Brazilian Biofuels Programmes from the WEL Nexus Perspective

Brazil’s biofuel programmes viewed from the WEL-nexus perspective1 IntroductionThe successful inclusion of biofuels in Brazi’s fuel structure was the result of a combination ofleverage mechanisms (CNPq, 1980; BRASIL, 2005, 2007a; MAPA, 2006) which actedsimultaneously and comprehensively in the different parts of the ethanol and bio-diesel valuechains.The Brazilian National Alcohol Programme for the production of ethanol – Proalcool – wasbased on enormous state intervention that included: shaping agricultural and industrial policiestoward the goals of the programme; investing public resources in research and development(R&D); regulating and giving incentives to the private sector to pursue innovation and invest inethanol-related activities; and giving incentives to car owners to shift to ethanol-fuelledvehicles (ANP, 2010a). As the programme evolved, the increased production of ethanol from2003 was based on a technological innovation. The intensive use of electronics embedded inadvanced systems for controlling the fuel mixture and ignition made it possible to launchvehicles with ‘flexible’ (flex-fuel) motors. Such motors, without any interference on the part ofthe driver, can use gasoline (with 20% to 25% of ethanol) (ANP, 2011a), pure hydratedethanol, or even mixtures of these two fuels in any proportion, in accordance with efficiencyand drivability requirements and compliance with the legal limits for exhaust emissions(Joseph, 2007).Most new vehicles sold in Brazil are equipped with such motors. 1 Consumer acceptance comesfrom the fact that the ‘flex’ car gives drivers greater freedom to choose fuel at the pump, sothey can opt for the cheapest. For this reason, besides the compulsory addition of anhydrousethanol to gasoline, 2 ethanol production has practically doubled in Brazil since 2003 (see Table1.1).Initially launched with the compulsory addition of 2% in volume to diesel oil (B2), since 2008the National Programme for the Production and Use of Bio-diesel (PNPB) has made it obligatoryto add a fixed percentage of bio-diesel to mineral diesel, currently 5% volume (ANP, 2010a).To a large extent, it was possible to bring forward the use of B5 by mobilising bio-diesel’svalue chains. For instance, in 2010 total bio-diesel output in Brazil (2.4 billion litres), as well asthe present production capacity of the 67 authorised plants (5.2 billion litres per year) (seeTable 1.1) is significantly higher than the captive demand, taking as a basis total dieselconsumption in that same year (ANP, 2011c).Table 1.1 Biofuel production in Brazil and its share in final energy consumption,2003 and 2010Ethanol production(million litres)Bio-diesel production(million litres)% biofuel in final consumptionby energy source2003 2010 Change 2008 2010 Change 2003 201012,623 25,130 +99% 1,167 2,397 +105% 3.4% 6.3%Source: The authors based on BRASIL, 2010, 2011; UNICA, 2011a.Ethanol may be obtained from any biomass containing significant amounts of starch or sugars.The process for sugar-based production, such as sugar cane, is simpler and involves one lessstage since the sugars are available in the biomass. Normally, the process is based on theextraction (by grinding or diffusion) of sugars, which go directly to the fermenting process.After fermentation the resulting liquor is distilled, just as in the case of starch-based1 Introduced in Brazil in March 2003, flex-fuel type vehicles represented approximately 2.7% of the total produced inBrazil in that year. However, approximately 80% of the vehicles produced in the country in 2009 were of the flex-fueltype (ANFAVEA, 2010).2 Added to gasoline in a range of 22% to 24% since 1998, the mandatory addition has been fixed at 25% since 1 July2007, and this is still in force (ANP, 2011b).7