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Sector says ethanol is most direct way for Brazil to meet its environmental targets

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

Brazil is the world’s second largest ethanol producer after the United States. The country’s annual production averages 30 billion litres, with potential for at least 50% growth. “Official expectations from the Energy Research Company (EPE) indicate an increase in this production to 46 billion liters over ten years. There is significant potential to increase ethanol supply. It is an agro-industrial product, and if there is interest and demand in the broader ethanol market, there are options for agricultural producers and industrial groups to respond to this signal”, introduce Professor Suani Coelho and doctoral student Danilo Peresin of the Institute. Energy and Environment at the University of São Paulo (USP).

Sugar and Energy Industries Association (SIAMIG) president Mario Campos says EPE projections are feasible and only depend on more investment. He says that with the existing capacity of Brazilian industries alone, volumes could increase by 20% if there is consumer demand. “To get more incentives for production and consumption, we need to move from an economic issue to an environmental one,” he said.

Petrobras is Brazil’s largest company, with decades of expertise, so there’s no room for suddenly abandoning fossil fuels, recalls Campos. At the same time, mass production of electric vehicles is not possible quickly in Brazil. In this scenario, he places biofuels at the center of sustainability in the country: “With economic issues and maintaining Brazil’s industrialization, the tendency to place biofuels at the center of decarbonization in the area of ​​mobility is very strong”.

Evandro Gussi, president director of the Sugarcane Industry Association (Unica), also believes that ethanol is not the only tool for Brazil to achieve its decarbonization goals – under the Paris Agreement, a 43% reduction in emissions by 2030. In. But Brazil’s reality needs to be respected, Gussi stresses: “As a public policy, Brazil cannot make wrong choices, much less copy other countries. There is no doubt that electric vehicles will enter the market. Now, ethanol is a way for consumers to decarbonize while also saving money.”

Ethanol is a bet for decarbonization because, first, replacing gasoline with the alternative reduces greenhouse gas emissions by 70% to 90%. This is necessary because plantations absorb the CO² emitted by the fuel. According to Unica’s estimates, the use of ethanol in flex vehicles, adding a mandatory blend of 27% alcohol to gasoline, will reduce Brazil’s greenhouse gas emissions by 630 million tons between 2003 (launch of Flex) and 2022. This is equivalent to the sum of the total emissions of South Korea, which has a population of more than 51 million.

Plus, ethanol is a more viable option for Brazilians’ wallets, recalls Unica’s Gussi. “In many places in Brazil, using ethanol is much cheaper than gasoline, in addition to being beneficial for the environment and public health, because ethanol is much better for air quality.” For example, in Minas Gerais, The average price of ethanol is R$3.48About 63.3% of the price of gasoline, R$5.50.

Gussie argues that expanding ethanol supply in the country depends on encouraging the development of technologies. “There is a need to produce more in the same areas, such as new varieties of sugarcane that provide greater productivity, increased corn ethanol for second crop areas and new planting techniques. Brazil already has highly relevant emissions reduction rates, but the great beauty of this is that it can go even further with productivity gains”, the Unica representative added.

Bill (PL) 4516/23, “Fuel of the Future Project”, is being processed in Congress. It defines axes to encourage 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 these volatile, sporadic incentives, to something more concrete with predictability. Naturally, the private sector reacts immediately to this incentive”, concludes Mario Campos from SIAMIG.

Automakers invest in ethanol for decarbonization

With ethanol industry infrastructure being consolidated in Brazil, automakers are betting on the fuel for their decarbonization strategies in the country. For example, Stellantis has an investment plan of R$8.5 billion by 2025 in its campus in Betim, in the metropolitan area of ​​Belo Horizonte. It aims to reduce greenhouse gas emissions and accelerate decarbonization.

Ethanol is at the heart of this project. The company launched the Bio-Electro platform, which researches and develops clean mobility options. The company assesses that the Brazilian reality still does not support the mass production of 100% electric vehicles. But it is developing 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 its name because it is obtained from renewable sources – usually, its original source is fossil. Normally, it is obtained through solar or wind energy, but, as per the technology tested, ethanol is its source.

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