Ethanol is the most direct way for Brazil to meet its environmental target, says sector

Brazil has a unique position in the present and future of energy sustainability, experts argue. With a fleet of more than 40 million flex-fuel vehicles that support ethanol, the country does not need to wait for a revolution in the supply of electric vehicles to be at the forefront of decarbonization. To advance the agenda of reducing greenhouse gas emissions, however, the country still needs to expand its alcohol production in the coming years.

Brazil is the world’s second largest producer of ethanol, behind the USA. The country’s annual production average is 30 billion liters, with the potential to increase by at least 50%. “The official expectations of the Energy Research Company (EPE) indicate growth in this production to up to 46 billion liters in ten years. There is significant potential for expanding ethanol supply. It is an agro-industrial product, and if there is interest and demand for a broader ethanol market, there are alternatives for agricultural producers and industrial groups to respond to this signal”, introduce professor Suani Coelho and doctoral student Danilo Perecin, from Institute of Energy and Environment at the University of São Paulo (USP).

The EPE estimate is feasible and only depends on more investments, says the president of the Sugar and Energy Industries Association (Siamig), Mário Campos. With the current capacity of Brazilian industries alone, the volume could increase by 20%, if there is consumer demand, he says. “In order for us to have more incentives for production and consumption, we need to move away from the economic issue and onto the environmental side”, he points out.

Campos remembers that Petrobras is the largest company in Brazil, with expertise accumulated over decades, so there is no scope for fossil fuels to be abandoned abruptly. At the same time, scale production of electric vehicles in Brazil is not viable quickly. In this scenario, he places biofuels at the heart of sustainability in the country: “combined with economic issues and maintaining Brazil’s industrialization, the tendency to have biofuels at the center of decarbonization in the area of ​​mobility is very strong”.

The president director of the Sugarcane Industry Union (Unica), Evandro Gussi, also considers that ethanol is not the only tool for Brazil to achieve its decarbonization goals — under the Paris Agreement, of a 43% reduction in emissions by 2030, in relation to those of 2005. But the Brazilian reality needs to be respected, emphasizes Gussi: “as a public policy, Brazil cannot make wrong choices, much less copy those of other nations. Electric vehicles will penetrate the market, there is no doubt. Now, ethanol is a way for consumers to decarbonize while saving money.”

Ethanol is a bet for decarbonization because, firstly, replacing gasoline with the alternative reduces greenhouse gas emissions by 70% to 90%. It is essential because plantations absorb the CO² emitted by fuel. The use of ethanol in flex vehicles, added to the mandatory mixture of 27% of alcohol in gasoline, reduced Brazilian greenhouse gas emissions by 630 million tons between 2003 (launch of flex) and 2022, according to Unica estimates. This is equivalent to the sum of the total emissions of South Korea, which has more than 51 million inhabitants.

At the same time, ethanol is a more viable option for Brazilians’ pockets, recalls Gussi, from Unica. “In several places in Brazil, it is much cheaper to use ethanol than gasoline, in addition to the advantage for the environment and public health, as ethanol is much better for air quality.” In Minas Gerais, for example, the average price of ethanol is R$3.48around 63.3% of the value of gasoline, R$5.50.

Expanding the supply of ethanol in the country depends on encouraging the development of technologies, argues Gussi. “It is necessary to produce greater production in the same areas, such as new varieties of sugarcane that deliver more productivity, an increase in corn ethanol for second harvest areas and new planting techniques. Brazil already has extremely relevant emission reduction rates, but the great beauty of this is that it can go further with productivity gains”, continues the Unica representative.

Bill (PL) 4516/23, the “Fuel of the Future Project”, is being processed in Congress. It defines axes for encouraging green fuels in Brazil, in line with the country’s other sustainability goals, such as Rota2030, a federal government program to encourage innovation in the industry. “We are going to move away from this ups and downs, from sporadic incentives, to something more concrete, with predictability. Naturally, the private sector responds to this stimulus quickly”, concludes Mário Campos, from Siamig.

Automakers invest in ethanol to decarbonize

With the infrastructure of the ethanol industry consolidated in Brazil, automakers are betting on the fuel for their decarbonization strategies in the country. Stellantis, for example, has an investment plan of R$8.5 billion in its complex in Betim, in the metropolitan region of Belo Horizonte, until 2025. The objective is to reduce greenhouse gas emissions and accelerate decarbonization.

Ethanol is at the center of this project. The company launched the Bio-Electro platform, which researches and develops cleaner mobility alternatives. The Brazilian reality, the company assesses, does not yet support the scale production of 100% electric vehicles. But it develops a type of engine that combines ethanol and electric propulsion.

Toyota is also studying the possibility of decarbonization with ethanol in Brazil. In partnership with Shell and the University of São Paulo (USP), it is testing the use of ethanol-based green hydrogen in the Toyota Mirai. Green hydrogen has this name because it is obtained from renewable sources — usually, the origin is fossil. Generally, it is obtained through solar or wind energy, but, with the technology tested, ethanol is the source.

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