The simulation results of a preliminary analysis of Case В are presented in Figure 9.1 for different rates of natural gas replacement. More details of the simulation proce­dure adopted are presented in Walter et al., 1999. The far left points correspond to gas turbine operation with natural gas only, while the far right points correspond to gas turbine operation just with biomass-derived gas. Gas turbine derating influences combined cycle performance. The gradual switch from natural gas to syngas, as far as GT derating is not necessary, increases power production due to (i) a larger gas

mass flow and (ii) an increase in compressor pressure ratio. When a larger amount of syngas is used and GT derating is imposed, net power production drops due to derating itself and due to the increasing power consumption of auxiliaries (mainly syngas compressor and air compressor).

Based on the same economic assumptions previously presented for Case A, a feasibility analysis of partial switch from natural gas to syngas was developed. For all intermediary cases between the two limits (GT operation on natural gas and on syngas only), the installed capital cost was estimated as the cost of a conventional natural gas combined cycle plus the capital cost of a biomass gasifier and gas­cleaning unit. The additional investment on syngas production was calculated according to the amount of biomass required (as received, with 50 per cent mois­ture), assuming a reference value (Faaij et al., 1997) and a scaling factor of 0.70. Finally, a 1.6 factor was applied over the estimated capital cost to take into account the overall set of extra costs regarding GT adaptation and equipment installation.

The cost of electricity as a function of the share of natural gas replaced is presented in Figure 9.2. The same figure includes results that correspond to the impact of credits due to carbon dioxide abatement. As can be seen, carbon credits equivalent to 10US$/t of C02 avoided could make the cofiring option feasible vis-a-vis electricity generation from natural gas in a large range of mixtures between natural gas and biomass-derived gas. At a credit price equivalent to 20 US$/t C02 avoided, electricity generation from cofiring natural gas and biomass is even cheaper than some conventional alternatives.

Finally, Figure 9.3 shows the evolution of investment IDR as a function of the share of natural gas replaced and carbon credits as well. The decline of IDR as far as gas turbine operation is switched from natural gas to syngas is due to the higher

cost of electricity (0 $/t C02). Carbons credits make IDR reduction smoother or can counterbalance this tendency at higher carbon credit prices.

The Abanico Hydroelectric Project is a 30 MW run-of-river mini hydroelectric power plant located in Southeastern Ecuador developed by a local Ecuadorian firm. The location of the project is also one of the most economically depressed zones in the country. The project aims to generate electricity to the national grid and reliable supply of clean water to the nearby communities through a canal to be built within the project design.

Despite Ecuador’s substantial hydropower capacity, which provides about 60 per cent of the country’s electricity, there has been no private investment in hydropower in the country to date. This has been a function of historical risky business environment as viewed by international credit agencies, high real interest rates (14-15 per cent in US$ terms), low external capital investments, low national savings rates, and poor payment record of power off-takers (i. e. energy distributors).

In 2004, the private firm Hidrobanico S. A. developed the Abanico project. The company had assured 65 per cent of the capital expenditure through private equity from several shareholders and had sought financing from the Inter-American

Investment Corporation (IIC), the private-sector arm of the Inter-American Development Bank, for the remaining 35 per cent necessary for building the hydroelectric power plant.

Although the project had strong fundamentals such as high Internal Rate of Return (I RR) of 15.6 per cent, low investment cost of $ 1.1 million per MW installed, capacity factor above 85 per cent, and secured Power Purchase Agreements (PPAs) with the Company’s shareholders for some 35 per cent of power sales, the project fell short of IIC’s investment criteria. ICC requires over 50 per cent of sales to be under firm PPA contracts and assigned to the repayment of the loan’s debt service in order to mitigate credit (i. e. delivery) risks.

The project’s eligibility to the Clean Development Mechanism (CDM) allowed the project sponsors to generate emission reductions along with electricity. The equity IRR increased by 0.7 per cent only with the inclusion of the emission reductions in the project’s cash flow. However, the proportion of project revenues under contract reached the threshold defined by the lender, thus meeting the IIC’s minimum off-take requirement.

Based on the high creditworthiness of the off-taker (World Bank), the IIC agreed to consider the proceeds of the sales of emission reductions in its investment analysis, allowing the borrower to comply with the above-mentioned covenant. According to the IIC, this played a role in securing an IIC loan and reduced the average time spent by private project developers in Ecuador to reach financial closure from the expected 5 years to less than 2 years.

Equally importantly, the financial engineering of the Emission Reduction Purchase Agreement was structured in the same way as the previous cases, so that the proceeds accrued directly to a debt reserve account in favour of IIC, thus eliminating the Ecuadorian sovereign risk. The lender’s recognition of the additional benefits from this financial engineering in the loan’s risk matrix was directly reflected in the loan’s reduction in the interest rates by 100 base points (i. e. 1 per cent) to the borrower immediately after the ERPA signature with the NCDMF. This reduction may be translated into a cumulative economy of over US$ 300000 in interest payments. These factors enabled IIC to extend a $ 7m, 8-year loan to Hidrobanico, facilitating financial closure for the private project.

13.2. CONCLUSIONS

In some projects in the PCF portfolio, the emission reductions are the sole source of reliable income for sponsors. It is, therefore, essential that lenders understand the value of emission reductions. This may be the trigger that will secure financing for some projects and make them viable. Special attention should be paid to the ERPA structure as explained in the text. The ERPA may and can significantly mitigate specific risks of the project, materially improving its bankability.

We looked at three different cases where carbon finance played different roles. Nevertheless, in all the three projects presented, carbon finance was of fundamental importance for the project’s implementation.

• In the Plantar deal, the financial engineering in the ERPA and the anticipated revenue streams from carbon finance in the project allowed the monetization of the ERPA receivables and loan approval by a commercial bank.

• In the NovaGerar deal, the creditworthiness of the carbon credits buyer (i. e. the World Bank) allowed the project sponsors to become attractive to an international energy solution’s provider, who agreed to use the carbon credits as payment for the supplier’s credit offered to the project.

• In the Abanico deal, the revenue streams from carbon finance, although not relevant in terms of incremental IRR, allowed the project sponsors to reach the lender’s covenant of threshold for the project’s off-take contracts, resulting in the loan’s approval by the lender.

In summary, the experience of these projects indicates that the qualitative value of the emission reductions in most CDM projects can exceed their quantitative value (i. e. their nominal price) as the benefits of the emission reductions and ERPAs are maximized.

Sugarcane is planted in Brazil mainly for sugar and ethanol production. To meet the requirements of production, the cane is cultivated utilizing the so-called ratoon system in which the first cut is made 18 months after plantation, followed by annual cuts along a period of 4 or 5 years, with decreasing yields. The Brazilian warm climate with rainy summers and clear skies in the winter help the cane to build a strong fiber structure during its growth phase and fix sugar in the winter.

The development of sugarcane crops in Brazil has benefited from constant research in the development of new varieties, particularly by the Agronomic Institute of Campinas (IAC), Cooperative of the Sugar and Ethanol Producers of the State of Sao Paulo (Copersucar) and the National Plan for Sugarcane (Planalsucar), a division of the Sugar and Alcohol Institute (IAA). In the last 30 years, however, the entire agricultural research apparatus of Sao Paulo, including research stations, were submitted to constant dismantling, which slowed down productivity improvements in sugarcane production at a time when oil prices were falling. This made ethanol less competitive. Meanwhile, the Federal Government pursued policies to eliminate state intervention in the sugar business, extinguishing the IAA and the Planalsucar, among other organizations.

Some of the earlier research responsibilities have been taken over by private organi­zations. Copersucar, for example, shifted the emphasis of its program to develop new varieties mainly through CTC, a technology center in Piracicaba, Sao Paulo. Another constant preoccupation in research has been related to extending the crushing season by developing early ripening, and increasing the yield by combating pests. The sugarcane breeding program has also incorporated modern techniques in molecular biology. Genetic transformation of sugarcane varieties has been achieved in the CTC laboratories and various transgenic sugarcane varieties are being presently field-tested.

Another major technological change observed in the sugarcane agriculture in the last 40 years is related to the introduction of machinery in soil preparation and conservation, particularly in the Southern states of Brazil. Some intensification of machinery use has been observed in the last two decades in various operations, from soil tillage to harvesting and, particularly, in cane loading. Less significant advance­ments were verified in planting the cane. All the cane is still being manually planted, although a cane-planting machine has been recently developed by Copersucar and licensed to DMB. Sermag and Brastoft are also offering planting machines in the market.

Despite the progress achieved in cane production so far, harvesting remains the least advanced operation. Cane fields are now systematically burned to allow manual harvesting. However, this is changing rapidly. Environmental pressures, legislation enforcement and cost reduction are pushing for mechanical harvesting of unburned cane (Furlani et al., 1996). In addition, the potential to generate revenues from cane residues is likely to provide incentives in this direction once the producers start evaluating other revenue options in their total production chain.

Development in cane harvesting and their potential to reduce agriculture costs will be discussed later in this chapter. Other possibilities for cost reduction are rela­ted to optimization in agricultural management, including introduction of operation research techniques and precision agriculture, which will allow a more rational use of resources and increase of yields. For example, the concept of environments of production combines soil charts with climatic and variety data and brings returns around US$ 40/ha according to tests conducted in some sugar factories.

Information software provides the basis for significant improvements in agricul­ture too. Software based on GIS (geographical information system) with embodied electronics together with productivity data can indicate the effect of productivity related variables such as soil fertility, pests, diseases, insects, weeds, soil compaction, and harvesting methods. This may serve as the basis for better management of crops and improved productivity. Software to improve logistics are also being developed, helping to improve the allocation of loaders, harvesters or trucks to optimize raw material flows to the factory. Logistic optimization in cutting and transporting cane has already brought reductions of 5 to 13 per cent in the agricultural cost of cane (data based on Copersucar mills in Sao Paulo, close to 25 per cent of Brazilian production in 1999).

Plantation establishment cost in barren land tends to be very high due to bad soil conditions. Therefore, only sparsely used cropland, scrubland and grassland can be used for energy plantations in Sri Lanka. Land at high altitudes with steep terrain needs to be excluded due to complexities in plantation management. This limits the available land potential to the districts of Anuradhapura, Polonnaruwa, Ampara, Badulla and Monaragala. Also, it is recorded that almost all sparsely used cropland are on chena cultivation, providing basic food and other requirements to many rural families. Therfore, in effect, the actual national potential of land available for energy plantations is limited.

Energy questions are receiving significant amount of attention in the Baltic States, particularly energy conservation and the use of renewables aimed at increasing

Note: Both alternatives include handling of the industrial assortment; the forest fuel is extracted, chipped at roadside and transported 15 km to a heating plant.

R=using manual tools;

M = using motor chain saw with felling handle. l€ = 3.45Lt

Source: Andersson and Budrys (2002) security of supply. In fact, energy intensity in Lithuania is three times higher than the EU average and a potential for more than 30 per cent increased efficiency has been identified. Most of this potential improvement exists in the household sector. (Klevas and Antinucci, 2004).

In Lithuania, most sources of financing for renewables are focused on tax reduc­tions and guarantees for energy saving investments (BASREC and Nordic Council of Ministers, 2002). As candidate member to the EU, Lithuania was entitled to receiving financial support from Structural Funds, together with Latvia and Estonia. The Lithuanian Energy Institute participated in a project to promote energy efficiency and renewables in the preaccession phase (Klevas and Antinucci, 2004). Lithuania is now a full member of the EU and has adopted the EU directive on renewables. Lithuania’s targets include 7 per cent renewables by 2010 and the decommission of its nuclear power plant. Regional programs, for example to develop bioenergy options may provide an important complement to top down energy strategic plans, while also attracting other financial sources through bilateral or multilateral cooperation.

More specifically, the Baltic Sea Region Energy Co-operation, BASREC, created within the EU in 1999, addresses energy issues in the Baltic. The Nordic Council of Ministers and BASREC developed the Bio2002Energy project with the purpose to gather overall information of bioenergy prospects in the Baltic Sea Region (BASREC and Nordic Council of Ministers, 2002). Some of the major overall conclusions include:

• Bioenergy still need financial support to be viable due to high investment requirements;

• Joint implementation, in the modes defined under the Kyoto Protocol, will serve as a major drive for bioenergy projects in the region in the coming years;

• Harmonization of energy and environmental taxes should be pursued to provide good competitive ground for bioenergy-related companies;

• The development of energy crops should be promoted based on regional know­how and experience and in face of new options to the agricultural sector;

• Coordination of actors in various sectors such as environment, agriculture, forestry and energy is needed to minimize costs of fuel procurement, utilize resources more efficiently and guarantee the sustainability of ecosystems.

When it comes to promoting renewable energy technologies in the EU, member states have applied different strategies to reach their targets and, though some instruments have proved more successful than others, none of them can be said to be particularly superior (Reiche and Bechberger, 2003). Thus integration into the EU does not bring automatic answers when it comes to renewable energy strategies, bioenergy included. There are plenty of experiences in neighboring countries to serve as starting points, but there is still need for a national policy focused on the particular potential and conditions of the country.

The project described here has helped to indicate the existing potential for bio­fuel production in Lithuanian forests, and to point management practices that can contribute to harvesting biofuels efficiently. There is no doubt that the country can count on a large biomass supply, which offers a great resource base for bioenergy options. Targeted incentives and a strong institutional framework are now needed to guarantee a stable development of the demand side. Only then can the country’s potential be fully realized and bioenergy systems mature on a sustainable basis.

The increasing utilization of biomass in district-heating systems has contributed to creating a continuous and more concentrated demand for biofuels while also helping demonstrate applications and various benefits of bioenergy. However, we should keep in mind that, even at the European level, the future of district heating systems and their role in liberalized markets vis a vis gas networks, for example, are not regulated, and none of the EU directives consider district heating systems in particular (Grohnheit and Mortensen, 2003).

One strong motivation for support of bioenergy from the political side is obviously the fact that the use of biofuels creates employment for farmers, forest workers and entrepreneurs in plant operations. In fact, the importance of these activities for rural development and living conditions in the countryside should not be underestimated. Employment is also created in the equipment manufactur­ing industry. For a country that is strongly dependent on energy imports such as Lithuania, bioenergy offers a great opportunity to improve energy supply security based on national resources. In addition, the harvesting of forest fuels can be a driv­ing force for improved forest management, and thus enhancement of the economy of forest industries. For example, biofuel demand will favor various industrial assortments to the extent that many stands that are normally not managed today will be so thanks to the possibility of extracting forest fuels.

Energy development authorities at national and regional levels in Lithuania still lack the necessary information and knowledge to outline a strategy for woodfuel procurement. The methods applied at municipal level to evaluate the energy poten­tial derived from forests vary significantly and can sometimes be contradictory. Cooperation and coordination of efforts between forest and energy sectors are necessary to ensure the development of a strategy and the integration of forest fuel handling into common forestry practices.

Semida Silveira

12.1. THE CHALLENGE OF MITIGATING CLIMATE CHANGE

The climate change problem results from the concentration of greenhouse gases in the atmosphere, mainly an effect of industrial development and fossil fuel utili­zation over the last two centuries. The initial milestones in addressing climate change were the signature of the Climate Convention (UNFCCC) in 1992, and the nego­tiation of the Kyoto Protocol in 1997. The overarching objective of the Climate Convention is the stabilization of greenhouse gas emissions at levels that can prevent dangerous human interference with the climate system (UNFCCC, 1992). The Kyoto Protocol defines steps in the implementation of the Climate Convention (Kyoto Protocol, 1997). Besides defining the emissions reduction target of 5 per cent compared with 1990 levels, the Kyoto Protocol sets the institutional basis for the formation of greenhouse gas markets, and creates mechanisms for the full parti­cipation of all parties to the Convention and the Protocol in the implementation of agreed objectives.

Today, many governments consider the mitigation of climate change the most difficult challenge of the next few decades. One of the underlying difficulties is the broad nature of the problem which refers not only to the globality of the natural phenomena that affects climate on earth, but also to the implications that climate change mitigation and adaptation may have on the international economy and development in general. Another difficulty is that the issue of environmental sus­tainability, climate change included, requires the scrutiny of development strategies, technologies, consumption behavior, life styles, and even the institutions that have served as the basis to build modern society. Thus the climate change problem requires global solutions, and efforts from all nations.

Measures to mitigate climate change touch the basis of economic development, as mitigation measures are likely to have impact on the way major sectors such as energy, transportation, agriculture and forestry operate and are further developed. It is difficult to calculate with precision the overall costs of mitigating climate change, although many efforts have been made in this direction. Initially, mitigation measures were perceived as very costly and extremely risky for the global economy

169 Bioenergy — Realizing the Potential

© 2005 Dr Semida Silveira Published by Elsevier Ltd. All rights reserved.

due to the number of interventions and coordination of efforts necessary. This made many corporations, governments and specialists extremely negative about the whole issue. However, after a decade of debates and initial attempts to implement mitigation measures, a consensus has evolved around the need to incorporate climate change issues into public and private development strategies.

This general consensus has served not least to engage the private sector into the climate change debate in a fruitful way. Yet, many efforts are still needed to make a quantitative change in the current scenario of greenhouse gas emissions. In a world of unequal development, a major challenge is to find a fair way of distributing the burden of measures among nations. How to shift the development path so as to achieve a scenario of emissions stabilization without constraining the development of poor nations? The projected growth of developing countries implies significant increases in greenhouse gas emissions which will have to be partly mitigated through the choice of low-emissions technology systems and partly compensated with reduced emissions in industrialized nations. How to accomplish that?

In an initial effort, the Kyoto Protocol attempts to create an institutional plat­form for cooperation among nations in measures to mitigate climate change. Three mechanisms, the so-called flexible mechanisms, are created: emissions trading (ET), joint implementation (JI), and clean development mechanism (CDM). The operation of these three mechanisms aims at reducing mitigation costs and accelerating the pace of emissions reduction. Emissions trading allows for carbon credits to be traded among companies and countries to facilitate meeting emissions reduction targets. Joint implementation provides the basis for industrialized countries and economies in transition to collaborate in achieving targets jointly. Finally, the CDM provides the opportunity for developing countries to participate in projects to reduce actual or expected greenhouse gas emissions.

The work on flexible mechanisms has engaged many academics and specialists intensively, and the literature on the subject is already vast. We make no attempts to review all the issues involved in the climate change debate, or to analyze possible outcomes of the flexible mechanisms. This chapter provides only a brief introduction to the context of the global climate change agenda and to CDM in particular. Together with Chapter 13, we hope that it will help readers appreciate the examples of CDM projects provided in Chapters 14, 15 and 16. The latter are pioneer projects developed in Brazil and Ghana which give an idea of how CDM can contribute to promote bioenergy in developing countries.

Case C was defined considering a natural gas combined cycle plant based on two PG6101(FA) units, one unfired HRSG for each gas turbine and just one steam turbine. The total capacity of the NG-CC is 187.2 MW, with an additional contri­bution of 53.2 MW from biomass. Thus, the total plant capacity is 240.4 MW. The steam cycle parameters and the overall cycle performance are the same as presented in Table 9.2. The biomass contribution to the cofiring plant occurs in a conventional steam power cycle in which steam is generated at the same live-steam parameters as in the HRSGs, producing 53.2 MW as well. Main simulation results are presented in Table 9.4.

The feasibility assessment was accomplished based on the assumptions described earlier for a NG-CC power plant. The initial capital cost for a 185 MW class was estimated as 480US$/kW. For the steam cycle plant based on biomass, the unit capital cost is estimated at 1110 US$/kW. This evaluation is based on cost functions for the main plant components and results were checked with published data. Annual operation and maintenance costs (excluding fuel) were considered as equi­valent to 5 per cent of the initial capital cost.

The main results of the feasibility analysis are presented in Table 9.5. The addition of a biomass module represents an increase in the plant capacity of about 28 per cent vis-a-vis the natural gas combined cycle plant. As the cost of producing electricity

through the biomass plant running all over the year (capacity factor 0.85, as well as for the NG-CC) is higher than the cost estimated for electricity produced in the NG-CC plant (40.0 x 33.5 US$/MWh), there is a rise in the cost of electricity produced by the cofired plant.

For full-year operation of the biomass-based power plant, the IDR is significantly reduced vis-a-vis the NG-CC case. The investment would be more feasible if carbon credits were available but these should be as high as 40 $/t C02 to make the cost of electricity of the cofired plant equivalent to the NG-CC.

However, if the biomass-based power plant operates for a shorter period during the year (e. g. just during the 6-7 months of the sugarcane harvest season), the final cost of electricity rises. For instance, for 4080 h of operation per year (200 days of harvesting and a capacity factor of 0.85 during this period), the cost of electricity produced by the biomass power plant rises to 61.4US$/MWh and the cost of electricity of the cofired unit increases to 37.7 US$/MWh. Simplifying the analysis, it was considered that the average biomass cost is 8 US$/t in both cases. The IDR is estimated as 19.9, 20.6 and 21.4 per cent for the three cases considered (depending on the value of the carbon credits).

The Case C was also evaluated considering a capital cost for the steam cycle plant based on biomass at 500 US$/kW. This is a reasonable estimate for equipment built in Brazil as the cost in US dollars has dropped significantly due to the devaluation of Brazilian currency since early 1999. As can be seen in Table 9.5, in this case, the cost of electricity generated in the cofired unit could be lower than in the natural gas combined cycle unit, even without carbon credits.

Marco Antonio Fujihara, Luiz Carlos Goulart and Geraldo Moura

14.1. THE PLANTAR PROJECT

The Plantar project has been designed according to the CDM rules agreed upon under the Kyoto Protocol. It is based on fuel switching in the iron industry, that is, avoids the use of coal coke in the production of pig iron by using sustainable charcoal instead. Greenhouse gas (GHG) emission reductions are achieved through afforestation and reforestation, charcoal production, and in the industrial process for pig iron production.

The project was started in 2001 and includes the establishment of 23 100 ha of high yielding Eucalyptus varieties to produce wood for charcoal, which will displace coke in the pig iron production. In addition, emissions reductions will be accom­plished through the reduction of methane emissions in the charcoal production and regeneration of cerrado[17] native vegetation in 478 ha of pasture land. The total reductions expected along the project life are specified in Table 14.4.

The project is located in the Southeast of Brazil, State of Minas Gerais, in the municipalities of Sete Lagoas, Curvelo and Felixlandia. It evolves during twenty-eight years, in accordance with the 7-year Eucalyptus forest-growing cycle in the region. Beyond the climate change mitigation benefits, the project promotes the use of renewable resources and sustainable socio-economic development in the rural areas of Minas Gerais. The Plantar project follows the requirements for CDM projects and has been recently approved by the Prototype Carbon Fund at the World Bank.

At present, there is no single mechanical harvesting system available to handle the wide range of field conditions prevailing all over the world. Field conditions can vary from hilly land and presence of rocks to dry or wet soils requiring planting either at the bottom of the furrow or at the top of the ridge. Cane yield can vary from 60 to over 200 t/ha, the stalks being erect or recumbent with length in the range of 2 to 5 meters. Since the Brazilian landscape is hilly, planting and harvesting methods are different from those used in flat regions.

The Australian chopped cane principle and Louisiana’s whole cane system are the two main harvesting technologies available in the world today. Other cane producers that are performing mechanical harvesting use derivations of these systems. Cuba, for example, utilizes KTP cane harvesters, which have a design based on the Australian technology principle (Gomez Ruiz, 1992).

The development of Australian technology was motivated by lack of labor for cane harvesting. Prototypes designed by farmers in the 1960s introduced chopping as a way to mechanically transfer the harvested product by free fall to the transport vehicle running side by side with the harvester. Chopping eliminates the whole cane loading operation. However, the cost of an adequately managed whole cane har­vesting system can be inferior to that of a chopped one if cane losses and harvester idle time are accounted for in the cost analysis (Braunbeck and Nunez, 1986).

Louisiana’s soldair is economically the most efficient mechanical harvesting system for whole cane available at present (Richard et al., 1995). This harvesting system was developed for erect cane, which usually have short growing periods of about 7 months. As a result, it is not satisfactory to cut and feed the Brazilian cane crops, mainly the first cut, since the cane can easily fall at the harvesting period.

In the US, four different sugarcane regions utilize different harvesting prac­tices. In Texas, the chopped cane system is used (Rozeff, 1980). In Hawaii, a locally adapted push-rake system is used which combines higher harvesting costs and lower cane quality. In Florida, the various systems described so far are found, that is, chopped cane, whole cane and manual cut.

In Colombia, where the government has set the year 2005 as the deadline to eliminate preharvest burning, work is underway to develop a harvester for collecting and chopping cane and cane residues. A major challenge in the development of the machine is to reach the high yields that characterize Colombia’s Valle del Cauca sugarcane producing region (Ripoli et al., 1992).

Changing from burning to a full green cane harvesting practice requires com­prehensive planning at various levels. The mechanical systems mentioned earlier are not optimally suited for Brazilian green cane either from the standpoint of harvesting costs, or from the point of view of the cane quality or losses incurred in harvesting. Technical adaptations are required to meet topographic, agronomic and sugarcane processing needs typical to the Brazilian context. Low-cost appropriated technology is still required to overcome not only cane harvesting difficulties but also trash recovery, baling and transportation. The full implementation of these technological shifts will only be possible if an innovative generation of engineers is able to eliminate the bottlenecks prevailing from cane mechanization to trash recovery and utilization.

An array of species, that are well suited to the conditions of available lands, can be successfully used for fuelwood production. Even under low input/low output system of management, these species are capable of producing at least 10 dry tons of fuel wood per hectare per year. With the intensive plantation management, which is often associated with short rotation energy plantations, there is room for considerable improvement in the level of fuelwood production.