70
4 International Bioeconomy Governance …
for consumption by 2022, 79 billion liters should be of “advanced biofuels”, and
within these, 60.5 billion liters would be cellulosic ethanol (EPA 2010). However,
the reality is that cellulosic ethanol production has mostly stagnated and is yet to
gain commercial relevance due to technical difficulties and high production costs
(Padella et al. 2019). In practice, it is mostly corn-grain ethanol that continues to fill
the gap.
Although it remains to be seen whether US policy will change due to the shortfall in cellulosic ethanol production, another approach has also materialized to help
fulfill the US consumption mandate. As sugarcane-ethanol is the only “advanced
biofuel” available on a large scale, a peculiar, policy-driven, two-way ethanol
trade between Brazil and the US became established. While the North American
country would export to Brazil corn-grain ethanol (which does not meet its own
“advanced biofuel” qualifications), the South American country would export to the
US sugarcane-ethanol (which does) (EPA 2010). This bilateral trade was a reality for
some time, before Brazil’s domestic ethanol consumption outpaced its production
(see Chapter 5).
As reality imposes itself on the early optimistic predictions made in the heat of
the food vs. fuel controversy, it becomes increasingly clear that biofuels made from
conventional crops will remain dominant for the near future. Meanwhile, the actual
contribution of next-generation technologies remains to be seen.
4.1.2 Brazil
Brazil is the world’s second-largest biofuel producer, has the longest large-scale
commercial experience, and has been one of the most active promoters of biofuels
worldwide. Brazilian biofuel production consists primarily of sugarcane ethanol
(85%) and soybean biodiesel (9%). In total, ethanol and biodiesel meet about 23%
of the energy demand in the transport sector (EPE 2019, p. 82). Their production
claims nearly 37% of Brazil’s vegetable oil (mainly soy) and usually between 50
and 65% of sugarcane (OECD/FAO 2019). This variation occurs because most
Brazilian sugarcane mills can switch back and forth between sugar and ethanol
production depending on market signals. Besides, electricity generation from sugarcane biomass has provided 11% of Brazil’s total energy needs. Altogether, these
crop-based biofuels have met 19% of the country’s energy consumption (EPE 2019,
p. 27).
Brazil has also promoted biofuels abroad as a rural development strategy. It has
particularly attempted to replicate experiences (e.g., sugarcane-ethanol production)
in Sub-Saharan Africa (Wilkinson and Herrera 2010). In Ghana, Brazil opened the
first foreign office of its state-owned agricultural research corporation (EMBRAPA)
in 2008 (Bastos Lima 2012). It was also established in 2010 a development cooperation agreement with the EU focused on Portuguese-speaking Africa. With support
from Brazilian companies, the initiative led to a trilateral partnership with Mozambique to produce sugarcane-ethanol in this country, aiming at the European market
4 International Bioeconomy Governance …
for consumption by 2022, 79 billion liters should be of “advanced biofuels”, and
within these, 60.5 billion liters would be cellulosic ethanol (EPA 2010). However,
the reality is that cellulosic ethanol production has mostly stagnated and is yet to
gain commercial relevance due to technical difficulties and high production costs
(Padella et al. 2019). In practice, it is mostly corn-grain ethanol that continues to fill
the gap.
Although it remains to be seen whether US policy will change due to the shortfall in cellulosic ethanol production, another approach has also materialized to help
fulfill the US consumption mandate. As sugarcane-ethanol is the only “advanced
biofuel” available on a large scale, a peculiar, policy-driven, two-way ethanol
trade between Brazil and the US became established. While the North American
country would export to Brazil corn-grain ethanol (which does not meet its own
“advanced biofuel” qualifications), the South American country would export to the
US sugarcane-ethanol (which does) (EPA 2010). This bilateral trade was a reality for
some time, before Brazil’s domestic ethanol consumption outpaced its production
(see Chapter 5).
As reality imposes itself on the early optimistic predictions made in the heat of
the food vs. fuel controversy, it becomes increasingly clear that biofuels made from
conventional crops will remain dominant for the near future. Meanwhile, the actual
contribution of next-generation technologies remains to be seen.
4.1.2 Brazil
Brazil is the world’s second-largest biofuel producer, has the longest large-scale
commercial experience, and has been one of the most active promoters of biofuels
worldwide. Brazilian biofuel production consists primarily of sugarcane ethanol
(85%) and soybean biodiesel (9%). In total, ethanol and biodiesel meet about 23%
of the energy demand in the transport sector (EPE 2019, p. 82). Their production
claims nearly 37% of Brazil’s vegetable oil (mainly soy) and usually between 50
and 65% of sugarcane (OECD/FAO 2019). This variation occurs because most
Brazilian sugarcane mills can switch back and forth between sugar and ethanol
production depending on market signals. Besides, electricity generation from sugarcane biomass has provided 11% of Brazil’s total energy needs. Altogether, these
crop-based biofuels have met 19% of the country’s energy consumption (EPE 2019,
p. 27).
Brazil has also promoted biofuels abroad as a rural development strategy. It has
particularly attempted to replicate experiences (e.g., sugarcane-ethanol production)
in Sub-Saharan Africa (Wilkinson and Herrera 2010). In Ghana, Brazil opened the
first foreign office of its state-owned agricultural research corporation (EMBRAPA)
in 2008 (Bastos Lima 2012). It was also established in 2010 a development cooperation agreement with the EU focused on Portuguese-speaking Africa. With support
from Brazilian companies, the initiative led to a trilateral partnership with Mozambique to produce sugarcane-ethanol in this country, aiming at the European market