98
5 Brazil Between Bioeconomy Barons and Grassroots Agroecology
An economic recession (2015–2016) significantly slowed Brazil’s ethanol
prospects, but policies would experience a come-back in 2017 with a National
Biofuels Policy.
9 This time, the emphasis has been on systematically using biofuels
to meet the country’s international climate commitments. Brazil’s increasingly
neoliberal administrations—first the business-oriented Temer, followed by far-right
Bolsonaro—consolidated a radical political U-turn, away from the Workers’ Party
governments (2003–2016). Yet, the country has maintained its commitment to the
Paris Agreement. The RenovaBio program, instituted as a National Biofuels Policy,
has adopted 2025 and 2030 fuel emissions reduction targets, has created a grading
system to certify biofuel producers according to their emissions reductions, and set
up a market for Certificates of Decarbonization by Biofuels (CBIO). The program
should operate initially from 2020 through to 2030, with the expectation of renewal
after that (MME 2018). Table 5.3 summarizes the key policies from this current,
sustainability-oriented phase of ethanol promotion in Brazil.
In contrast to ethanol, biodiesel in Brazil is a far newer commercial sector, and
it has a much leaner policy. Its framework was laid out in the National Program
on Biodiesel Production and Use (Programa Nacional de Produção e Uso do
Biodiesel—PNPB), launched in 2004. PNPB introduced a sequence of biodiesel
blending mandates: 2% blending (B2) came into force in 2008; B3 was initially
foreseen for 2010 but anticipated to July 2008 thanks to industry readiness; and the
same happened to B5, pulled from 2013 to 2010 (Law 11.097/2005). These blending
mandates continue to be the core of Brazil’s biodiesel policy. Later increases have
been steadily implemented, with B12 coming into force in 2020 and an expectation
of B15 by 2023. Besides, the government has offered credit and fiscal incentives
to biodiesel producers. Finally, PNPB established that biodiesel sales to distributors
would take place exclusively through state-regulated auctions (Law 11.116/2005).
By early 2020, more than 70 such auctions had taken place, trading a continuously
growing amount of fuel.
A key element of PNPB has been its social orientation. The policy determines
that biodiesel industries that source feedstock from smallholder “family agriculture”
(which has a legal definition in Brazil
10 ) receive a social fuel seal, which grants additional credit, fiscal advantages, and priority in 80% of the auctioned sales.
11 Due to the
initially problematic integration of smallholders, the program was reformed in 2009
and subsequently amended in 2011 and 2012 to add further requirements and specifications. The policy started requiring that biodiesel industries provide smallholders
with technical assistance and that supply contracts be validated by a representative
labor union or social movement to safeguard smallholders’ interests (MDA 2009).
This change coincided with the creation of Petrobras Biofuels—then presided by the
9 Law 13.576/2017.
10 Law 11.326 of 24th July 2006 defines family farmers as those who run the farm with and use
primarily labor from his/her own family, whose income derives mainly from farming, and who owns
not more than four fiscal modules—an area measure which varies depending on the region of the
country, from 20 ha in more developed to 400 ha in remote regions.
11 The requirement is that at least 30% of the company’s total expenditures on feedstock sourcing
must be directed to smallholders (MDA 2009).
5 Brazil Between Bioeconomy Barons and Grassroots Agroecology
An economic recession (2015–2016) significantly slowed Brazil’s ethanol
prospects, but policies would experience a come-back in 2017 with a National
Biofuels Policy.
9 This time, the emphasis has been on systematically using biofuels
to meet the country’s international climate commitments. Brazil’s increasingly
neoliberal administrations—first the business-oriented Temer, followed by far-right
Bolsonaro—consolidated a radical political U-turn, away from the Workers’ Party
governments (2003–2016). Yet, the country has maintained its commitment to the
Paris Agreement. The RenovaBio program, instituted as a National Biofuels Policy,
has adopted 2025 and 2030 fuel emissions reduction targets, has created a grading
system to certify biofuel producers according to their emissions reductions, and set
up a market for Certificates of Decarbonization by Biofuels (CBIO). The program
should operate initially from 2020 through to 2030, with the expectation of renewal
after that (MME 2018). Table 5.3 summarizes the key policies from this current,
sustainability-oriented phase of ethanol promotion in Brazil.
In contrast to ethanol, biodiesel in Brazil is a far newer commercial sector, and
it has a much leaner policy. Its framework was laid out in the National Program
on Biodiesel Production and Use (Programa Nacional de Produção e Uso do
Biodiesel—PNPB), launched in 2004. PNPB introduced a sequence of biodiesel
blending mandates: 2% blending (B2) came into force in 2008; B3 was initially
foreseen for 2010 but anticipated to July 2008 thanks to industry readiness; and the
same happened to B5, pulled from 2013 to 2010 (Law 11.097/2005). These blending
mandates continue to be the core of Brazil’s biodiesel policy. Later increases have
been steadily implemented, with B12 coming into force in 2020 and an expectation
of B15 by 2023. Besides, the government has offered credit and fiscal incentives
to biodiesel producers. Finally, PNPB established that biodiesel sales to distributors
would take place exclusively through state-regulated auctions (Law 11.116/2005).
By early 2020, more than 70 such auctions had taken place, trading a continuously
growing amount of fuel.
A key element of PNPB has been its social orientation. The policy determines
that biodiesel industries that source feedstock from smallholder “family agriculture”
(which has a legal definition in Brazil
10 ) receive a social fuel seal, which grants additional credit, fiscal advantages, and priority in 80% of the auctioned sales.
11 Due to the
initially problematic integration of smallholders, the program was reformed in 2009
and subsequently amended in 2011 and 2012 to add further requirements and specifications. The policy started requiring that biodiesel industries provide smallholders
with technical assistance and that supply contracts be validated by a representative
labor union or social movement to safeguard smallholders’ interests (MDA 2009).
This change coincided with the creation of Petrobras Biofuels—then presided by the
9 Law 13.576/2017.
10 Law 11.326 of 24th July 2006 defines family farmers as those who run the farm with and use
primarily labor from his/her own family, whose income derives mainly from farming, and who owns
not more than four fiscal modules—an area measure which varies depending on the region of the
country, from 20 ha in more developed to 400 ha in remote regions.
11 The requirement is that at least 30% of the company’s total expenditures on feedstock sourcing
must be directed to smallholders (MDA 2009).