guide: the story of brazil’s ethanol programme

7/27/2019 GUIDE: The Story of Brazils Ethanol Programme

1/11ELLA AREA: ENVIRONMENTAL MANAGEMENT| ELLA THEME: BRAZILS ETHANOL PROGRAMME1

ELLA Area: Environmental ManagementELLA Theme: Brazils Ethanol Programme

Launched in 1975, Brazils ethanol programme, Pralcool , haspropelled the country towards being the worlds number one producer,user and exporter o sugarcane ethanol. Pralcool not only reducednational dependence on imported energy, it also bolstered theeconomy, created jobs and diversi ed the countrys renewable energyport olio. Many countries in A rica and Asia are dependent on importedenergy and could consider cultivating uel crops by learning rom theBrazilian experience. The development o ethanol in Brazil was notawless, however, and as such, other nations wishing to develop abio uels market can avoid making the same mistakes by understandingthe speci c challenges and impacts o ethanol production in Brazil.This Guide begins by describing the main phases o ethanol productionin Brazil, including an analysis o key government initiatives andsome o the most important bene ts to date. The ollowing sectionthen presents the social, economic and environmental impactso bio uel production in Brazil, be ore discussing the prospectso second generation ethanol, a more environmentally- riendlybio uel. Finally, the Guide describes the main enabling actorsbehind ethanol production in Brazil and summarises key policy andpractice lessons. Links to urther reading and key organisations

are also provided to guide readers to additional in ormation.

SUMMARY

LESSONS LEARNEDKEY

Guide

The biggest biofuels programme in the world, BrazilsPralcool , has had importantsuccesses including reducing dependence on oil imports, decreasing GHGemissions and creating jobs.Government policies and incentives have been fundamental to stimulating andmaintaining competitive ethanol production.

Negative environmental and social impacts of ethanol production must be tackledwith innovative planning tools and strong enforcement measures.Second generation ethanol offers the potential for signi cantly increasingproductivity without the need for expanding cultivation, and may therefore beconsidered a more sustainable fuel option.

Energy insecurity in the 1970s led the Braziliangovernment to drive forward the development

of the worlds strongest national biofuelsindustry. So just how has Brazil become theworlds largest producer of sugarcaneethanol and what lessons can thecountrys experience provide for otherregions?

THE STORY OF BRAZILSETHANOL PROGRAMME

COMMON PROBLEM: HOW TO ACHIEVE ENERGYSECURITY?

Many developing countries are dependent on importedoil. Energy powers economic development, and thuswhen supply is threatened or prices become prohibitivelyhigh, the unctioning and growth o the economy can bedirectly a ected. The main impacts on the economy arere ected in imbalances between internal and externalaccounts, rising in ation and unemployment and allingGross Domestic Product (GDP). Until the 1980s Brazilound itsel in this very position, with approximately 80%
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1 Brazilian Energy Research Company (Empresa de Pesquisa Energtica EPE). 2011. Brazil Energy Balance 2012 . EPE, Rio de Janeiro.2 Decree number 76,593 o 14 th November 1975.3 Biodieselbr. 2011. PrAlcool Programa Brasileiro de lcool (PrAlcool - The Brazilian Ethanol Programme) . Biodieselb, Online publication.

o oil consumed in the country coming rom abroad. 1 With theoil crisis o 1973, the country dedicated itsel to developing

an ambitious bio uels programme, which improved energysecurity, stimulated the economy, and had the additionalbene t o reducing greenhouse gases (GHG). Another majoradvantage o ethanol is that this uel is compatible withexisting technology, and can be stored, distributed and usedin a very similar way to petrol.

Other developing countries with available land and suitableclimatic conditions have the basic requirements with whichto reduce energy insecurity and become better prepared toace uture challenges. In these countries, investments inthe production o renewable uels can produce numerousadditional advantages or the national economy, such as thosementioned or Brazil.

This Guide is the result o extensive research on the historyo Brazilian ethanol. Data has been sourced rom academicpapers and reports rom international institutions suchas the International Energy Agency and the World Bank.In addition, data and charts have been sourced rom theBrazilian government and private institutions such as the

Energy Research Company ( Empresa de Pesquisa Energtica - EPE), the Ministry o Agriculture, Livestock and Food Supply(Ministrio da Agricultura, Pecuria e Abastecimento - MAPA)and renowned bio uel journals.

THE BRAZILIAN ETHANOL EXPERIENCE ANOVERVIEW

Forty years a ter the national ethanol programme was rstimplemented, Brazil is now known and respected worldwideor its success in producing and using ethanol, a renewableand versatile uel. Today, Brazil is the largest producer anduser o ethanol rom sugarcane and is the biggest ethanolexporter in the world. As well as reducing petrol imports, thisbio uel provides several bene ts to the country, such as joband income creation, energy security, a cleaner energy pro leand reduced GHG emissions. However, ethanol productionin Brazil has also encountered some signi cant problems.

Over the last ve years, or example, ethanol productionhas become less competitive and, as a result, prices have

risen and users are choosing to ll up with gasoline instead.In response, ethanol producers are calling on the ederalgovernment or tax breaks and nancial aid to help restorethe competitiveness o ethanol once again. The history,current situation and uture o ethanol production in Brazilare described in the sections that ollow.

Ethanols Rise

In the ace o rising international oil prices and the 1970s oilcrisis, the government o Brazil organised a working group

consisting o representatives rom research institutions, theautomobile industry, sugar re neries and ethanol distilleries,.This working group was responsible or creating a programmeto leverage production and use o ethanol as a uel with theprincipal objective o ensuring national energy security.

The result was the National Ethanol Programme ( Programa Nacional do lcool Prolcool ) which was launched in1975. 2 Prolcool aimed to expand the production o ethanolrom sugarcane, with the speci c purpose o mixing it with

gasoline as an alternative energy source to oil. Through theprogramme, the government provided subsidies, incentivesand tax breaks in order to reduce the costs o production andincrease the competitiveness o ethanol.

The programme was also intended to reduce incomedisparities within the country, expand production o capitalgoods and create jobs. For detailed in ormation about publicpolicies, government incentives to boost ethanol productionand market reactions see the ELLA Brie : Government Intervention to Strengthen the Ethanol Sector: Lessons rom

Brazil .

Through this programme, Brazil was able to replace part othe national uel quota derived rom petroleum. Moreover,Prolcool strengthened the sugarcane sector by reactivatingsugar or ethanol production in unused mills and distilleries.The national oil company, Petrobras, played an importantrole in the creation and consolidation o the in rastructure
https://ben.epe.gov.br/downloads/Relatorio_Final_BEN_2012.pdfhttps://ben.epe.gov.br/downloads/Relatorio_Final_BEN_2012.pdfhttp://www.biodieselbr.com/proalcool/pro-alcool/programa-etanol.htmhttp://www.biodieselbr.com/proalcool/pro-alcool/programa-etanol.htmhttp://ella.practicalaction.org/node/1095http://ella.practicalaction.org/node/1095http://ella.practicalaction.org/node/1095http://ella.practicalaction.org/node/1095http://ella.practicalaction.org/node/1095http://ella.practicalaction.org/node/1095http://www.biodieselbr.com/proalcool/pro-alcool/programa-etanol.htmhttps://ben.epe.gov.br/downloads/Relatorio_Final_BEN_2012.pdf



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4 Energy Research Company (Empresa de Pesquisa Energtica - EPE). 2012. Anlise de Conjuntura Econmica dos Biocombustveis 2011 (Analysis o Economic Situation o Bio uels 2011) . EPE, Rio de Janeiro.5 Hydrous ethanol is the liquid uel generated rom ethanol. It can be used as uel in pure ethanol driven engines or in Flex Fuel Vehicles (FFVs). Anhydrousethanol is the pure ethanol made through the process o dehydrating the hydrous ethanol. It is used as an additive to be blended with pure gasoline.6 Once anhydrous ethanol is more pro table than hydrated, the bigger the blend o anhydrous ethanol in gasoline and the higher the pro ts or the producers.

Source: Own elaboration adapted rom Ministry o Agriculture, Livestock andFood Supply ( Ministrio da Agricultura, Pecuria e Abastecimento MAPA).2012. Anurio Estatstico de Agroenergia 2012 (Statistical Yearbook oAgrienergy 2012). MAPA, Brazilia.

Figure 1: Hydrated and Anhydrous Ethanol Supply in Brazil (billion litres) 5

required or the Prolcool programme and or several yearswas in charge o buying, mixing and distributing ethanolcountry-wide.

Prolcool also helped to drive orward signi icanttechnological advances or both growing and processingsugarcane. One o the programmes major successes wasthe promotion o sectoral synergies whereby the technicalexpertise o major industries and research institutions werecombined with support rom government agencies in severalkey areas including technology, industrial policy, energyplanning and agriculture.

A Second International Crisis and the Second Phase ofPralcool

A ter another international oil crisis during the 1970s, theBrazilian government decided to shi t the ocus o the secondphase o the Pralcool programme rom the production oethanol as an additive (anhydrous ethanol), to a completeuel (hydrous ethanol) or direct use in cars with appropriateengines. In 1979, the rst commercial neat ethanol-poweredcar was launched in Brazil.

During the 1980s, most o the vehicles sold in the country wereethanol- uelled models. In 1986, a record 700,000 ethanol-powered vehicles were licensed and ethanol productionreached 12.3 billion litres, three times higher than in 1976. 3

The Decadence of the Ethanol Industry

Reductions in international oil prices and increases in sugarprices in the international market at the end o the 1980sdrove producers to redirect production away rom ethanol.This led to severe shortages in ethanol supply between 1989

and 1990, with many people unable to buy uel or their cars.This crisis a ected the credibility o Prolcool , as didsubsequent reductions in government incentives or ethanolproduction, which pushed prices up even urther. The resultwas a signi cant decrease in demand and, consequently, inthe sales o cars powered by this uel. Finally, the Prolcool programme was terminated in 1990.

A New Ethanol Era: The Advent of Flex Fuel Technology

In 2003, driven by energy security and global warming issues,

the government o Brazil encouraged the development o exuel (FFV) technology which enables engines to run on anymix o ethanol or gasoline. Widely accepted by consumers,these vehicles boosted ethanol consumption in the domesticmarket, opening a new horizon or the expansion o theethanol industry in Brazil. For more details on the ex ueltechnology and its impact on the ethanol market see the ELLA Brie : Government Interventions to Strengthen the Ethanol Sector: Lessons rom Brazil .

Since then, the purchase o FFVs increased at a dramatic pace.The share o FFVs in the total light vehicle market was 4.7% in2003 and by 2011 83.1% o new cars sold in Brazil used exuel technology. As such, ethanol production grew rom 11.5billion litres in 2003 to its highest value to date o 28 billionlitres in 2009. 4 Figure 1 below illustrates the growth o ethanolproduction in Brazil between 1975 and 2012.

In May 2013, the Brazilian government announced thecountrys most recent public policy aimed at providingincentives to increase the competitiveness o ethanolproduction once again. The policy includes:

Targets to increase anhydrous ethanol blend in gasolinerom 20% to 25% 6

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Hydrated

Beginning oPralcool Launch oethanol cars Launch o exuel cars

Internationalfnancial crisis

End oPralcool

Anhydrous30
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Strengthens energy security

Since Brazil is not sel -sufcient in producing adequate

gasoline to meet domestic demand, it is very important tocomplement and diversi y the transportation energy mixwith national sources. The bigger the share o a domesticallysourced uel (in this case ethanol) in the energy matrix, theless reliant the country is on uel imports and the moreresistant it is to external shocks. Figure 4 shows that Brazilreduced its external uel dependence at the same time aslaunching the second phase o Prolcool . This becomesclearer when compared to Figure 1 above. Braziliandependence on imported oil (yellow line in Figure 4) decreases

substantially when hydrated ethanol production (red line inFigure 1) increases considerably.

Source: Energy Research Company (Empresa de Pesquisa Energtica - EPE).2012. Balano Energtico Nacional 2012 (Brazilian Energy Balance 2012) . EPE, Rio de Janeiro.

Figure 4: Brazilian Dependence on Energy Imports

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Besides reducing vulnerability to oil price volatility, producingand using ethanol also results in oreign exchange savingsrom buying gasoline or petrol.

Boosts GDP and generates employment

The ethanol economy boosts several sectors linked tothis bio uel, such as capital goods or mill construction,investments in development and innovation and the entireagro-industrial market chain or ethanol production.According to the Brazilian Sugarcane Journal ( Jornal da Cana )10 , sugarcane production or sugar ethanol andbioelectricity was worth US$60 billion between 2010 and2011, approximately 1.6% o national GDP. In the same period,

investments in sugarcane production reached US$4.7 billion

and generated 4.5 million jobs (directly and indirectly).Furthermore, the sugarcane industry encompassed 72,000independent producers, generated US$12.5 million in exportsand paid US$7.5 million in taxes.

CONTENTIOUS ISSUES IN ETHANOL EXPANSIO

Despite being renewable and clean compared to ossil uels,sugarcane ethanol can generate several negative impactsthroughout its li ecycle. These include environmental impactsrom the use o land (leading to de orestation and degradation),competition with ood crops, air pollution and health risksrom harvesting and processing techniques, and poor working

conditions. This section explores each o these in turn.

Environmental impacts

One o the biggest threats posed by the expansion oagricultural land to cultivate crops is the irreversibleconversion o virgin ecosystems. De orestation, or example,can cause the extinction o species and their habitats, as well asthe loss o ecosystem unctions such as production o biomassand conservation o genetic diversity. Wide-scale destructiono orests can also a ect the hydrological cycle and the localclimate, leading to reductions in regional precipitation andincreases in regional temperatures. In general, the impactso sugarcane expansion in areas previously used or otherproductive purposes (i.e. land-use change) are lower thanthe impacts o planting in virgin areas, especially orests.

Un ortunately, due to a lack o en orcement o nationallaws aimed at preserving native vegetation, the expansiono armland or sugarcane production over recent decadeshas led to wide-scale de orestation in Brazil. Land currently

used or sugarcane plantations is mainly located in areasthat were once occupied by the Atlantic Forest. Today, lessthan 13% o the original orest remains intact and this is nowprotected by law. 11

The ELLA Brie : Sugarcane Agro-Ecological Zoning: Greening the Expansion o Ethanol provides a review o theenvironmental impacts associated with the expansion osugarcane or ethanol production in Brazil. 12 The Brie alsoprovides an overview o government policies to control the

expansion o sugarcane production in Brazil, including the

10 Jornal da Cana. 2012. Nmeros do Setor Sucroenergtico (Numbers From the Sugarcane Industry) .Jornal da Cana . Online Publication.11 SOS Atlantic Forest. (No date). A Mata Atlntica (The Atlantic Forest) .SOS Atlantic Forest . Online publication.12 With the introduction o ex uel vehicles that can be lled up with gasoline, ethanol or a combination o both, land expansion or ethanol production in Brazilhas been considerable since 2005.
https://ben.epe.gov.br/downloads/Relatorio_Final_BEN_2012.pdfhttps://ben.epe.gov.br/downloads/Relatorio_Final_BEN_2012.pdfhttp://ella.practicalaction.org/node/1125http://ella.practicalaction.org/node/1125http://www.jornalcana.com.br/noticia/ProCana-Brasil/44467+NUMEROS-DO-SETOR-SUCROENERGETICOhttp://www.jornalcana.com.br/noticia/ProCana-Brasil/44467+NUMEROS-DO-SETOR-SUCROENERGETICOhttp://www.sosma.org.br/nossa-causa/a-mata-atlantica/http://www.sosma.org.br/nossa-causa/a-mata-atlantica/http://www.sosma.org.br/nossa-causa/a-mata-atlantica/http://www.jornalcana.com.br/noticia/ProCana-Brasil/44467+NUMEROS-DO-SETOR-SUCROENERGETICOhttp://ella.practicalaction.org/node/1125http://ella.practicalaction.org/node/1125https://ben.epe.gov.br/downloads/Relatorio_Final_BEN_2012.pdf



creation and application o the National Agro-EcologicalZoning o Sugarcane ( ZAE Cana ). ZAE Cana is a policyinstrument used by the government to plan the sustainableexpansion o sugarcane production according to speci ccriteria such as potential output and irrigation requirements.To avoid and reduce environmental harm, certain areas thatare considered environmentally ragile have been excludedrom the zoning, meaning that sugarcane crops are nowstrictly orbidden there. 13

Aside rom de orestation, other environmental impactso sugarcane cultivation, harvesting and processinginclude soil degradation, biodiversity loss, intense water

use, water contamination, atmospheric emissionsand massive waste generation. When the Pralcool programme began, environmental institutions, legislationand public management linked to bio uels were all weak,and thus were unable to stop signi cant environmentalharm rom being caused. Over recent years, e orts havebeen made to reduce environmental impacts due togreater ecological concern and the design o a speci cramework or bio uels and the environment. For more

details, see the ELLA Brie : Brazils E orts to Mitigate

the Environmental Impacts o Ethanol Production .14

Another major environmental concern is related to thepractice o pre-harvest burning, which involves burning thespikey voluminous leaves o the sugarcane plant in order tospeed up manual harvesting and reduce injuries su ered bycutters. More in ormation on this can be ound in the ELLA Brie : From Manual to Mechanical Harvesting: Reducing Environmental Impacts and Increasing Cogeneration Potential . Through the governments Green Protocol, this

technique is gradually being replaced with mechanisedharvesting, which is good news or the environment but willinevitably result in job losses or labourers.

Impacts on the workforce

Many people are economically dependent on the sugarcane

industry, 15 with the majority o employment opportunitiesbeing low-income, seasonal positions associated with manualharvesting. This kind o manual work generally consists o 8to 12 hours o cutting and carrying sugarcane stalks, whileinhaling dust and smoke rom the burned residue. To cutten tonnes and earn US$20 per day, it is necessary to walkapproximately ve kilometres and make around 67,000movements with a machete. At such a pace, the average cutterearns an average o US$2 per tonne o sugarcane collected. 17

In addition, basic working conditions such as clean water,toilets and ood storage acilities are usually lacking insugarcane elds. 18 Due to the seasonal nature o the work,many o the workers are migrants who have no alternative butto reside in inadequate lodgings during the harvest season. 19

As previously mentioned, pre-harvest burning is slowlybeing eradicated with the adoption o mechanised harvestingtechniques and this is increasing unemployment amongmanual labourers. On average, one mechanical harvesterreplaces 100 workers, 20 and as such thousands o unskilledworkers have lost their jobs over recent years. 21

At the same time, the threat o unemployment leads tothe acceptance o poor working conditions, including longworking hours, a lack o protective equipment, inadequatemeals, unsa e transportation, high exposure to soot anddust, risk rom pesticide poisoning and the development orepetitive-strain injuries. 22

To reduce problems related to working conditions, the Brazilian

government rati ed the International Labour Organizationsrecommendations which orbid the most precarious orms olabour (including child labour) and set minimum standards

13 The Amazon Pantanal and Upper Paraguay River Basin are the two areas designated as o -limits or ethanol crops.14 This Brie also provides in ormation on speci c policies or reducing environmental impacts, such as Sugarcane Agro-Ecological Zoning, the Green Protocol,water ees and licensing requirements, among others.15 Jornal da Cana 2012, see n11 above.16 Rodrigues, A. 2006. O Corte: Como Vivem e Morrem os Migrantes nos Canaviais de So Paulo (The Cut: How Migrants Live and Die in So Paulos Plantations) .Instituto Superior de Ciencias Aplicadas, Limeira.17 De Oliveira, C. 2013. Cortadores de Cana a Doecem e Morrem por Conta de Pagamento por Produo (Sugarcane Cutters Get Sick and Die on Account o Payment or Production) .Revista Forum , Online publication.18 Martinelli, L. and Filoso, S. 2008. Expansion o Sugarcane Ethanol Production in Brazil: Environmental and Social Challenges. In: Ecological Applications 18(4) 885-898.19 Costa, C., and Neves, C. S. 2005. Super Exploraco do Trabalho na Lavoura de Cana-de-Accar (Over Exploitation o Cane Sugar Crop Labourers) . In: Rodriguez,

M. E. (Ed.).Relatorias Nacionais em Direitos Humanos Econmicos,Sociais, Culturais e Ambientais. In orme 2005 (National Rapporteurs on Economic, Social,Cultural and Environmental Afairs. 2005 Report) . Plata orma DhESCA, Rio de Janeiro.20 Guilhoto et al . 2001. Emprego e Mecanizao na Colheita da Cana de Acar: Di erenas Regionais (Employment and Mechanisation in the Sugarcane Harvest: Regional Diferences) . Unpublished manuscript.21 Correio do Brasil. 2011. Desempregados pela Mecanizao, Ex-cortadores de Cana Ingressam em Luta pela Terra (Unemployed by Mechanisation. Former Cane Cutters Join in the Struggle or Land) Correio do Brasil , Online publication.22 Smeets, E. et al . 2008. The Sustainability o Brazilian Ethanol: An Assessment o the Possibilities o Certi ed Production . In:Biomass and Bioenergy 32(8)781-813.
http://ella.practicalaction.org/node/1054http://ella.practicalaction.org/node/1054http://ella.practicalaction.org/node/1046http://ella.practicalaction.org/node/1046http://ella.practicalaction.org/node/1046http://ella.practicalaction.org/node/1046http://revistaforum.com.br/blog/2013/02/cortadores-de-cana-adoecem-e-morrem-por-conta-de-pagamento-por-producao/http://revistaforum.com.br/blog/2013/02/cortadores-de-cana-adoecem-e-morrem-por-conta-de-pagamento-por-producao/http://pfdc.pgr.mpf.mp.br/atuacao-e-conteudos-de-apoio/publicacoes/direitos-humanos/revista-relatorias.pdfhttp://pfdc.pgr.mpf.mp.br/atuacao-e-conteudos-de-apoio/publicacoes/direitos-humanos/revista-relatorias.pdfhttp://pfdc.pgr.mpf.mp.br/atuacao-e-conteudos-de-apoio/publicacoes/direitos-humanos/revista-relatorias.pdfhttp://www.sober.org.br/palestra/12/09O428.pdfhttp://www.sober.org.br/palestra/12/09O428.pdfhttp://www.sober.org.br/palestra/12/09O428.pdfhttp://correiodobrasil.com.br/noticias/brasil/desempregados-pela-mecanizacao-ex-cortadores-de-cana-ingressam-em-luta-pela-terra/212499/http://correiodobrasil.com.br/noticias/brasil/desempregados-pela-mecanizacao-ex-cortadores-de-cana-ingressam-em-luta-pela-terra/212499/http://correiodobrasil.com.br/noticias/brasil/desempregados-pela-mecanizacao-ex-cortadores-de-cana-ingressam-em-luta-pela-terra/212499/http://www.sciencedirect.com/science/article/pii/S0961953408000159http://www.sciencedirect.com/science/article/pii/S0961953408000159http://www.sciencedirect.com/science/article/pii/S0961953408000159http://correiodobrasil.com.br/noticias/brasil/desempregados-pela-mecanizacao-ex-cortadores-de-cana-ingressam-em-luta-pela-terra/212499/http://correiodobrasil.com.br/noticias/brasil/desempregados-pela-mecanizacao-ex-cortadores-de-cana-ingressam-em-luta-pela-terra/212499/http://www.sober.org.br/palestra/12/09O428.pdfhttp://www.sober.org.br/palestra/12/09O428.pdfhttp://pfdc.pgr.mpf.mp.br/atuacao-e-conteudos-de-apoio/publicacoes/direitos-humanos/revista-relatorias.pdfhttp://revistaforum.com.br/blog/2013/02/cortadores-de-cana-adoecem-e-morrem-por-conta-de-pagamento-por-producao/http://revistaforum.com.br/blog/2013/02/cortadores-de-cana-adoecem-e-morrem-por-conta-de-pagamento-por-producao/http://ella.practicalaction.org/node/1046http://ella.practicalaction.org/node/1046http://ella.practicalaction.org/node/1046http://ella.practicalaction.org/node/1046http://ella.practicalaction.org/node/1054http://ella.practicalaction.org/node/1054



23 Goldemberg J., Coelho S., Guardabassi P. 2008. The Sustainability o Ethanol Production rom Sugarcane In:Energy Policy 36 2086-2097.24 Rodrigues, L. 2012. Compromisso para Gringo Ver (Fake Commitment) .O Globo Economica , Online Publication.25 Johansson, D., Azar, C. 2007. A Scenario Based Analysis o Land Competition Between Food and Bioenergy Production in the US . In:Climate Change 82 267-291.26 Rathmann, R., Szklo, A., Schae er R. 2010. Land Use Competition or Production o Food and Liquid Bio uels: An Analysis o the Arguments in the Current Debate .In:Renewable Energy 35 (1) 14 -22.Oberling, D. 2008. Avaliao Ambiental Estratgica da Expanso de Etanol no Brasil: Uma Proposta Metodolgica e sua Aplicao Preliminar (Strategic Environmental Assessment o the Ethanol Expansion in Brazil: A Methodological Proposal and its Preliminary Application) MSc dissertation. Federal Universityo Rio de Janeiro, Rio de Janiero.27 Sims, R. E. H. et al . 2009. An Overview o Second Generation Bio uel Technologies .In:Bioresource Technology 101 (2010) 1570 -1580.Mitchell, D. 2008. A Note on Rising Food Prices . World Bank, Washington, DC.28 Smeets et al . 2008, see n22 above.29 Mitchell 2008, see n27 above.

or physically demanding jobs. The Brazilian governmenthas also intensi ied inspections o working conditionsin sugarcane production through the Special MobileInspection Group o the Ministry o Labour and Employment.However, inspections are still not o adequate standardand violations o workers rights continue to be reported. 23

Every year several mills are prosecuted because o evidenceo bad treatment o workers. At least 60 o the 169 millscerti ed by the government as committed companies arecurrently responding to reports o irregularities related tolabour issues. 24 The committed companies certi cationis a government initiative to improve working conditions in

manual cultivation o sugarcane and represents an e ort topromote the sale o Brazilian ethanol abroad as a sustainableand socially responsible product. The certi cation is grantedbased on best practices identi ed by a tripartite commission,which includes producers, workers and the government.

The debate about competition between food and fuel

The expansion o production o eedstock or energy purposesmay represent a change in the use o land traditionally setaside or ood production. Many armers are tempted intoswitching to energy crops in order to make higher pro ts,however this can have a negative e ect on ood supply. 25 And in act this raises a global dilemma - the need to eedthe worlds population versus a growing energy demand thatcan partially be met by using land to produce uel rather thanood crops. It is clear, there ore, that two important actorsthat can determine the impacts o sugarcane production onlocal and global ood security are the choice o eedstock andthe nature o public policies.

Recent studies have ound that the emergence o agro-energyhas altered land use dynamics, albeit not yet signi cantly,with a shi t o areas traditionally used to grow oods over tocrops to produce bio uels. 26 This has contributed to raisingood prices by between 15% and 75%. 27 In an important

sugarcane growing area in western So Paolo, Brazil, the

doubling in land prices between 2002 and 2005 suggests anindirect impact on ood prices. 28 Brazilian sugarcane ethanolhas not contributed directly to rises in prices o agriculturalcommodities, however, because while energy demand grew,sugarcane production increased ast enough to meet thedemand or both sugar and ethanol. 29

Although indirect impacts o sugarcane production on oodsupply do exist in Brazil and are important, they are still smallin magnitude. Also, the structure o Brazilian mills is exibleenough to produce both sugar and ethanol. Even when theprice o ethanol rises, the mills allocate a maximum o 60%o sugarcane to ethanol production. So, in Brazil, producing

ethanol does not mean making a choice between bio uel andood. Thus, Brazil nds itsel at an advantage in comparisonto other countries such as the USA, where the corn used toproduce ethanol is un t or human consumption.

SECOND GENERATION ETHANOL: PERSPECTIVON A MORE SUSTAINABLE BIOFUEL

Due to the exhaustion in productivity o traditional sugarcaneplantations, increasing bio uel production implicitly requires

increasing land use. As previously mentioned, this canpotentially result in greater pressure on virgin orest coverand in ation in ood prices. In an attempt to avoid thesenegative impacts while at the same time meet targets orsubstituting oil derivatives and or reducing GHG emissions,the Brazilian government boosted the development o anadvanced, more efcient type o ethanol; the so-called secondgeneration ethanol.

Second Generation Ethanol

Second generation bio uels are produced rom residualnon- ood parts o crops, such as stems, leaves and husks, aswell as other crops that are not used or ood purposes, suchas switchgrass, Jatropha and Miscanthus, and cereals thatbear little grain. Industry waste such as wood chips, skinsand pulp rom ruit pressing and other organic waste can
http://cenbio.iee.usp.br/download/publicacoes/JEPO2750.pdfhttp://cenbio.iee.usp.br/download/publicacoes/JEPO2750.pdfhttp://oglobo.globo.com/economia/compromisso-para-gringo-ver-5549753http://oglobo.globo.com/economia/compromisso-para-gringo-ver-5549753http://cires.colorado.edu/science/groups/pielke/classes/atoc7500/Johannson_Azar2007.pdfhttp://cires.colorado.edu/science/groups/pielke/classes/atoc7500/Johannson_Azar2007.pdfhttp://www.rembio.org.mx/2011/Documentos/Publicaciones/C3/Land-competition.pdfhttp://www.rembio.org.mx/2011/Documentos/Publicaciones/C3/Land-competition.pdfhttp://www.rembio.org.mx/2011/Documentos/Publicaciones/C3/Land-competition.pdfhttp://www.rembio.org.mx/2011/Documentos/Publicaciones/C3/Land-competition.pdfhttp://www.ppe.ufrj.br/ppe/production/tesis/danieloberling.pdfhttp://www.ppe.ufrj.br/ppe/production/tesis/danieloberling.pdfhttp://www.researchgate.net/publication/40450346_An_overview_of_second_generation_biofuel_technologies/file/d912f5112ca5a6d34a.pdfhttp://www.researchgate.net/publication/40450346_An_overview_of_second_generation_biofuel_technologies/file/d912f5112ca5a6d34a.pdfhttp://www.researchgate.net/publication/40450346_An_overview_of_second_generation_biofuel_technologies/file/d912f5112ca5a6d34a.pdfhttp://www-wds.worldbank.org/external/default/WDSContentServer/IW3P/IB/2008/07/28/000020439_20080728103002/Rendered/PDF/WP4682.pdfhttp://www-wds.worldbank.org/external/default/WDSContentServer/IW3P/IB/2008/07/28/000020439_20080728103002/Rendered/PDF/WP4682.pdfhttp://www-wds.worldbank.org/external/default/WDSContentServer/IW3P/IB/2008/07/28/000020439_20080728103002/Rendered/PDF/WP4682.pdfhttp://www.researchgate.net/publication/40450346_An_overview_of_second_generation_biofuel_technologies/file/d912f5112ca5a6d34a.pdfhttp://www.ppe.ufrj.br/ppe/production/tesis/danieloberling.pdfhttp://www.ppe.ufrj.br/ppe/production/tesis/danieloberling.pdfhttp://www.rembio.org.mx/2011/Documentos/Publicaciones/C3/Land-competition.pdfhttp://www.rembio.org.mx/2011/Documentos/Publicaciones/C3/Land-competition.pdfhttp://cires.colorado.edu/science/groups/pielke/classes/atoc7500/Johannson_Azar2007.pdfhttp://oglobo.globo.com/economia/compromisso-para-gringo-ver-5549753http://cenbio.iee.usp.br/download/publicacoes/JEPO2750.pdf



30 International Energy Agency (IEA). 2008. From 1st to 2nd Generation Bio uel Technologies: An Overview o Current Industry and RD&D Activities . IEA, Paris.Kristou eka, L., Jandaa, K., Zilbermane, D. 2012. Relationship Between Prices o Food, Fuel and Bio uel . Paper prepared or presentation at the 131 st EAAE SeminarInnovation or Agricultural Competitiveness and Sustainability o Rural Areas, Prague, Czech Republic, September 2012.

also be used. 30 Since they can be generated rom virtuallyany biomass, second generation bio uels o er importantadvantages, such as:

Low input costs

Mass availability

The possibility o using marginal land without threateningood production

Increases in agricultural productivity

Reduction o waste

Lower GHG emissions

Second generation ethanol is there ore expected to improvethe overall sustainability o ethanol production given theadditional bene ts it can provide.

Although technology or second generation ethanol alreadyexists and the inputs are relatively cheap, industrial processesare still incipient and thus prohibitively expensive. Througha joint plan with the Brazilian Development Bank ( Banco Nacional de Desenvolvimento Econmico e Social BNDES)and the Brazilian Financing Agency or Studies and Projects

(Financiadora de Estudos e Projetos FINEP), the Braziliangovernment has developed initiatives to reduce costs andincrease the competitiveness o advanced ethanol. Themost import initiative, known as Support or TechnologicalInnovation and Industrial Sugarcane Sectors Sucroqumico(PAISS), was launched in 2011. It provides US$1 billion or thedevelopment o production and trading o new technologiesor industrial processing o biomass derived rom sugarcaneto produce second generation ethanol.

Despite this potential, i second generation ethanolbecomes competitive in Brazil, it is likely it will raise issuesabout the trade-o between using sugarcane bagasse as

eedstock or advanced ethanol or or cogeneration. Asdescribed in the ELLA Brie : From Manual to Mechanical Harvesting: Reducing Environmental Impacts and Increasing Cogeneration Potential , using bagasse or cogeneration isstrategic or Brazil because it can complement short alls inhydroelectricity supply, since sugarcane harvesting takesplace during Brazils central-southern regions dry season.Consequently, the decision about whether to use bagasse aseedstock or ethanol or or cogeneration will not only dependon a cost-bene ts analysis, but will also have to consider

national energy supply.
http://www.iea.org/228E23D6-DBEE-4DD0-BDDF-7F568ADD1F2F/FinalDownload/DownloadId-E6F8D133A4D99E45C4385133A4885778/228E23D6-DBEE-4DD0-BDDF-7F568ADD1F2F/publications/freepublications/publication/2nd_Biofuel_Gen.pdfhttp://www.iea.org/228E23D6-DBEE-4DD0-BDDF-7F568ADD1F2F/FinalDownload/DownloadId-E6F8D133A4D99E45C4385133A4885778/228E23D6-DBEE-4DD0-BDDF-7F568ADD1F2F/publications/freepublications/publication/2nd_Biofuel_Gen.pdfhttp://ageconsearch.umn.edu/bitstream/135793/2/Kristoufek.pdfhttp://ageconsearch.umn.edu/bitstream/135793/2/Kristoufek.pdfhttp://ella.practicalaction.org/node/1046http://ella.practicalaction.org/node/1046http://ella.practicalaction.org/node/1046http://ella.practicalaction.org/node/1046http://ella.practicalaction.org/node/1046http://ella.practicalaction.org/node/1046http://ageconsearch.umn.edu/bitstream/135793/2/Kristoufek.pdfhttp://www.iea.org/228E23D6-DBEE-4DD0-BDDF-7F568ADD1F2F/FinalDownload/DownloadId-E6F8D133A4D99E45C4385133A4885778/228E23D6-DBEE-4DD0-BDDF-7F568ADD1F2F/publications/freepublications/publication/2nd_Biofuel_Gen.pdf



ENABLING THE INCEPTION OF THEBIGGEST ETHANOL PROGRAMMEIN THE WORLD

CONTEXTUALFACTORS

Although Prolcool was launched during a military regime,it was well accepted by civil society and the private sectorsince it was expected to increase the Brazilian GDP through

job generation, agribusiness strengthening and oreigncurrency exchange. Since the mid-1970s, the Braziliangovernment has provided signi cant backing to improveethanol competitiveness through avourable pricing policiesand nancial incentives. Likewise, partnerships betweenresearch centres and universities or technology developmentand trans er have helped to improve the efciency o ethanolproduction processes. The national oil company, Petrobras,acilitated the mixture, distribution and sale o ethanol, andwas also undamental to building the logistics network.

The growth in sugarcane and ethanol production raisedconcerns within the government and civil society aboutthe environmental impacts. Many years a ter the inceptiono the Prolcool programme, international and domesticinstitutions began to pressure the Brazilian governmentto develop and implement policies to mitigate these

problems and ensure a more sustainable pathway oruture bio uel production. The governments response

included mandatory environmental assessments orethanol licensing, an agreement to phase out the practiceo pre-harvest burning and an agro-ecological policy toolor planning and delineating the expansion o sugarcane.

Public-private partnerships have also supported theadoption o environmentally riendly practices in ethanolproduction.

Similarly, the negative impacts related to land use expansionor rst generation ethanol have boosted investments inresearch and development or second generation bio uelsrom sugarcane which appear to hold considerable promise.

CONCLUSION

Large-scale consumption o ethanol has turned Brazil intoa world benchmark in low carbon technology or transportand has enabled the country to save millions o tonnes o GHGemissions by replacing gasoline with a renewable uel. TheBrazilian model or ethanol production has not only improvednational energy security and reduced external debts, it isalso providing an important source o employment and GDP.

Despite these bene ts, it must be acknowledged that ethanolproduction in Brazil continues to have serious social andenvironmental impacts that have not yet been adequatelyaddressed by government policy or the private sector.

Furthermore, the ethanol sector has managed to survivethanks in large part to government incentives. Due to manyexternal and internal actors, the private sector has neverbeen able to maintain sustainable levels o production andthis represents a serious risk to long-term energy security.

Today, public expenditure on bio uels and environmentalmanagement are two key issues being agged by civil societyand international institutions, and require urgent measuresin order or the ethanol market to keep on growing in asustainable manner.

KEY POLICY AND PRACTICE LESSONS

The Brazilian experience o ethanol production providesseveral important lessons about what to do and what to avoidwhen creating and strengthening a bio uels industry.

1. The Brazilian bio uels programme, Pralcool , boostedethanol production on a large scale, reducing Braziliandependence on oil imports, reducing energy insecurityand economic constraints as well as increasing the shareo renewables in the energy matrix.

2. The government was, and still is, the main actor behindthe success o ethanol in Brazil. Through key measures

including mandatory blending policies, inancialincentives aimed at increasing the competitivenesso ethanol, and partnerships with the private andresearch sectors, the Brazilian government created andconsolidated the biggest sugarcane ethanol market inthe world.

3. Producing ethanol has generated a wide range o negativeenvironmental impacts in Brazil. Civil society pressureand government response through a wide array o publicpolicies has succeeded in reducing negative impacts romharvesting and production. However, urther measuresare required in order to mitigate and reduce utureimpacts likely to arise rom increasing global demand.



4. Sugarcane agro-ecological zoning is an important policytool or planning sugarcane expansion and protecting theenvironment. This tool was developed 30 years a ter thebeginning o the Prolcool programme. Had this beendone earlier, it would have protected large areas o nativeorests rom de orestation and degradation.

5. Replacing gasoline with ethanol reduces GHG emissions,both through the absorption o CO 2 during sugarcaneplant photosynthesis and through the reduction o CO 2 emissions rom ethanol-powered engines.

6. The launch o ex uel vehicles, which can be uelled

with any mix o ethanol or gasoline, GHG emissionsrom Brazilian vehicles have been reduced signi cantly.However, consumers have shown themselves to bevery sensitive to price changes. As ethanol losescompetitiveness and becomes more expensive,consumers shi t to gasoline, regardless o theenvironmental disadvantages.

7. Despite lowering GHG emissions, ethanol production hasnegative social and economic impacts. Low wages, badwork conditions and child labour are among the mainproblems created by the sugarcane industry in Braziland should be urgently addressed with adequate policyand en orcement measures.

8. Second generation ethanol has the potential tosigni cantly increase sugarcane productivity without theneed or expanding cultivation areas. Second generationbio uels there ore show the potential or avoidingmany o negative environmental impacts observed inthe production o traditional ethanol, and thus may be

considered a more sustainable uel option.

KNOWLEDGE PARTNERS

Below is a sample o some o the most in luentialorganisations researching and working on bio uelproduction and consumption and its impacts in Brazil andworldwide. For additional in ormation about these and otherorganisations, read the ELLA Spotlight on Organisations: Brazils Ethanol Programme .

The Brazilian Re erence Centre on Biomass (CENBIO/IEE/USP) was established with the main goal o conductingresearch and disseminating scienti c, technological andeconomic in ormation on the use o biomass as an efcient

energy source in Brazil. To achieve this, CENBIO has ocusedon developing studies and projects on biomass, as wellas promoting exchange between Brazilian and oreigninstitutions on the economic, social and environmentalimpacts o biomass technology. The centre also publishes theBrazilian Journal o Bioenergy and many o its publications are available in English.

The Brazilian Bioethanol Science and Technology Laboratory (CTBE)is a national laboratory that contributes to developingsustainable production o Brazilian ethanol rom sugarcane byinvesting in scienti c research and technological innovation.Studies cover the sugarcane li ecycle and ocus on industrial

technologies or improving eedstock and conversion. TheCTBE partners with other research organisations working inrelated areas through a network o associated laboratoriesin universities and research institutes.

The Industry Association or Energy Cogeneration (COGEN) is a not- or-pro it and independent civil society groupestablished in 2003 to encourage energy cogenerationprojects and diversi cation o the Brazilian energy matrixthrough more efcient, cleaner and cheaper energy options.COGEN aims to create an appropriate environment to enablean increase in the supply o bioelectricity to the regulatedmarket and the ree market. The association conducts studieson alternative access and connection to the grid, seekingto rationalise costs, and ocuses on creating and re ningmechanisms to promote and trade bioelectricity.

The Bio uel Watch Centre is a programme run by the organisationReprter Brasil , whose mission is to raise awareness o the socialand environmental impacts o crops used to produce bio uels inBrazil. The Bio uel Watch Centre works to create mechanisms

to strengthen the capacity o the government and civil societyto control and supervise damage caused by bio uel production.

The Renewable Energy Policy Network or the 21st Century (REN 21) is a global multi-stakeholder network that convenesinternational leaders rom the public, private and civil societysectors with the aim o increasing the share o renewableenergy in the world energy matrix. REN 21 provides policy-relevant in ormation and research-based analysis onrenewable energy driven by concerns or climate change,energy security and poverty alleviation. To achieve itsobjectives, REN 21 encourages action in three key areas: policy,advocacy and exchange. Through reports and interactivemaps, REN 21 provides important in ormation about ethanolin Brazil, as well as in countries across A rica and Asia.
http://ella.practicalaction.org/node/1138http://ella.practicalaction.org/node/1138http://cenbio.iee.usp.br/indexen.asphttp://cenbio.iee.usp.br/indexen.asphttp://cenbio.iee.usp.br/english/rbben.htmhttp://cenbio.iee.usp.br/english/publications.htmhttp://cenbio.iee.usp.br/english/publications.htmhttp://www.bioetanol.org.br/english/http://www.bioetanol.org.br/english/http://www.bioetanol.org.br/english/http://www.cogen.com.br/origem.asphttp://www.cogen.com.br/origem.asphttp://reporterbrasil.org.br/biofuel/http://reporterbrasil.org.br/biofuel/http://reporterbrasil.org.br/http://www.ren21.net/http://www.ren21.net/http://www.ren21.net/http://www.ren21.net/http://www.ren21.net/http://reporterbrasil.org.br/http://reporterbrasil.org.br/biofuel/http://www.cogen.com.br/origem.asphttp://www.bioetanol.org.br/english/http://www.bioetanol.org.br/english/http://cenbio.iee.usp.br/english/publications.htmhttp://cenbio.iee.usp.br/english/rbben.htmhttp://cenbio.iee.usp.br/indexen.asphttp://cenbio.iee.usp.br/indexen.asphttp://ella.practicalaction.org/node/1138http://ella.practicalaction.org/node/1138


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RECOMMENDED READING

The ollowing is a selection o some o the key publications

related to Brazils ethanol programme. For more in ormationabout these and other publications, see the ELLA Spotlight on Publications .

Almeida, M. 2012. Analysing the Brazilian Sugarcane Agro- ecological Zoning: Is this Government Policy Capable o Avoiding Adverse E ects rom Land-use Change? MScdissertation, Victoria University o Wellington.

Carvalho, L.C.C. 2007. Ethanol: A Brazilian Success ul Story .In: WROBEL, P. (ed). Clean Energy: The Brazilian Ethanol

Experience . London, UK.Ho setz, K., Silva, M. 2012. Brazilian Sugarcane Bagasse: Energy and Non-energy Consumption . In: Biomass and Bioenergy 46 564-573.

National Development Bank (BNDES) and Centre or Strategic Studies and Management in Science, Technology and Innovation (CGEE) . 2008. Sugarcane-Based Bio-ethanol: Energy or Sustainable Development . BNDES, Rio de Janeiro.

Padula, A. et al . 2011. Sustainability, Certi ication and

Internationalisation o Brazilian Ethanol . Paper presentedat the International Food and Agribusiness ManagementAssociation (IFAMA) 2011 Annual World Symposium, 20-21June 2011, Frank urt.

Rathmann, R., Szklo, A., Schae er, R. 2010. Land Use Competition or Production o Food and Liquid Bio uels: An Analysis o the Arguments in the Current Debate . In:Renewable Energy 35 (1) 14-22.

Scha el, S., La Rovere, E. 2010. The Quest or Eco-social Efciency in Bio uel Production In Brazil . In:Journal o Cleaner Production 18 1663-1670.

LEARN MORE FROM THE ELLA BRIEFS

These our ELLA Brie s provide analysis o some the most

important issues related to Brazils ethanol programme.

From Manual to Mechanical Harvesting: Reducing Environmental Impacts and Increasing Cogeneration Potential

Mechanisation o sugarcane harvesting in Brazil has beenshown to decrease environmental impacts and waste, whilealso increasing efciency, energy cogeneration and thussector pro ts and national energy security. Learning romBrazils years o trial-and-error, other countries could buildan ethanol production system with these bene ts.

Brazils E orts to Mitigate the Environmental Impacts o Ethanol Production

As the sustainability o ethanol production continuesto be a hot question, Brazilian attempts to improve anenvironmentally inefcient production process could providepointers or those dealing with similar challenges in othercountries.

Government Intervention to Strengthen the Ethanol Sector: Lessons rom Brazil

The scale o Brazils ethanol production, demand andcompetitiveness is largely attributable to governmentinitiatives. The varying levels o success o such initiativescan provide interesting lessons or other countries.

Sugarcane Agro-ecological Zoning: Greening the Expansion o Ethanol

As ethanol production becomes increasingly lucrative,how can nations ensure that expansion is environmentallysustainable? Brazils experiment with sugarcane agro-ecological zoning may provide some answers.

FIND OUT MORE FROMELLATo learn more about Brazils experience with ethanol, read the rest ofthe ELLA knowledge materialson this theme. To learn more about otherELLA development issues, browse otherELLA Themes.

CONTACTSSNTo learn more about Brazils experience with agro-ecological zoningin the ethanol industry, contact the author, Pedro Nin de Carvalho,Researcher at the Environmental Sciences Laboratory (LIMA) of theFederal University of Rio de Janeiro, at [email protected].

ELLA is supported by:
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