Bioenergy in Brazil – from traditional to modern systems - Biomass as Energy Source: Resources, Systems and Applications - page 80

Figure 4.7. Biodiesel production in Brazil 2005-2010 - in 10 6 liters (IBGE, 2011).
At the end of the 20th century, the issue of biodiesel was on the government's agenda once
again, and in 2002 a biodiesel program was launched aimed at the substitution of 5% of the
fossil diesel consumed in the country by 2013. Production of biodiesel was started in 2005 when
a mixture of 2% biodiesel was also authorized. Later, the mix became compulsory, and was
successively raised to 5%. Figure 4.7 shows the rapid development of biodiesel production in
Brazil, which reached 2.4 billion liters in 2010, thus allowing the 5% mix of biodiesel in the total
diesel consumption of the country, and meeting the mandatory target long before the target year
(EPE, 2011a). Meanwhile, the installed capacity is already in the order of 6 billion liters and the
government is being asked to set new targets and authorize increases in the mix, initially to 7%
and gradually up to 20% (IPEA, 2012).
Notably, Brazil was able to establish production to meet a 5% biodiesel mixture in only 5 years.
There is here a clear distinction from the efforts made in the 1980s and the successful policies
implemented in the past few years. First, there is now a global conducive environment to develop
biofuels for transport in face of high oil prices and climate change mitigation challenges. Second,
Brazil had a long and successful experience developing the ethanol industry when the recent
biodiesel program was launched. This includes the modernization achieved in agriculture, and
technological development favored by R&D, both very important for a competitive biodiesel
production.
One point to notice, however, is that the biodiesel program was launched to be more socially
inclusive and diverse than the ethanol program. Given the variety of species that can be used for
biodiesel production in Brazil, the idea was to build upon regional vocations and promote different
species. However, although production goals and fuel mixture were reached, the dominance of
two major sources indicates that more attention is needed if the distributive social and regional
benefits are to be fully explored. Most of the production came from soya (85%) and a small
part from meat fats (13%) in 2010, indicating that the most established and export-oriented
segment of the Brazilian agribusiness (soya) was able to very rapidly capitalize on the synergies
that the market incentives for the biodiesel program made possible. Notably, this has resulted in
significant participation of international capital in the development of biodiesel production, and
higher capital concentration than in the ethanol sector (IPEA, 2012).
The social certification created early in the program to favor small producers has had limited
impact. Only some 109,000 families have benefited directly from the program in southern regions,
while the target was 245,000 families with particular focus on the northeast (IPEA, 2012). This
goes hand in handwith the fact that soya is often organized in large-scale production and regionally
concentrated. Likewise, the biodiesel production is mainly concentrated in four states of the
center-south regions while the northeast would better contribute with other crops. For other crops
to become more important, technological improvements are needed to establish cost-efficient
industrial processes for inputs other than soya. Since at least 70% of the production costs of the