Opportunities and risks for continued biofuel expansion in Brazil

(Portuguese version can be found here)

Brazil’s advanced biofuel industry lags far behind the production capacity of its first-generation biofuel industry. Brazil’s reliance on crop-derived biofuel feedstocks, in conjunction with its vulnerable forests and savannah, presents unique risks to the climate if biofuel industry expansion continues without implementing adequate sustainability measures.

The largest climate and air quality risks come from continued expansion of biofuels within the diesel pool. The rapid expansion of soy-derived biodiesel may undermine Brazil’s long-term climate goals because of the contribution of ILUC emissions to that fuel’s life-cycle emissions impact, negating the emissions savings from displacing diesel. Brazil should halt its annual increases to the biodiesel mandate and instead incentivize the use of alternative biodiesel feedstocks without ILUC impacts, such as used cooking oil, which could yield an additional 350 million liters of biodiesel through improved collection practices. In the longer term, the transition to HVO production from used cooking oil and other wastes and residues could provide greater volumes of diesel replacements without compatibility issues.

The expansion of sugarcane in Brazil poses fewer risks. The majority of ILUC modeling suggests that although sugarcane ethanol can generate some ILUC emissions, it may still offer some carbon reductions relative to conventional petroleum. Furthermore, the RenovaBio policy will incentivize better-performing sugarcane ethanol producers, allowing the pool of fuels to decarbonize over time. Bagasse ethanol, which generates a 95% carbon savings over fossil gasoline, could be a source of ultralow-carbon fuel in the long term.