5.1 Biofuels in Brazil: How and Why
93
Fig. 5.1 Sugarcane-ethanol production and consumption chain in Brazil
by the minister of science and technology at the time.
4 Finally, Petrobras, too, started
to make substantial investments in the sector and became a significant shareholder
(see Gomes et al. 2010a), even though its participation would be forgone later in the
decade due to political changes in Brazil.
Despite all the interest from large conglomerates, however, there is a clear perception that new investments in sugarcane-ethanol have fallen short of demand since
2010 (Jank 2011; REN21 2013; EPE 2019b). The 2010s saw a marked downturn
in Brazilian ethanol production, with occasionally high international sugar prices
also attracting producers to this other downstream market (EPE 2020). For instance,
annual investments in sugarcane-ethanol decreased from 7.4 billion Brazilian reais
(BRL) in 2011 (then about USD 4.5 billion) to one-quarter of it, BRL 1.8 billion
in 2018 (USD 550 million at the time) (EPE 2019b). Since 2011, Brazil has had to
import corn-ethanol from the US to meet its demand (Jank 2011). A once-thriving
sector thus struggled under Brazil’s economic hardship of the mid and late 2010s.
Projections are of recovery of stability and gradual—if modest—growth through the
2020s (EPE 2020).
5.1.2.2 Biodiesel
Brazil’s biodiesel production uses different feedstocks and often mixes them to
achieve specific physicochemical parameters. Soybean oil (70% of the supply) and
beef tallow (15%) are the leading feedstocks. The remainder of biodiesel uses other
animal fats (e.g., pork fat) or plant sources such as cottonseed, castor bean and,
increasingly, palm oil, which some expect to play a more significant role in the
future (EPE 2019b, 2020). While the soy, cotton, and meat sectors are large industrial
complexes, castor and palm oil chains tend to integrate smallholders, who biodiesel
industries generally contract as feedstock suppliers.
4 The minister of science and technology expressed his disappointment at the Brazilian private group,
which had received large public funding over the years, for selling “those jewels so important to
the country” to foreign groups (Escobar 2008).
93
Fig. 5.1 Sugarcane-ethanol production and consumption chain in Brazil
by the minister of science and technology at the time.
4 Finally, Petrobras, too, started
to make substantial investments in the sector and became a significant shareholder
(see Gomes et al. 2010a), even though its participation would be forgone later in the
decade due to political changes in Brazil.
Despite all the interest from large conglomerates, however, there is a clear perception that new investments in sugarcane-ethanol have fallen short of demand since
2010 (Jank 2011; REN21 2013; EPE 2019b). The 2010s saw a marked downturn
in Brazilian ethanol production, with occasionally high international sugar prices
also attracting producers to this other downstream market (EPE 2020). For instance,
annual investments in sugarcane-ethanol decreased from 7.4 billion Brazilian reais
(BRL) in 2011 (then about USD 4.5 billion) to one-quarter of it, BRL 1.8 billion
in 2018 (USD 550 million at the time) (EPE 2019b). Since 2011, Brazil has had to
import corn-ethanol from the US to meet its demand (Jank 2011). A once-thriving
sector thus struggled under Brazil’s economic hardship of the mid and late 2010s.
Projections are of recovery of stability and gradual—if modest—growth through the
2020s (EPE 2020).
5.1.2.2 Biodiesel
Brazil’s biodiesel production uses different feedstocks and often mixes them to
achieve specific physicochemical parameters. Soybean oil (70% of the supply) and
beef tallow (15%) are the leading feedstocks. The remainder of biodiesel uses other
animal fats (e.g., pork fat) or plant sources such as cottonseed, castor bean and,
increasingly, palm oil, which some expect to play a more significant role in the
future (EPE 2019b, 2020). While the soy, cotton, and meat sectors are large industrial
complexes, castor and palm oil chains tend to integrate smallholders, who biodiesel
industries generally contract as feedstock suppliers.
4 The minister of science and technology expressed his disappointment at the Brazilian private group,
which had received large public funding over the years, for selling “those jewels so important to
the country” to foreign groups (Escobar 2008).