EDUARDO MALLMAN

Brazil,

Eduardo Mallman is creating the capacity to produce social bioethanol through micro-biorefineries managed by groups of smallholders. Eduardo is thus increasing the energy independence of family farmers, combating the tendency toward mono-cropping associated with most efforts to produce biofuel and generating new sources of income for smallholders and cooperatives.

This profile below was prepared when Eduardo Mallman was elected to the Ashoka Fellowship in 2010.

INTRODUCTION

Eduardo Mallman is creating the capacity to produce social bioethanol through micro-biorefineries managed by groups of smallholders. Eduardo is thus increasing the energy independence of family farmers, combating the tendency toward mono-cropping associated with most efforts to produce biofuel and generating new sources of income for smallholders and cooperatives.




THE NEW IDEA

Eduardo is facilitating the entry of smallholder families in Brazil’s booming green energy market by way of micro-biorefineries. He has developed a compact technology that produces social bio-ethanol through the use of sweet sorghum, sweet potatoes, and cassava, among other crops. Before introducing this technology and methodology to the market, there existed nearly no opportunities for small farmers to reap the benefits of this emerging economy since biorefineries are extremely expensive and have typically been designed to respond to the needs of a few large-scale producers.

Eduardo’s Usinas Sociais Inteligentes (USI—Intelligent Social Factories) occupy very little space (100 m¬¬¬¬2) and are much more affordable than other technologies. They have been designed to foment the economic development and energy independence of rural communities in an environmentally sustainable manner. The alcohol is not only produced with several ingredients that are generally thrown out, but its by-products are also transformed into food, animal feed or fertilizer in order to further reduce waste and increase economic outputs. In addition, Eduardo is combating the tendency toward monocultures by deliberately using crops that necessitate agronomic rotation.

Through the use of USIs, smallholders are now able to produce between 400 and 2,000 liters of renewable biofuel per day, at a cost of R$ 0.30/L (US$0.17/L)—where the average market cost for bioethanol in Brazil amounts to R$1.70/L (US$0.96/L). This quantity is sufficient to respond to the energy needs of a small farm and generate a small surplus. Eduardo’s vision is to facilitate the creation of groups of about 30 smallholders to increase their capacity to produce bio-ethanol at a marketable scale. Several micro-biofuel projects are already under way in the south of Brazil. The government of Rio Grande do Sul has purchased 120 micro-biorefineries to be used by 3,000 families, thus generating 12,000 new jobs. Eduardo is now looking to expand the model to Sergipe and other North-Eastern Brazilian states where there is a much larger number of low-income rural families and where the need is greater. Cognizant of the fact that USIs also have important and promising application for Africa and South Asia, Eduardo is establishing strong links with international organizations such as the World Bank and the European Commission.




THE PROBLEM

Recognizing the global need for clean, affordable and alternative fuel sources, as well as the economic opportunity they represent, Brazil has become the world’s second largest ethanol producer and the world’s first exporter. Although the country is praised internationally for its advances in the production of bio-fuels, most of these efforts also have a series of accompanying negative consequences.

For instance, small farmers have largely been left out of the bio-fuel industry thus far. Although the main objective of the National Program for Production and Use of Biodiesel (PNPB) was to transform smallholders into Brazil’s leading energy producers, a recent study revealed that of the 200,000 families targeted initially, only 36,700 families were included in the program. As a result, the enormous job creation and economic growth potential of this promising industry is not trickling down to those who most need it. This is due in part to the fact that most of the bio-fuel technology on the market has been developed for large producers and is therefore unaffordable and inappropriate for smallholders. Parenthetically, much of these families’ income is eaten up by their farm’s high-energy needs. This problem could be significantly addressed were a larger number of small farmers able to produce their own fuel. Not only would it help them diversify their agricultural outputs, it would also create new sources of income for their families.

Brazil’s largest energy producers thus continue to be the ones reaping the fruits of this booming industry. The production of energy is concentrated in the hands of very few large industries and the only entity allowed to commercialize fuel in Brazil remains Petrobras. With little regard for the ecosystems and populations that surround their immense properties, many of these corporations are deforesting large natural areas to make way for monocultures—of sugarcane or soy, for example—which cause alarming rates of soil erosion losses. The best plots of land are now reserved for crops used for biofuel at the expense of food crops, thus influencing both the availability and cost of foodstuff. In addition, although the big energy producers are often praised for introducing bio-fuels to the market, little attention is paid to the significant amount of energy wasted and trash produced as a result of this process. This situation is mirrored several times over in parts of Latin America, Asia and sub-Saharan Africa.




THE STRATEGY

Eduardo created Usinas Sociais Inteligentes Biorefinarias—a name referring both to the organization and the technology—in order to include smallholders in the emerging bio-fuel market. The micro-biorefinery model emerged as a result of elaborate research projects and viability studies, which sought to bring the price of bio-fuel production down while diversifying the agricultural outputs of family farmers and increasing their energy independence. It uses renewable crops such as sweet sorghum, sweet potatoes, sugar cane and cassava to produce high-quality bio-ethanol. It is the only biofuel produced through micro-refineries to have been officially certified by the National Agency of Petroleum.
 
Recognizing the need to adapt biofuel technologies to the needs and circumstances of small farmers, Eduardo developed a machine that is small, compact and easy to maintain and can produce up to 2,000 liters of bioethanol per day at a cost nearly six times lower than the market cost. In order to decrease the consumption of heat and energy typically required to produce bioethanol and to accelerate the process overall, the USIs use an enzyme that facilitates both the hydrolysis and saccharification processes. The bioethanol can be used as fuel for energy generators, kitchen appliances and motor vehicles, among others.

The capital investment required to purchase an USI ranges between R$140,000 and R$200,000 (US$80,000 and US$114,000). In order to make the technology accessible to his target audience—smallholders—Eduardo has established a partnership with the BNDES, Brazil’s National Social and Economic Development Bank. Through its family agriculture program (Pronaf-Eco) smallholders who want to purchase the USI as individuals, cooperatives or citizen organizations (COs) have guaranteed access to 12-year loans at a 1 percent interest rate. Eduardo and his team work closely with each family or cooperative to inform them about the financing plan and to teach them about the benefits of the technology and how to use it.
“Social bioethanol,” as termed by Eduardo, serves the dual function of increasing smallholders’ socioeconomic well-being while limiting environmental damage.

At the socioeconomic level, smallholders now have the opportunity to increase their energy independence and to diversify their agricultural outputs. Not only do the USIs allow them to reduce their monthly fuel expenditures by a factor of six and thus raise their quality of life, they are also contributing to the local economy through job creation. In addition, every crop used in the production of bioethanol serves multiple purposes. In the case of sweet sorghum, for example, the seeds are used to produce sorghum milk and flour for human consumption; ethanol is produced with sorghum syrup; and the waste serves as animal feed. Eduardo has thus found a way to reconcile what are often competing interests between producing food, feed or fuel while diversifying smallholders’ production.

This last example also highlights one obvious environmental benefit related to the production of social bioethanol: The reduction of waste. Eduardo is replicating this experience with cassava flour producers in Sergipe, northeastern Brazil. Each cassava flour factory produces 1,000 liters per day of manipuera—a poisonous liquid that is generally discarded into the earth thus causing alarming rates of groundwater pollution. Yet, this same liquid is rich in starch and can be used as a raw ingredient in the fermentation process. Consequently, Eduardo and his team have transformed poisonous waste into an alternative source of energy that has a higher profit margin than cassava flour.

One of social bioethanol’s most important environmental contributions is that it can be produced from a diversity of crops. Unlike sugarcane, which requires a year to grow and large amounts of irrigation water, sweet sorghum has a 125-day production cycle, and needs about one-third the amount of water used by sugarcane crops. Sweet sorghum has been called a “camel among crops,” owing to its wide adaptability, its marked resistance to drought and saline-alkaline soils, and tolerance to high temperatures.

In Rio Grande do Sul and Santa Catarina, Eduardo has worked closely with small farmer’s cooperatives associated with important social movements, such as the Movement of People Threatened by Dams and the Movement of Small Farmers (MPA), which were the first to purchase and use the USIs. He has found that working with cooperatives of 28 to 30 small farms facilitates both the financing and viability of social bioethanol production, since many smallholders own 15 to 20 hectares of land. The income generated by these families increased significantly as a result of this initiative. Most recently, the government of Rio Grande do Sul bought 120 micro-refineries that will be used by 3,000 families thus creating 12,000 new jobs.

This is a model Eduardo is beginning to replicate in northeastern Brazil, where rural communities are more impoverished and where he believes the impact can be greater. In addition, Eduardo is establishing partnerships with the World Bank and the European Commission to bring the social bioethanol model to Kenya, Nigeria, and Ethiopia. In 2010, he will also be installing the first USI in Uruguay as a result of collaboration with a local fuel agency.




THE PERSON

Eduardo grew up in a family that pushed him, from a young age, to think ahead of the curve. His grandfather was one of the first Brazilian medical doctors to get a doctorate degree in France in 1927. At the age of 47 he decided to dedicate himself to preventative medicine, a specialization that was unheard of at the time. He was also a rural entrepreneur who introduced irrigated rice farming to the state of Rio Grande do Sul and opened the first private school to be accessible to the children of domestic workers. Eduardo lost his father, a civil engineer and humanist, when he was 10-years-old. Both his parents instilled in him a sense of social responsibility and entrepreneurship. As a child, Eduardo began participating in his family’s business activities.

Following in his father’s footstep, Eduardo graduated in 1982 as a civil engineer from the Federal University of Rio Grande do Sul, committed to finding new solutions for the rural communities he had grown up with. In 2003, he developed a pioneering rural development project in small communities in Venezuela. A few years later, he created a school associated with Comitê de Democractização da Internet, Ashoka Fellow Rodrigo Baggio’s organization, to promote digital inclusion.

Eduardo’s inflection point, however, came in 2007 when he met Harry Stokes, Director of the Gaia Project. After learning about the way the quality of life of Ethiopian refugees had dramatically increased as a result of the conscientious introduction of renewable energy technologies, Eduardo was convinced that this was the path he had to follow. That is when he created the concept of social bioethanol and the micro-biorefinery model.




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