro it competes:  To formulate and coordinate the national metrology policy;  O ensure the uniformity of the units of measure in the whole country. Inmetro is a federal government autarchy, with a focus of national development, protection of the citizen, in health, environment and in excellence and efficiency in technology. It acts in metrology: a) Industrial science connected to the definition and dissemination of standards and measures; b) legal to deal with relations between companies and the consumer in general (scales, taximeter etc.). Inmetro is: 1) An accrediting organ for organisms and laboratories, with international acceptance; 2) The focal point of the Word Commerce Organization with relation to technical barriers; 3) Organ for support for the diffusion and innovation of technical knowledge in its area of action. Each country has its metrological organism: Inmetro in Brazil, the National Institute of Standards and Technology (Nist), in the United States, and others. There is an international organism situated in France, which is the Bureau International des Poids et Mesures (BIPM), with a headquarters in Paris, which coordinates the actions of all the metrological organisms in the world. Inmetro supports the insertion international of Brazil and the extension of its capacity of overcoming technical barriers. In the biofuels, the challenge is to create the technical conditions to turn them into commodities, with involvement in the questions of social and environmental responsibility. The business war is enormous. The beetroot planters in Europe do not want to know about importing Brazilian ethanol at a lower price. Then, these resistances arise. To assemble reference material, I mean to say, a chemical standard for biofuels, we need to be certain of their homogeneity and stability. These properties need to meet the ISO standards, mainly Isso/Remco, guide 33 and 34, to have international acceptance. A question fundamental for the Metrological Institute is to demonstrate reliability, through the so called key comparison, articulated by the central metrology organ in the world, the BIPM. In ethanol in water, there are inter-comparisons between various metrological institutes, including Inmetro. The objective of metrology is exactly to harmonize internationally to have a base and propitiate commercial exchanges without problems. The work with ethanol is within a context of agreement between Brazil and the United States for the development of bilateral metrological standards in the area of biofuels in general, more specifically ethanol. In June last year, we had a symposium, and an agreement was signed between Brazil and the United States, with the definition of a series of actions. This same work was consubstantiated by a ministerial science and technology meeting between Brazil and the United States. The advantage of this is to compensate a standard between Brazil and the United States, for us to make a base for universal standards, used and accepted in the whole world. Often quality is thought of as something intrinsic to a product, in the impurity content of X, Y and Z, ethanol, in this case. In truth, the concept of quality, from the 90s, has expanded and covers points in its production process, mainly as a function of aggression to the environment and treatment of labor. Brazil, as a function of preparation for technical barriers, has already suffered from a series of criticisms and Hill have new problems for exporting in the future. Here is an example: the Brazilian ethanol industry is based on an army of 200 mil poor workers, in conditions similar to slavery. It could not be otherwise. We need to see the context and prepare ourselves for it. Overseas, they pick on something and generalize. The beetroot planters lobby may not remain unprotected. This is the game of commercial warfare. We worked to counter attack this kina of accusation and avoid the arousal of trade barriers. There is already a series of these policies with relation to the question of forestry handling. Today, paper and cellulose do not sell without social-environmental certification. Inmetro Developer a system for forestry certification, the Cerflor. Brazil exports more or less US$ 5 billion dollars of certified products per year. Inmetro has experience in similar situations, as in the production of cachaça, the integrated production of fruit and forestry management, which is the very successful 3 year old Cerflor Program. The certification of biofuels with intrinsic parameters of quality and social – environmental parameters. We define this as interested stakeholders. Inmetro, to do this, has the very great international respect of the technical cooperation associations, both in metrology, like the BIPM, and in the area of compliance evaluation. WE are enthusiastic. Thank you.

Maxwell Shauck There are airplanes that fly on a base of 100% ethanol. In 1993, thousands of people saw our aerobatics in piloting an aircraft and were surprised to learn that it functioned on the basis of a clean fuel, renewable and employment creator called ethanol. None of this was motivated by adventure and fortune, but to show ethanol as an alternative with optimum performance to replace gasoline in aviation. During a show in Italy, I met Gazia Zanin, a flying instructor. We decided to cross the Atlantic, from Texas to the Azores, in full winter, when the temperature is cold, with ice and snow storms, at 200 miles per hour, in a light aircraft of 1200 pounds, called “The Velocity”, fueled by ethanol. From the Azores we flew to Lisbon and afterwards Paris, with a total flight of six thousand miles. We received the Harmon Trophy prize, the greatest prestige in the aviation sector and we were received in Washington D.C. by vice-president Dan Quayle. The power of the ethanol powered aircraft shows the capacity for the participation of this fuel. To operate on a commercial scale, its certification to be used in the Cessna 172 was required, the most common aircraft in the USA, used in agriculture. Demonstrations and presentations are important parts of this project, since when we felt that information about ethanol World help clarify some questions. As a result of this effort, the USA are the leaders in the development of ethanol for aircraft. Future generations will look back at us as the providers of safe, renewable and economic fuels. We are in this tie of ethanol versus gasoline for 28 years. The first is much cleaner, with greenhouse effect, high power and lower cost. In 1989, I made the first flight with the use of ethanol. In the nineties, we began to develop biodiesel. We made the first certifications of a Lycoming machine. We certified the Cessna 152 in 1996, and the Pawnee in 2000. Frequently, I argue with the engineers over the lower density due to the high vaporization, but Brazil Developer more power in ethanol. I began to fly in 1980 with hydrated alcohol, because anhydrous was not available. The difference in energy between them is small. The percentages of water reached 15% in my first flights. We work with 20% biodiesel in ETBE. Our test base has been the Dominican Republic, at the so called Green Airport, with a group called LPAG. We have a training and apprenticeship program in aerial science with scientist pilots. Thank you.

Pedro Buzatto Costa The ABNT, created in 1940, is a private non profit organization, recognized by the Brazilian government as a national standardization organ. It is a founding member of ISO, of Copant, the Mercosul standardization association and is also associated to IEC since its foundation. It is a signatory to WTOTBN, Agriman, the good practices code for standardization. With the resources of contributions from its associates, the ABNT has 1132 members and 85 direct employees. We have 2788 meetings and 25,041 participants. We have Developer 9600 standards, 423 published and revised, 5200 published. ABNT’s mission is to provide the standards that society needs, approaching systematic and consolidated knowledge, through standards documents which allow the production, the sale and the use of merchandise and services, in competition and a sustainable manner, in the internal and external market, contributing to scientific and technological development and protection of our consumers. ABNT represents Brazil at the meetings of the international regional committees and cooperates with the institutions of similar organizations. In reality, the standards are prepared in the study commissions, and we need the participation of the businessman. ABNT does not set the standard. ABNT sets for the standard to be set within the principles that rule an institution which works by consensus. It would be impossible to imagine the work of ABNT in standardization, without being intimately connected to Inmetro. The process of standardization arose with a request on the part of those interested in a standard. The study commission should be comprised of producers, consumers, resellers, science, academics and by the government. Balance is needed to avoid distortions. The standard is voluntary, the adoption of it is not obligatory, but, when we enter into a commercial dispute, its existence is almost natural to the business. The more difficult and disputed the market is, the greater the requirement for the product to be in agreement with the standards. The first notion of the quality of a product is to meet the client’s expectations, translated as in the standard. It is easier to be met when there is responsibility and affirmation that the product compiles with the standards. When we arrive at the gas station to fill up the car, whether gasoline or alcohol, my preoccupation is that they are in accord with the existing standards. Without conditions of making this kind of evaluation, our help is the document from the certifying organ, after having been accredited by Inmetro. Today, standardization enters in all sectors (fruit, leather, meat and cuts). The objective is to make the national businessman aware of the necessity for standards, for his participation, so that we have force when we are overseas and participate in international meetings. It avoids elements of discrimination for our products, requirements on sustainability, environment and social responsibility. Thank you.

Sérgio Antonio Monteiro Fontes We will remain more restricted to the specification of anhydrous alcohol, a component of gasoline C, gasoline sold to the consumer, in the order of 25%. The specifications are technical definitions prepared by interested parties, in consensus, transparency, under the aegis of organization, standardization and adopted voluntarily. The specifications of ASTM are eminently voluntary. It is a consensus. They maybe be mandatory for contracts signed between parties. For this, it is very important to be alert to the type of contract. The valid specification is delivery and not the origin. The part of transport and logistics needs to be guaranteed. ANP, with legal attributions, in its decrees, referent to a determined property table, which becomes mandatory. In the United States there are some organs, for example, the EPA, that legislates and creates the specification as from an ASTM. Fuels are elements of the engineering process of designing vehicle engines. The choice of materials (metals, polymers etc.), the fuel specification, the calibration limits, optimization etc. Seek a performance, mainly in the emissions. Fuel is also an integral part of the quality guarantee system in the case of vehicle producers. It is no use to use a non compliant fuel and complain afterwards. The manufacturer compiles with the requirement to use a compliance fuel. For the producers, the definition of the properties of the fuel is a fundamental factor, because:  It meets the legislation;  Guides the choice of the most suitable production process;  Established the investments to be made;  Supplies a fuel within certain characteristics;  Operates a business process unit in a profitable manner. The first specification for ethanol was based on pharmaceutical products. Afterwards, there was a work in the eighties, of tests, with the Ministry of Industry and Commerce, the Secretary of Industrial Technology, producers of vehicles and petroleum. A specification was established with the most important properties for the performance of ethanol in vehicles. The influence of the property of ethanol in the quality of gasoline is divided into two types:  One, intrinsic to ethanol, of altering the quality of the gasoline, in respect to the octane rating, volatility, oxidation stability, mixture stability, formation of deposits;  Another, connected to the quality of ethanol, which would be the contents of ethanol, copper, sulfur and phosphorus, acidity, pH, electrical combustibility, the part of oxidation attack, corrosion , and also the degree of hydration. The degree of hydration and the stability of the mixture are catalogued. According to the property of the gasoline base, when the ethanol is added, there may be a greater or lesser increase in the octane rating. In the same manner, each naphtha matured to be formed to gasoline has a different reaction. In respect of the volatility, the distillation curve is not very sensitive in terms of performance. The addition of ethanol increases the vapor pressure according to the composition of the gasoline. and as to oxidation, corrosion, presence of copper and sulfur, acidity, deposits in the engines, the use of the additive, the temperature and concentration of ethanol? Petrobras, knows about these questions, as well as being a trading company, supplies services and consultancy to importing countries and the petroleum companies, in the formulation of gasoline. Although the addition of ethanol to gasoline alters some properties, this is not an impediment to the use of the ethanol-gasoline mixture. We have used it in Brazil for many years. Petrobras has a large experience in the use of the mixture and transfers this experience to their clients. The current specifications of anhydrous and hydrated ethanol may be considered as a world reference and it is also important to remember that the cost of a test may not be a reason to remove a property from the specification. This is very little. Thank you.