Brazilian Biofuels Programmes from the WEL Nexus Perspective

Brazil’s biofuel programmes viewed from the WEL-nexus perspective4 Sustainability of the programmes in relation toinclusive and sustainable growthThe use of biofuels may have many favourable environmental, social and economic aspectsthat can help to create an alternative and more sustainable development path, taking intoaccount the three dimensions of ISG. Biomass and the use of biofuels contribute to ruraldevelopment (Goldemberg et al., 2004a), can serve to regulate markets and, contribute toreducing GHG emissions in a cost-effective way by diversifying the sources of fuel.A number of studies on the sustainability of Brazil’s biofuel programmes have been publishedover the years, often taking diverse approaches to the issue (Goldenberg and Guardabassi,2009; Hall et al., 2009; Rathmann et al., 2011; Nardon and Aten, 2008; Goldemberg et al.,2004b; Szklo et al., 2005; Macedo et al., 2008; Luo et al., 2009; Pacca and Moreira, 2009;Garcez and Vianna, 2009). Here, we use the WEL-nexus approach to identify the strengths andweaknesses of the two Brazilian biofuel programmes in relation to achieving ISG.To identify these drivers, in terms of land and water requirements, we base our analysis on theforecasts of biofuel production according to the Ten-year Energy Expansion Plan 2019,produced by Empresa de Pesquisa Energética (Energy Research Company) (BRASIL, 2011b).According to this Plan, in the 2011–2019 period, ethanol production in Brazil is expected to risefrom 25.1 to 73.3 billion litres. During this same period, exports of Brazilian ethanol areexpected to grow exponentially, from the current 3.4 billion litres to 9.9 billion litres in 2019.In order to meet this demand, sugar cane production in 2019 is estimated to reach 1,135million tons (an increase of 64% in relation to 2010); with a productivity gain of 1.5% peryear, this will require an additional farming area of 11.9 million ha. It is assumed that thisexpansion will take place in areas that are currently used for extensive cattle rearing/ranching,especially in the Mid-west, by concentrating this activity in smaller areas. Finally, theprojections assume that the available arable area would permit sugar cane production in Brazilto be increased more than tenfold (BRASIL, 2011b).With regard to bio-diesel production, this should rise from 2.4 to 4.2 billion litres between2011 and 2019 – an increase that simply keeps pace with the growth in demand for diesel,maintaining at 5% the mandatory percentage of bio-diesel added to mineral diesel (BRASIL,2011b). As a result, if the 84% participation of soy oil in total bio-diesel output is maintained,by 2019 a total production of 19.8 million tons of soybeans would be required for theproduction of biofuel. Assuming an annual productivity increase of 1.5%, it would be necessaryto add about 3.4 million ha to the area currently under cultivation.In view of such growth projections for Brazil’s biofuel programmes, the aim is to determine,based on the production systems of both sugar cane and soybeans in the states of São Pauloand Mato Grosso respectively, whether these forecasts are feasible. For this purpose, weundertake a qualitative evaluation based on measuring the previous impact of gearing up theBrazilian biofuel programmes to see whether the predicted expansion is sustainable.It is therefore necessary to test:1 Whether there was an alteration in the dynamics of land prices, and consequently inagricultural production costs, to the extent of making sugar cane and soybean productionless profitable, thus constituting a barrier to the expansion of cultivation with an agroenergeticobjective.2 Whether, in the event of reduced profitability, rural producers reduced the level of realwages for rural workers to mitigate the effect of this loss.3 Whether maintaining the forecast for B5 diesel up to 2019 bears a relationship both tothe sector’s competitiveness vis-à-vis mineral diesel, and to the existence of limits to theexpansion of soy-based bio-diesel production.19