Bioenergy in Brazil – from traditional to modern systems - Biomass as Energy Source: Resources, Systems and Applications - page 81

biodiesel are in the oil source, there is a need for coordinating R&D efforts with distributive
policies to achieve the full social benefits of the biodiesel development.
Given the rapid development of the biodiesel industry, idle capacity awaiting new legal frame-
works to increase production, and on-going discussions for a new regulatory framework for the
sector, it is surprising that the government's ten-year plan for the energy sector indicates no
expectation to increase the percentage of biodiesel mix in the near future. This is justified by
the fact that input prices are expected to increase in the next years, putting biodiesel in strong
competition with other end-uses for relevant crops. In the ten-year plan report, EPE (2011b)
indicates an increase from 2.4 billion liters in 2010 to 3.8 billion liters in 2020, which is needed
to continue fulfilling the compulsory mix of 5% biodiesel. This is definitely a very conservative
view given that installed capacity already allows production of 6 billion liters and the industry
is putting pressure on the government to increase the compulsory mix. In any case, a new legal
framework for biodiesel is needed to strengthen the social and regional development dimensions
of the program, as well as research and technological innovation in the sector.
4.5 BIOENERGY - OPPORTUNITIES FOR SUSTAINABLE DEVELOPMENT
The Brazilian economic development of the past decades is reflected in the expansion and trans-
formation of the country's energy base. Not only has the Brazilian energy consumption increased
rapidly in line with major development efforts, but the diversification of the energy sources has
been quite significant. In this process, bioenergy not only remained an important source of energy
in the country but is increasingly characterized by modern energy transformation, multiple car-
riers and end-uses. Synergies have been established between bioenergy and various sectors of
the economy including agriculture and forestry. To promote these synergies, innovative cross-
sectorial policies and multiple actions have been implemented, and significant progress has been
achieved. Still, many challenges lie ahead.
Today, Brazil is the world leader in the production and use of sugarcane ethanol - the first
large scale alternative for substitution of fossil fuel in the transport sector. The positive results
of the efforts made have been gradually recognized internationally not least due to the climate
change mitigation benefits achieved. The benefits of a more sustainable energy path are also
strongly felt in the Brazilian economy, and this is triggering new efforts to continue on track.
A study by Weidenmier et al . (2008) found empirical evidence that diversification of energy
supply resulted in large macroeconomic benefits to Brazil. According to their study, the GDP was
almost 35% higher in 2008 compared to 1980 due to reduction of oil imports, increased domestic
oil production and development of sugarcane ethanol. In addition, diversification of the energy
system helped reduce business-cycle volatility in the range of 14 to 22% particularly in the past
decade. Three quarters of the welfare benefits are related to reduced oil imports and development
of national oil production. However, sugarcane ethanol had a major role in the other part of the
benefits not least in protecting the economy from oil price shocks.
Fuel wood and charcoal together still account for 10% of the energy supply in Brazil. Domestic
uses of fuel wood for cooking are common in rural areas although gradually going down in
importance as the economy grows and energymodernization reaches the countryside. Meanwhile,
the increasing demand for round wood, pressure to expand agriculture and pasture, added to the
urgency to generate income continue acting as strong counterforces to preservation of Brazilian
forests, in spite of stringent environmental control. Charcoal production is still to a great extent
based on natural forests, and this leads to significant impacts on sensitive biomes. Given the role
of charcoal in the metallurgical industries, there are strong reasons to upgrade this part of the
supply chain and transform it into a sustainable proposition to mitigate emissions and generate
socio-economic development. Such a discussion has already been triggered in Brazil due to the
emissions reductions potential implied.
In fact, new strategies are needed to change the role of forest-based bioenergy and make it an
integrated part of the modernization of forestry activities in Brazil. For example, the potential of