Looking for Sustainability in Biofuel and Bioenergy Industries: Some Challenges and Opportunities

Marcelo Pereira da Cunha – Institute of Economics – Unicamp – Brazil

marcelocunha@eco.unicamp.br

Looking for sustainability in biofuel and bioenergy industries: some challenges and opportunities

The adoption of biofuels and bioenergy have been recognized as a possible sustainable alternative for replacing fossil fuels, mainly from the beginning of this century. Several countries have set policies to implement and to enlarge the use of those sustainable options. Bioethanol and biodiesel are the most important biofuels produced and used in North America and South America – United States, Brazil and Argentina are among the main countries in this field. Cosidering that there are many differences in the regulation, development, agricultural conditions and the markets in the American countries, the opportunities and challenges faced in the biofuels and bioenergy industries are regionally dependent. The objective of this presentation is to display some opportunities and challenges in this industry considering the three pillars of sustainability. In economic terms, energy policy and regulation can be an incentive to replace part of fossil fuels in domestic or international markets; on the other hand, changes on them (and sometimes the near absence of them) can create barriers to enlarge the bioenergy adoption. In this aspect, the current situation of ethanol in Brazil competing in unfavorable conditions with gasoline is an example. Still in the economic dimension, the limits of how industries of the sector can explore the production of co-products need to be careful analyzed. Considering the social pillar, special attention has to be placed on the business model adopted by a bioenergy company because there are different implications on sustainability depending on it. For example, the possible positive impacts in jobs and income generation, mainly in the agricultural phase, will be influenced by the technological level adopted in agriculture but also on the verticalization (or not) in this key phase of the production chain. A particular analysis is provided in a recent sugarcane ethanol expansion area in Brazil. Another one is the example of how the biodiesel industry has been operating with feedstock supplied by family farmers. Taking into account the environmental issues, the industry has been capable to improve, in many cases, the GHG emissions by through its production process. One of the possibilities is to use biodiesel in the agricultural phase replacing mineral diesel oil in an integrated sugarcane ethanol and biodiesel production. On biodiesel sector, the use of beef tallow (second most important feedstock in Brazil) is another other example of improving environmental benefits, as well as economics. Finally, other important issue is regard to the methods applied over biofuel and bioenergy sustainability assessment, which may (and shall) contribute to evaluate in the best possible way the benefits (or not) of this diversified sector, mainly because biofuels and bioenergy are not the same around the world.