Biofuel in Brazil: Soybean and Palm Oil Impacts on Socioecological Systems

Title: Biofuel in Brazil: Soybean and Palm oil impacts on Socioecological systems

Keywords: biodiesel, soybean, palm oil, impacts

Thematic area: Brazilian Biofuel and Bioenergy Sustainability Issues and Case Studies

Authors: Fernanda Silva Martinelli
1
, Tatiana Martins
2
, Rodrigo Medeiros
3

The increasing concern about global warming and the uncertainty of oil prices have generated much interest in alternative fuel sources to petroleum, especially biofuels. Biofuels are liquid fuels produced from biomass, and ethanol and biodiesel are the world primary liquid biofuels used for transportation. In Brazil, more than 70% of biodiesel production is from soybean crops, which is currently the only oil crop available for large-scale biodiesel production. The Brazilian soybean expansion started in the early 1970s driven by global market forces that lead government to heavily subside this crop and invest in transportation infrastructure needed. Since then, Brazil has invested in soybean production and became the world’s second biggest producer. Although it brought countless economic benefits, it also ended up in significant impact on biodiversity and ecosystem services, especially if plantations replace Cerrado or Amazon rainforest. Further, highly mechanized large-scale industrial soybean plantations might lead small-scale farmers’ displacement into Amazon forested areas to use them for agriculture or cattle ranching

In order to promote rural social and environmental development, government has enacted political measures to support different sources for biodiesel, and oil from palms has the potential to be a major contributor. Although Brazil has not yet reached full-scale production, the country has followed the global trend and doubled its production area during 2001-2009, from 46 to 109 thousand ha and projected scenarios predict major expansion in the next few years. In order to avoid the same impacts of past large-scale soybean expansion, two important measures were set: the Social Fuel Seal Program and the Zoning for palm oil in Amazon. The Seal Program has encouraged partnerships between biodiesel companies and small scale farmers by contractual agreements, where biodiesel refineries buy at least 15% of their total palm oil from small-scale farmers. SFS companies receive tax benefits and priority in biodiesel auctions. The Brazil’s agro-ecological zoning for palm oil limits production only to degraded lands without environmental legal restrictions, and the removal of native vegetation for planting palm oil crop is forbidden. From this restriction, suitable areas for oil palm went down from 2.32 million to 704.066 km2 which represents 14% of Legal Amazon.

Although legal regulation and tax incentives are important to promote a sustainable biodiesel production, they might not achieve the targets they were supposed to. The world biggest palm oil producers Indonesia and Malaysia’s experiences suggest that Brazil should expect land use changes challenges and unanticipated effects. Some effects might come from the remoteness for supervision of palm production poles, displacement of farmers who do not accept palm crop, as well as environmental consequences for communities regardless indirect and illegal direct deforestation.

Because soybean and oil palm are most intensively cultivated in high biodiversity sites, any future intensification of these crops without proper mitigation guidelines will likely further threaten the high concentrations of globally endangered species in these areas. Our paper intent to compare soybean and palm oil production impacts on biodiversity, ecosystem services and local community by evaluating 1) Land use change, 2) Agrochemicals use, 3) Soil, Water use and GHG emissions, and 4) Job creation and inclusive growth. These indicators were assessed in a literature-based inventory of the sustainability of major biofuel production systems, based on current certification and production practices (RSB, RSPO, RTRS) in major production areas.

Since soybean is a consolidated crop in Brazil and the impacts are widely known, we can anticipate the future impacts and promote a more sustainable large-scale palm oil production in Amazon and help stakeholders to set better production practices for both soy and palm. This comparison was taken from available published data through literature research. We analyzed impacts of soybean and palm oil biofuel production systems in different tropical regions where these crops are relevant.

1. Land conversion: direct and indirect LUC

As with other crops, it is difficult to quantify the extent to which soy and palm oil have been replaced native forest because of a lack of accurate data on land cover change and incomplete understanding of its complex causes. If we consider the timeline in Brazil, soybean has driven deforestation since 70’s while palm oil is a recent 90’s crop, what makes the first much more responsible for land conversion than the latter. However, what we intent to verify is what type of plantation can be more productive and use less land extension starting from now.

The scenario of soybean-based biodiesel production to meet future global biodiesel demand would likely result in the highest amount of habitat loss compared with alternative scenarios of oil palm-based biodiesel production. This is because in terms of yield productivity for biofuel, palm oil ranks the highest compared to soy, given its high oil productivity. In Brazil’s case, soybean occupies 220 times more land to produce only 57 times more oil than palm. On the other hand, the infrastructure for production and transportation of soybean is well consolidated while for palm is far behind and recent road improvement in remoteness areas in Amazon has lead to indirect deforestation. Also, the area harvested for palm oil has increasing faster than for soybean which may drive indirect land use change. Even with legal restrictions, the main point of concern for palm and for soy crops is the indirect land use change derived from food crops farmers and mostly cattle raising being displaced to forested (and cheaper) areas since both are commodities cultivated in monoculture systems.

2. Agrochemicals use

The runoff from large use of agrochemicals such as insecticides, herbicides, rodenticides, and fertilizers in palm and soybean monocultures impacts aquatic biodiversity, rivers and “igarapés” water quality and the health of local communities that lives and cultivates food nearby. In all agrochemical indicators, palm oil crops present the least amount of input needed and also the least amount of runoff to soil and water. Less amounts of agrochemicals to the crops reflects in less harm on Amazon and Cerrado ecosystems and on human health.

3. Soil, Water use and GHG emissions

First generation biofuel development can lead to a variety of implications related to soil, water use and GHG emissions. Soil erosion is a serious problem due its irreversibility and the fact that threats the agriculture productivity by losing plant nutrients and organic matter. Based on a case study comparing soybean in Brazil and palm oil in Malaysia, palm crops promote more loss of soil than soybean.

Other indicator of biofuels’ environmental sustainability is the total amount of freshwater used to produce the product, which refers to the volume of surface, ground water and rainwater consumed. Results from a study in Thailand show that water footprint for soybean and palm oil crops is similar. Especially for palm oil, it will be highly depended of how water use is managed.

Lastly, GHG emissions could be the most essential indicator since, in theory, the main reason to use biofuels is the concern about GHG emissions. Regardless to the fossil energy balance, a liter of palm oil biofuel contains 9 times the amount of energy that was required for its production, which means palm oil crops would emit less carbon than soybean.

4. Job creation and inclusive growth

Among the many aspects regarding social sustainability of biofuels, the focus is usually on job creation and rural development by family farming inclusion. The crop that generates inclusive job and income growth for smallholders contributes to economic and social development of the region. Soybean has the potential to generate jobs by using 2 workers per 100 ha while and palm oil use 1 worker per 10 ha. From this data we see that the key reason for palm oil investment in Brazil is its potential to promote rural development in North and Northeast poor regions , a benefit that mechanized soybean could not achieve. Palm oil offers income security for the family farm for the following main reasons: has high yield potential and lower production cost than the other major oilseeds, is a permanent crop and requires less labor-intensive which permits the development of other agricultural activities.

Conclusion

Government incentives and increasing energy demands make the expansion of biofuels production in Brazil a virtual certainty. Although many questions remain, the results of our study suggest that an increase in soybean-based biodiesel production could have greater negative social and environmental effects than those of palm oil crops in Brazil. From 17 indicators evaluated, palm oil was better on 12 regarding biodiversity, ecosystem services and local community impacts. Soybean production, however, is still the most profitable oil crop and the only one available for large-scale biodiesel production. Although we used the most recent available data to build this framework, new technologies and best practices might change the indicators results for each case and improve biofuel production. Crop management practices aimed at increasing yields and/or minimizing ecological costs will further influence the role biofuels play on ecosystem and biodiversity, and partnerships with local smallholders might bring several community benefits.

Annex 1

Table 1 – Environmental and social impacts of soybean and palm oil production